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MYOB has been on the ground in Canberra to get all the info first-hand and break down what's in the Budget for you and your clients.
What the 2024 Federal Budget means for you and your clients
15 May 2024
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3 minute read
The highly anticipated 2024 Federal Budget has promised to address the continued rising cost of living stress, with energy bill relief at the forefront of these measures.
Treasurer Dr Jim Chalmers handed down the government's third Budget, determined to deliver cost of living relief without adding to inflation.
Our latest MYOB Business Monitor research of 1,000 small and medium sized enterprises (SMEs) shows Budget measures that relieve cost-of-living pressure are at the top of the list for SMEs, above the removal of red tape and lowering of the company tax rate.
A separate survey of 1,000 consumers, commissioned in the weeks leading up to the Budget, found cost-of-living is impacting 56% of Australian consumers. Sixty-five per cent said they’re spending less on food delivery or going out for meals and 62% are spending less on entertainment. This in turn impacts the bottom line of the nation’s 2.5+ million SMEs.
Businesses to benefit
MYOB General Manager of SME, Emma Fawcett, said the Federal Budget demonstrated a focus on balancing challenging economic conditions with initiatives to boost productivity and growth.
“Our latest MYOB Business Monitor research shows measures that relieve cost-of-living pressures were the number one item SMEs wanted in the Budget, and measures like the energy and tax relief will be welcomed.”
The Energy Bill Relief Fund and confirmed tax cuts will be welcome news for both the average Australian and SMEs.
“Small businesses are feeling the impact of cost-of-living on two fronts,” Emma says.
“Their customers are spending less with them and the cost of doing business is growing. More money in the hip pockets of all Australians means more will flow through to small businesses and help them drive Australia's economic recovery.
“We’re pleased to see targeted incentives that encourage businesses to make investments that will enhance their productivity, improve innovation, and contribute to the growth of Australia’s vibrant and important SME community.”
What's in it for SMEs
The 2024–25 Federal Budget has introduced several measures aimed at supporting small businesses in Australia. Here are the key takeaways:
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Tax Cuts and Incentives:
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Once enacted, extension of the $20,000 instant asset write-off until June 30, 2025, will enable small businesses to deduct the cost of new assets immediately. There will be an expected $290 million in cash flow support for up to four million small businesses to help with immediate financial pressures.
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Energy Bill Relief:
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The Budget allocates $3.5 billion in new energy bill relief, affecting one million small businesses. This includes a rebate that helps reduce operational costs associated with energy prices.
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Support for Innovation and Sustainability:
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The introduction of the $22.7 billion Future Made in Australia package, which includes production tax incentives and funding for innovation, particularly in green industries, offers opportunities for small businesses to innovate and adapt to new technologies.
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Infrastructure and Housing Investments:
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Significant investment in housing and infrastructure has been announced, including efforts to clear local infrastructure bottlenecks and fund more social and affordable housing. This can stimulate local economies and create opportunities for small businesses involved in construction and related services.
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Enhanced Competition and Regulatory Relief:
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Measures to boost competition and reduce compliance costs, including strengthening the mergers regime and abolishing nuisance tariffs. This will help small businesses by lowering barriers to entry and reducing regulatory burdens.
These initiatives are designed to ease cost of living pressures, support economic growth, and enhance the capabilities of small businesses to thrive in a changing economic landscape.
“At a time when businesses globally need to achieve more with less, it’s great to see more support for businesses to navigate these challenging times in the short term, positioning them in a leadership role for Australia’s future economic growth,” Emma says.
“Australia’s 2.5+ million small businesses employ over 7.4 million Australians and make up 99% of Australian private enterprises. They are the lifeblood of the economy and it is pleasing to see the Government deliver support for them to ensure Australia's future prosperity.”
MYOB's verdict
We asked Australia's small business community what they wanted to see from the Budget, and one in five (23%) told us that measures to address energy costs were on their wish list.
The Energy Bill Relief Fund will assist in some way to helping small businesses tackle rising costs. It’s a step in the right direction for the nation’s 2.5+ million SMEs, who are struggling with the rising cost of doing business. They feel the burden of inflation twice, with consumers spending less and operational costs on the rise.
It’s our hope that cost of living relief more broadly will put more money in the hip pockets of Australians, which can flow through to the small and medium-sized businesses that together contribute more than half of the nation’s economy.
