Budget boost for business

As part of the Government’s COVID-19 Economic Recovery Plan, in this year’s Budget the Australian Government has committed to:

• reopen and strengthen the economy
• create jobs
• pave a clear road ahead for the nation

Here's an overview of what it means to Australian businesses.

The Australian Government has committed to supporting growth and jobs as Australia recovers, through the new Modern Manufacturing Strategy that will turbo-charge 6 priority sectors. It includes four key initiatives with immediate and long-term impacts

• Modern Manufacturing Initiative (MMI)
• Supply Chain Resilience Initiative
• Manufacturing Modernisation Fund (MMF) round two
• Road maps to recovery and beyond

JobMaker Hiring Credit

Eligible employers will have access to a JobMaker Hiring Credit for each new job they create over the 12 months from 7 October 2020, for which they hire an eligible employee, for a maximum claim period of 12 months from their employment start date.

Boosting Apprenticeship Commencements wage subsidy

To assist recovery from the impact of COVID-19, the $1.2 billion Boosting Apprenticeship Commencements wage subsidy will provide support to all employers who engage a new apprentice or trainee.

Any businesses or Group Training Organisation that engages an Australian Apprentice on or after 5 October 2020 may be eligible for a subsidy of 50 per cent of wages paid to an apprentice between 5 October 2020 and 30 September 2021, to a maximum of $7,000 per quarter.

The assistance will support 100,000 new apprentices across Australia.

Temporary full expensing

Eligible businesses with an aggregated turnover of less than $5 billion will be able to deduct the full cost of new eligible depreciating assets that are first held, and first used or installed ready for use for a taxable purpose, from 6 October 2020 and 30 June 2022.

For small and medium sized businesses (with aggregated turnover of less than $50 million), full expensing also applies to eligible second-hand assets

Loss carry back

Eligible corporate entities with less than $5 billion turnover in a relevant loss year can carry back losses made in the 2019–20, 2020–21 and 2021–22 financial years to a prior financial year's income tax liability in the 2018–19, 2019–20 and 2020–21 financial years.

FBT and other tax concessions

Businesses with an aggregated annual turnover between $10 million and $50 million will have access to up to 10 small business tax concessions as part of the 2020–21 Budget.

Upcoming reforms to the R&D Tax Incentive are included as a part of the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 which passed through Parliament on 9 October and received Royal Assent on 14 October 2020. The reforms aim to support companies which undertake R&D activities that will generate benefits for the wider Australian economy in a post-COVID world.

The enhanced reforms to the R&D Tax Incentive apply to income years beginning on or after 1 July 2021. Some administrative elements of the reforms will apply from 1 January 2021.

The Government is providing $24.7 million to help small business operators use technology to improve their processes. This includes providing an additional 10,000 places for the Australian Small Business Advisory Services (ASBAS) Digital Solutions program. The program offers low cost, high quality advice on a range of digital solutions.

Small business owners will have access to free, evidence-based mental health coaching services under Beyond Blue’s NewAccess for Small Business service. The Australian Government has committed $4.26 million to provide mental health support for small businesses in partnership with the Australian Small Business and Family Enterprise Ombudsman.

The Government is unlocking the potential of women in science, technology, engineering and mathematics by providing $35.9 million to expand the Boosting Female Founders Initiative, $10 million to extend the Women in STEM and Entrepreneurship grants program and $2 million to extend the Women in STEM Ambassador initiative.

The Government is making changes to our insolvency framework to better serve Australian small businesses, their creditors and their employees. The changes will introduce new processes from 1 January 2021, reducing complexity, time and costs for small businesses.

The changes will help more Australian small businesses to quickly restructure and to survive the economic impact of COVID-19. Where restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.