Australian budget announces new tax break for small businesses

The incentive will provide $310 million in tax relief and support up to 3.8 million businesses make investments like electrifying their heating and cooling systems, installing batteries and upgrading to high-efficiency electrical goods.

Businesses with annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient use of energy, from July 1, 2023, until June 30, 2024.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

This is in addition to $62.6 million towards energy efficiency grants for small and medium enterprises in the October budget.

The government is also making it easier for small businesses to invest and grow by providing $290 million in cash flow support through the $20,000 instant asset write-off.

It is providing approximately 2.1 million eligible small businesses with cash-flow relief by halving the increase in their quarterly tax instalments for goods and services tax and income tax in fiscal 2023-24.

Instalments will only increase by 6 per cent instead of 12 per cent, which better reflects the economic conditions currently faced by the sector.

A new $392.4-million Industry Growth Programme will help support small to medium businesses and start-ups develop new products and services to grow their operations.

The budget announced funding the establishment of a Net Zero Authority to help guide the net zero transformation. 

As part of the Powering the Regions Fund, the $400-million Industrial Transformation Stream will support the growth of new clean energy industries in regional areas, as well as innovative efforts to decarbonise existing industrial activities.

The government's $2-billion Hydrogen Headstart will accelerate large-scale renewable hydrogen projects. Australia already has the largest pipeline of renewable hydrogen projects in the world.

Hydrogen Headstart will bridge the commercial gap for early-stage projects, and position Australia to be a world leading hydrogen producer and exporter, the budget document said.

The government will provide $38.2 million to establish a Guarantee of Origin scheme to underpin markets for green energy, including hydrogen and other low emissions products.

It is also providing $14.8 million to establish the Powering Australia Industry Growth Centre, which will support Australian businesses looking to manufacture, commercialise and adopt renewable technologies.

Fibre2Fashion News Desk (DS)