The 2023/2024 Australian federal budget is a reflection of a number of risks in the economic climate.
These include persistently high inflation, the continuation of higher interest rates and stress in the global financial sector.
The good news is unemployment is expected to remain low at 4.25 per cent in the coming financial year.
Additionally, a small surplus has been forecast for the 2022/23 financial year, although it’s anticipated the budget will return to a deficit of $13.9 billion in the 2023/24 financial year.
Forward estimates aside, there was a wide range of measures announced at the budget that are designed to support the small business sector.
What does the federal budget mean for small businesses?
Federal treasurer Jim Chalmers has announced a million businesses will receive a $650 cut to their power bills, while tax breaks for electrification will be available to other businesses.
There’s also funding to support the next generation of successful local start-up businesses, with a $392.4 million industry grants program for commercialisation of early stage ventures.
Plus, small businesses will still have access to a $20,000 instant asset tax write-off. They will also be able to access funding to help them shift to using digital technology.
“The measures announced at the 2023 federal budget should shepherd in better conditions for Australian businesses”
New super rules ahead
A number of measures announced at this year’s budget will shake up the super system in the years ahead.
From 2025, tax earnings from superannuation fund balances of more than $3 million will be taxed at 30 per cent, up from 15 per cent.
As already announced, superannuation contributions will be required to be paid to workers each payday. Although these rules will only come into force from 1 July 2026.
Renewables front and centre
There’s considerable funding for green energy in this year’s budget as Australia heads towards it’s 2050 net zero target. Some of the money allocated to renewable energy include:
- $2 billion for a hydrogen program called Hydrogen Headstart.
- $4 billion to become a renewable energy superpower.
- A Capacity Investment Scheme that will unlock more than $10 billion of investment in east coast renewable energy projects.
Looking ahead
Although economic growth is expected to drop to 1.5 per cent in 2024, the federal government expects growth to recover to 2.25 per cent in 2025. It also anticipates inflation will drop to between two per cent and three per cent by the 2024/25 financial year, which is inside the Reserve Bank of Australia’s target band of two per cent to three per cent.
The measures announced at the 2023 federal budget should shepherd in better conditions for Australian businesses, which have weathered a number of difficult years with strength.
Do you have the right cover?
It’s been an uncertain time for small businesses, and many things may feel out of your control. But you can control how you manage insurance risks. To discuss whether you have the right protections in place for your business, contact one of our brokers today.
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