Earlier this week the federal government announced the federal budget for 2022-23, and with an election looming there’s some uncertainty over how many of the announced measures will be implemented.
However, after a tough 12 months, there’s some welcome financial relief and incentives for hospitality businesses. To cut through the noise, we’ve nailed down the most important details for small businesses and how they’re set to impact hospitality venues in the coming financial year.
- Apprenticeships and training
- Instant asset write off
- Business technology
- Beer excise
- Cost of living & wellbeing
1. Apprenticeships and training
To help ease some of the staffing woes felt by businesses in recent months, a new incentive scheme has been introduced to encourage businesses to hire more apprentices.
The new Australian Apprenticeships Incentive Scheme will offer wage subsidies of:
- 10% for first and second-year apprentices
- 5% for third-year apprentices
It’s restricted to a list of “priority” occupations, which have yet to be released. If a business hires someone for a “non-priority” role, they’ll get a one-off payment of $3,500.
While apprentices starting their training in a priority occupation will get $5,000 in direct cash payments over their first two years.
From July 2024, wage subsidies are scrapped and replaced with a $4,000 hiring incentive for employers and $3,000 for apprentices, but only if they’re on the priority list.
For businesses looking to upskill their workforce, they’ll be able to access a 20% bonus deduction for eligible external training courses. This tax relief scheme will be eligible for small businesses with an aggregated annual turnover of less than $50 million.
The courses must be undertaken by employees online or in-person in Australia by external education providers registered in Australia.
2. Instant asset write-off
The Government’s instant asset write-off scheme’s eligibility criteria will be extended to June 30, 2023, to encourage further business investment.
Businesses with an annual turnover of less than $5 billion will be able to write off the cost of purchasing new or second-hand assets in the year the asset is first used or installed ready for use.
For more information on instant asset write-offs, please visit the ATO website.
3. Business technology
Small businesses with an annual turnover of less than $50 million will be able to access a new 20% bonus tax deduction on business expenses and depreciating assets that support digital workplace items.
“Every hundred dollars these small businesses spend on digital technologies like cloud computing, e-invoicing, cybersecurity and web design will see them get a $120 tax deduction,” said Treasurer Frydenberg.
Eligible digital expenses include (but are not exclusive to) portable payment devices, eCommerce platforms, cyber security systems, POS software subscriptions and other cloud-based services.
The deduction will apply to purchases made between March 29, 2022, and June 30, 2023. Deductions apply to up to $100,000 of expenditure per year.
4. Beer excise
The Brewers Association of Australia has been calling for a way to help pubs and hospitality venues struggling with lower trade because of the pandemic.
Despite rumours that the federal government would halve the excise on draught beer, there’s been no relief in the budget.
“A cut to this hidden twice-yearly tax would shave about 30c off the cost of a schooner – that might not mean much to a politician, but it means a hell of a lot to many people in the front bar struggling to make ends meet,” said AHA National CEO Stephen Ferguson.
5. Cost of living and wellbeing
There were several cost of living initiatives released in the budget, and while these schemes might not directly impact hospitality businesses, they will benefit business owners and staff.
The Low and Middle Income Tax Offset will provide low and middle-income earners (roughly 10 million Australians) with $420 back in their tax return, and some may get up to $1,500 back at tax time.
The cost of fuel will also be lowered with the government cutting the fuel excise in half for the next six months – saving drivers 22c per litre.
Small businesses will also be able to access free mental health resources from Beyond Blue over a two-year period.
The information in this article was accurate at the time of publishing, Mar 31, 2022. For more information, please visit the Federal Budget website.