With the recent federal budget released this week in the Australian market, we decided to share some key comments from Australian companies and break down some highlights from the budget.
Some key points from the budget were as follows:
- Digital Technologies:
- A tax deduction of 120% for expenses and depreciating assets for small businesses with less than $50m turnover.
- Designed to encourage businesses to invest in digital technologies (i.e. cyber security systems, cloud computing subscriptions).
- Applies from 29 March 2022 at 7:30 PM until 30 June 2023.
- PAYG Instalment System:
- Modernisation of the PAYG instalment system.
- Instalments are now based on the current financial performance of the business.
- GDP annual uplift for small businesses reduced from 10% to 2%.
- Primarily a timing benefit for businesses due to tax liability levelling out when annual returns are lodged.
Business Owners had the following to say about the budget this year:
“It is good that the government is providing extra support in this budget for first home buyers. That said, first time home buyers must be attentive when applying for a home loan. Start with checking your credit score and credit report so you’re aware of what the banks and lenders will see as these may be considered in your application.
After all, a rejected home loan application or multiple applications can impact your credit score and financial profile”
Lloyd Smith – General Manager at Clearscore
“We welcome the government to continue to focus on investing in the child care sector to help alleviate the growing cost of living pressures. We see investing in child care as a win-win policy for children, the workforce and the economy.”
Winfrey Dai – Director at Raising Stars
“This scheme will see the deposit required to buy a home reduced to just 5% – and the government guaranteeing the other 15%. This will be of great assistance to young people trying to get into market regional areas and single parents. The major benefit is it will allow those borrowers who participate to avoid paying tens of thousands of dollars in lenders’ mortgage insurance.
We know that many Australians pay LMI due to borrowers having a deposit of less than 20%. With the average house price in Australia’s capital cities exceeding $1 million, it’s great to see the Morrison Government helping keep the Australian dream of owning a home alive.”
Carl Hammerschmidt – CEO of Joust
“During the pandemic, revenue has been incredibly volatile with significant declines during lockdowns followed by steep increases afterwards. As a small business, Larsen Jewellery will benefit from the ability to calculate PAYG instalments based on financial performance, and thereby avoid overpayments during the down periods.
In addition, like many family-owned businesses, Larsen Jewellery is owned through a discretionary trust and will therefore benefit from being able to lodge its income tax returns electronically.
As a small and growing Australian business, any assistance that we receive in the federal budget is greatly appreciated after what has been two very difficult years.”
Lars Larsen – Director of Larsen Jewellery
“We welcome anything that supports affordability. High petrol prices are just one of many factors squeezing consumers like the limited supply and soaring prices of vehicles.”
Shaun Janks – Co-Founder & Chief at DingGo