13 May 2021

Employment growth and the broader economic recovery are again the focus of the Federal Budget heading into the 2022 financial year, with increased support for unemployed Australians listed as the single largest item of new spending in the Budget.

As employers of nearly half of the Australian workforce, the 2022 Budget announced further measures targeted at stimulating investment and growth in Australian small businesses to help maintain employment above pre-pandemic levels.

On balance, the announcements will come as welcome news to the Australian small businesses who will be seen as a driving force behind Australia’s economic recovery from the coronavirus.

Other notable announcements affecting small businesses include:

Extension to loss carry-back measures

The loss carry-back measures announced will permit eligible companies to offset losses derived in the 2020 – 2023 income years against profits taxed as far back as the 2019 income year. This will provide a welcome cash boost to companies filing income tax returns in respect of loss years. This is regarded as preferable to the existing approach of deducting losses against future profits.

Full expensing of eligible depreciating assets

The extension of these measures will permit the full cost of assets acquired by eligible businesses in the period from 7:30pm AEDT on 6 October 2020 to 30 June 2023 to be deducted in the year the assets are first used or installed ready for use by 30 June 2023. Significant equipment purchases are further incentivised when viewed in conjunction with the loss carry-back measures as there is no limit to the value of assets that can be written off.

Employment incentives

Small businesses looking to hire are encouraged to review their eligibility for the jobactive, transition to work and ParentsNext incentive schemes. From 1 July 2021, these schemes will offer subsidies of up to $10,000 to help businesses hire staff.

The Boosting Apprenticeship Commencements subsidy has been extended to new apprentices and trainees commencing employment by 31 March 2022. It provides for 50 percent of wages paid to new or recommencing apprentices for a 12-month period up to a maximum of $7,000 per quarter to an unlimited number of eligible trainees or apprentices.

Those looking to start a business of their own may wish to consider their eligibility for assistance through the New Enterprise Incentive Scheme, which offers free accredited small business training, business plan development, mentoring and potentially an NEIS allowance.

Superannuation Guarantee

Small business owners should be aware the employer exemption from superannuation guarantee for individuals earning less than $450 in salary or wages in a calendar month has been removed. The change is planned to take effect from 1 July 2022.

See our full Federal Budget Analysis

Our team of experts has been busy developing insights and analysis that breaks down what the Budget means for Australian businesses and individuals.

Check out the full coverage of the Federal Budget 2021/22, which will continue to develop throughout the week as new insights and video content are published.

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