The 2024 Australian federal budget has recently been announced. To summarise the provisions from the perspective of businesses, it’s basically business as usual. However, while there might not be a lot that’s been put on the table for businesses, there’s a few things to consider.

Small Business Instant Asset Write-Off

The government has committed to continue the $20,000 Instant Asset Write-Off for small businesses for another year. This was scheduled to end as at 30 June 2024, and is now set to be in force until at least 30 June 2025. Businesses with annual turnover below $10 million can claim an immediate deduction for certain assets purchased that have a value of $20,000 or less. This is still a temporary adjustment to the standard depreciation rules in the tax legislation, and there is always a lingering question of how long these provisions will be in force for. That can have an impact on business decision making as delaying the purchase of an asset could result in poorer depreciation benefits, should these provisions not be renewed in future Budgets. This brings some certainty at least until the end of the 2025 financial year.

Energy Price Relief Plan

Continuing a provision introduced in last year’s Budget for another 12 months, small businesses that meet the relevant State/Territory definition of an electricity “Small Customer” will be eligible to receive an annual rebate of $325 on their electricity bills. From a Queensland, NSW, and ACT perspective, a “Small Customer” is a customer using less than 100MWh of electricity annually. In Victoria, this threshold is only 40MWh. South Australia, NT and WA provide for up to 160MWh annual consumption, while Tasmania provides for up to 150MWh consumption.

Import Tariffs

For importers, the Budget announced that there have been some changes to import tariffs for the purposes of reducing red tape for importers and assisting Ukraine. There are 457 “nuisance tariffs” being abolished from 1 July 2024, which will make the administration of importing goods simpler for businesses that previously needed to consider how these interacted with various free trade agreements, depending on the countries where goods originated.

An extension to an existing provision in last year’s Budget was also announced, exempting import of most goods from Ukraine from customs duty up until 3 July 2026.

Administrative Provisions

The Budget has included some detail of a number of tax/administrative provisions, essentially detailing the funding provided to the ATO and government departments to aid in the administration of business and tax.

• There has been a provision of $10.8m over two years from 2024-25 to the Small Business Debt Helpline and NewAccess for Small Business Owners program. This is intended to provide small businesses with additional support including confidential financial counselling and mental health support.

• The Small Business Ombudsman has been provided with $2.8m additional funding to aid in its support of business-to-business disputes and dispute resolution processes.

• There was a provision announced back in the 2019-20 Budget that proposed to add tax compliance obligations to ABN holders, whereby non-lodgement of tax returns could result in the cancellation of ABN’s, and ABN holders would be required to confirm their details annually. This year’s Budget announces that the government will not proceed with these measures.

• The government announced that they plan to amend the Tax Law to give the ATO the power to choose not to apply tax refunds against debts that were placed on hold prior to 1 January 2017. The ATO have historically placed some tax debts on hold when they determined it was not economically viable to recover the debts, however they have not been able to cancel these debts nor elect to release refunds to taxpayers for subsequent lodgements. There are some situations where releasing refunds would help small businesses so this discretion, if enacted by the Commissioner, may be of benefit to some businesses with old debts on hold. Of all the provisions announced, this is one that may not make it through the legislation process, and if it does, still heavily relies on the Commissioner to exercise the discretion.

At the time of writing, these announcements are not yet law. However there isn’t too much contention around the major announcements, including the first two discussed here and we’d expect those to be enacted in legislation in due course. Don’t hesitate to contact your Altitude Adviser to discuss any of these provisions, and how they might affect you and your business.