2023/24 Budget – What does it mean for my Business?

There are a number of budget measures that small business owners need to be aware of, particularly if you are planning on purchasing new plant and equipment. Below is a summary of measures that impact on small business:

Immediate asset write off

The current rule for new purchases of plant and equipment is that a small business can claim the full amount of the cost immediately. This is coming to an end on 30 June 2023. If you want to be able to claim the full amount of your new asset purchase in the year it was purchased, you’ll need to have the asset installed and ready for use by 30 June 2023. If it is ready after 30 June, the new rules will apply. The new rule is basically going back to the rule that was in place several years ago. Small businesses with turnover under $10 million can immediately claim the cost of an asset which costs under $20,000. If the asset costs more than $20,000 it can be added to a small business pool and depreciated at 15% in the first year and 30% thereafter. The new $20,000 amount applies to assets installed and ready for use before 30 June 2024.

Small Business Energy Incentive

It is proposed that Small businesses with a turnover under $50 million will be able to claim a bonus 20% deduction on expenditure that supports electrification or more efficient use of energy. The bonus deduction is capped at $20,000 and applies to assets first used or installed between 1 July 2023 and 30 June 2024. Eligible expenditure includes energy efficient electrical goods, assets that support electrification such as heat pumps and electric heating and cooling systems and demand management assets such as batteries or thermal energy storage. Some exclusions apply such as electric cars, renewable energy generation assets, capital works and assets that are not connected to the electricity grid and use fossil fuels.

Payday Super

The Government intends to require all employers to pay their employees’ super guarantee contributions at the same time as their salary and wages from 1 July 2026. The details of how this will work are yet to be announced.

Expiration of Loss Carry Back

The Loss Carry back offset that was introduced during COVID will no longer be allowed after 30 June 2023.