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1. Extension of Instant Asset Write-Off

The $20,000 instant asset write-off for small businesses with an annual turnover of less than $10 million has been extended until 30 June 2025. This allows small businesses to immediately deduct eligible assets costing less than $20,000, helping them reinvest and grow.

Why It Matters:

• Cash Flow Improvement: The instant asset write-off allows small businesses to immediately deduct the cost of eligible assets, improving cash flow and reducing tax liabilities. This is crucial for businesses managing tight budgets.
• Investment in Productivity: By making it easier to invest in new equipment and technology, businesses can enhance productivity and efficiency, leading to potential growth and increased competitiveness in the market.
• Planning Certainty: The extension until 30 June 2025 provides businesses with certainty and stability in their financial planning, enabling them to make informed decisions about asset purchases and investments.

Opportunities:

• Upgrading Assets: Small businesses can take advantage of this extension to upgrade or replace outdated equipment, leading to better operational performance.
• Financial Strategy: Brokers can advise clients on optimal asset purchasing strategies to maximise tax benefits and improve overall financial health.

2. Support for Local Industry

The Budget includes substantial investments in large-scale government projects, which are expected to rely heavily on small businesses for completion. Initiatives like the $1.7 billion Future Made In Australia Innovation Fund and $1.5 billion for renewable energy production incentives aim to transform Australia into a leader in green energy and innovation. Small businesses should be prepared to engage with these projects and leverage the opportunities they present.

Why It Matters:

• Economic Stimulus: Large-scale government projects stimulate the economy and create opportunities for small businesses to participate as contractors or suppliers, driving revenue and job creation.
• Innovation and Growth: Investments in sectors like green energy and advanced manufacturing encourage innovation and can position businesses at the forefront of emerging industries.
• Market Expansion: Engaging in government projects can help small businesses expand their market reach and build a portfolio that includes significant, high-profile clients.

Opportunities:

• Government Contracts: Small businesses should seek to qualify and bid for government contracts, which can provide steady work and significant income.
• Networking and Partnerships: These projects offer opportunities for businesses to network and form partnerships with larger corporations and other small businesses, enhancing their market position and capabilities.

3. Labour and Skills Support

The Budget includes several measures to support labour and skills development:

• Expanded Eligibility for New Energy Apprenticeships Program: The program now includes clean energy, construction, and advanced manufacturing sectors. This expansion provides small businesses in these industries with access to $10,000 in incentive payments.
• Extended Support Payments and Hiring Incentives for Apprentices: The government will extend its $5,000 support payments to apprentices in priority occupations until 1 July 2025, along with a $5,000 hiring incentive for employers.
• Additional TAFE Course Placements: An extra 20,000 fee-free TAFE places will be available in courses relevant to the construction sector, addressing critical skills shortages and supporting industry growth.

Why It Matters:

• Addressing Skills Shortages: The expansion of apprenticeship programs and additional TAFE placements help fill critical skills gaps in key industries, ensuring businesses have access to a skilled workforce.
• Reducing Recruitment Costs: Support payments and hiring incentives lower the financial burden on businesses when recruiting and training new employees, making it easier to scale operations.
• Future-Proofing: By investing in training and development, businesses can future-proof their operations against evolving industry demands and technological advancements.

Opportunities:

• Workforce Development: Businesses can leverage these programs to develop a skilled and capable workforce, improving operational efficiency and innovation.
• Cost Savings: Employers can benefit from financial incentives when hiring apprentices, reducing overall labour costs while investing in the long-term capabilities of their team.
• Strategic Growth: Brokers can guide businesses in identifying and applying for these programs, aligning their growth strategies with available government support to maximise benefits.

Conclusion

The 2024-2025 Federal Budget presents significant opportunities for small businesses, particularly through the extension of the instant asset write-off, support for local industry, and enhanced labour and skills programs. These measures are designed to provide financial relief, stimulate innovation, and address critical skills shortages.

Brokers have a vital role in guiding businesses through these opportunities, ensuring they maximise available incentives and support. By strategically aligning their financial and operational plans with government programs, businesses can achieve sustainable growth and competitiveness in a dynamic market environment.