The Australian Government has released its federal budget for 2022–23, which includes several incentives and subsidies to help various businesses. In this article, we’ll take a look at what’s in the budget and what it could mean for trades and field service businesses.
Small business support package
The Australian Government funded new initiatives to support small businesses with a turnover of less than $50 million per year. Some initiatives relevant for trades businesses include:
- Fair Work Commission funding – The Fair Work Commission will get $5.6 million over four years starting in April 2022. These funds will be used to help businesses with protecting general working rights, unfair dismissals, and workplace safety.
- New Access for Small Business Owners – Mental health organisation Beyond Blue will get $4.6 million in funding starting 1 April 2022 to provide comprehensive support and free counselling to small-business owners. Mental health support is particularly vital for the trades industry, which is known to have the highest rates of depression, anxiety, and suicide.
- Small Business Debt Helpline – Financial Counselling Australia will receive $2.1 million in funding from 2021 to 2022 to help small businesses better manage their finances and debt. Many trades businesses suffered from low revenue due to the economic disruption caused by the COVID-19 pandemic. The Debt Helpline programme will provide the necessary financial counselling to struggling businesses.
- Australian Small Business and Family Enterprise Ombudsman (ASBFEO) – ASBEFO will get $8 million to provide small businesses with financial management and cash flow advice.
Technology investment boost
To promote digital adoption, the Federal Government is providing small businesses with a temporary technology investment boost. From 29 March 2022 to 30 June 2023, eligible businesses can deduct an additional 20% of the costs incurred on expenditures related to their digital adoption efforts. This means for every $100 that trades businesses spend on technology, they can deduct $120. Some examples of acceptable technology expenditures include cloud computing services, e-invoicing systems, cybersecurity, and job management platforms. The technology boost caps annual expenditures at $100,000.
Skills and training boost
Small businesses looking to upskill their tradies will be able to claim an additional 20% deduction on the cost of external training courses. Australian and online employees are eligible for this incentive as long as the trainer is registered in Australia. The training expense must also be paid for between 29 March 2022 and 30 June 2024 to qualify for the deduction.
Fuel excise reduction
The Australian Government is cutting the excise on petrol and diesel fuel for six months starting 30 March 2022. In other words, current fuel tax rates will be 22 cents per litre instead of 44 cents. This will provide momentary relief for Australian households and businesses, given that fuel prices are surging due to the Russia-Ukraine crisis. The fuel excise reduction also benefits field technicians who need to drive to multiple jobsites and want to limit travel costs.
Apprenticeship wage subsidies
The Federal Government directed $2.8 billion of the budget to incentivise apprenticeship programmes starting from 29 March 2022 to 30 June 2024. Their goal is to increase the number of qualified tradespeople by making vocational training more financially accessible to both employers and apprentices. Apprentices in high-priority sectors can receive $5,000 in payments, while employers with apprenticeship programmes can get up to $15,000 in wage subsidies. High-priority apprenticeships include general plumbing, electrical, and construction work.
Migration programme for skilled labour
Due to labour shortages, the Department of Home Affairs is enabling trades businesses to recruit more skilled migrant workers. The 2022–23 Migration Program is set to fill 109,900 vacancies in priority occupations such as construction managers, surveyors, and electrical engineers. The program makes it easier for skilled migrant workers to secure a visa through employer sponsorships, state/territory nominations, and independent contract work.
COVID-19 test tax deductibles
Trades workers today are subjected to regular PCR or rapid antigen tests before going to the workplace. Paying for these tests drives up costs for individuals and businesses, but fortunately, they’re tax deductible. From 1 July 2021, tradies can claim a deduction on COVID-19 testing procedures taken for work purposes. The fringe benefits tax will also not apply for any tests provided by an employer to their trades workers.
New pay-as-you-go (PAYG) instalment system
Businesses will have the option to settle their PAYG instalments based on current financial performance taken from accounting software. This new system is better for trades business because PAYG tax liabilities will adjust to the company’s cash flow. While no official announcement has been made, the new system is predicted to start on 1 January 2024.
Taking advantage of the various concessions in the 2022–23 budget will certainly help you grow your trades business. If you want to stay updated on the latest developments in the trades industry, look out for WorkBuddy’s future posts. We also provide a world-class job management system that can increase your company’s productivity and profitability. Book a free demo today to learn more.
