Relief less than hoped for ‘squeezed’ small businesses

Up to four million small businesses will continue to receive tax relief as they battle slowing consumer spending, but calls to increase support have been unheeded.

The instant asset write-off has been extended until the end of June 2025, allowing businesses with an annual turnover of less than $10 million to deduct the full cost of assets less than $20,000.

Together with $325 rebates on power bills, the measure are designed to help employers manage the mounting cost of doing business.

“Australia’s small businesses employ around 5.2 million people and contribute more than $500 billion to the economy, which is why the Albanese government is investing in these crucial new supports,” Small Business Minister Julie Collins said.

But the move will disappoint business groups, such as the Australian Chamber of Commerce and Industry, which has been calling for the threshold for eligible depreciable assets to be raised from $20,000 to $30,000.

The Council of Small Business Organisations Australia also called for eligibility to be broadened to businesses with turnover of up to $50 million.

“Falling sales revenue combined with rising input costs have put a major squeeze on the profitability and viability of Australia’s 2.5 million small business,” the council said in a pre-budget submission.

“There is a clear need for small business relief measures but if they are not coupled with a focus on better regulation and productive policy, they will be in vain.”

Abolishing 457 “nuisance” tariffs and reducing compliance costs for businesses may go some way to achieving that.

The government will eliminate tariffs on a wide range of imported goods, including toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products.

Despite stubbornly high inflation and slowing economic growth, Treasury predicted a solid pipeline of business investment.

Total business investment is predicted to grow by 5.5 per cent this financial year, before slowing to one per cent in 2024/25, although non-mining investment will grow by a stronger 2.5 per cent.

The positive outlook for business investment was driven by high levels of capacity utilisation and a desire to drive down costs, which have offset the negative impact of global economic uncertainty and slowing household spending.


Jacob Shteyman
(Australian Associated Press)



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