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In a week where the federal government struggled to pass legislation through parliament, a new bill introducing two tax incentives into the Australian business climate was successfully ratified.
Targeted at supercharging Australia’s small and medium-sized enterprises (SMEs), the $1.5 billion package will assist businesses training and upskilling employees and improve their digital and tech capacity.
Titled the Technology Boost and the Skills and Training Boost, the scheme will be backdated to 29 March 2022, guaranteeing national small and medium businesses will receive the full benefits of the program.
As part of the initiative, SMEs with an annual turnover below $50 million will receive access to a bonus 20 per cent deduction for eligible expenditure on external training of employees by providers registered in Australia, valid until 30 June 2024.
Additionally, small and medium businesses will also be eligible to access a bonus 20 per cent deduction that will support the uptake of digital technologies, with this initiative valid until 30 June 2023. A federal government media release failed to specify the turnover threshold necessary for this specific initiative.
Stephen Jones, Australian Assistant Treasurer and minister for financial services, explained the scheme will allow the “millions of small businesses that have already invested in new technology this financial year” to undertake the process of enacting these tax time deductions.
Given the importance of SMEs to the Australian economy, federal Treasurer Jim Chalmers said the government “want to create more opportunities for them to grow and prosper”.
Up to 3.8 million small businesses operating on Australian shores are expected to benefit from these incentives.
Mr Chalmers insisted “when small businesses invest in digital technologies and upskilling staff, it boosts their productivity and drives economic growth”.
He maintained backdating the deductions ensures “businesses are rewarded for the investments they’ve been making and can take advantage of this extra support”.
The government expects these measures to release some pressures from SMEs and aid the recuperation of certain costs of the investments made into both their employees and digital operations.
Julie Collins, federal minister for small business, brandished the incentives package as “practical support” to assist small businesses’ recovery following difficult, recent years.
“These new incentives passed today will set Australia’s small businesses up for more success,” she declared.
Mr Jones concluded both the Technology Boost and the Skills and Training Boost are “great news at a time where small businesses most need cash flow support”.
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