Budget 2024-25: Business & employers
This pre-election budget is like a breath of fresh air, designed to lighten the load of living costs for everyone. In this article, we go through the measures that will benefit over a million small businesses and various industries.
From the Energy Bill Relief Fund providing businesses with $325 off their energy bills to tax incentives under the "Future Made in Australia" initiative for renewable hydrogen production and the processing of critical minerals, the landscape for business growth and sustainable practices is evolving.
Moreover, focused support is available for sectors like the film industry with the Producer Tax Offset and small businesses with improved payment times, mental health support, and franchising sector code changes. This article will dissect each of these changes and explore their potential benefits for small businesses and specific industries.
Interested in understanding how the budget impacts superannuation, investors, or small businesses? Explore our insightful blogs by clicking here:
$325 Energy Relief for Small Businesses Starting 1 July 2024
Approximately one million small businesses will benefit from a $325 reduction in their energy bills throughout 2024–25. This support will be automatically applied as a quarterly credit on their energy statements.
Households will receive energy relief through a $300 rebate.
Costing $3.5 billion over three years starting from 2023-24, this measure extends and enhances the Energy Bill Relief Fund.
Resources
Media release: New power bill relief
Extension of $20k Instant Asset Write-off for Small Businesses to June 30, 2025
Small businesses with an aggregate turnover of less than $10 million can now immediately deduct the full cost of eligible depreciating assets priced under $20,000. This applies to assets first used or installed between 1 July 2023 and 30 June 2025. This measure extends the 2023-24 Budget announcement through the 2024-25 financial year.
"Immediately deductible" refers to the ability to claim a tax deduction for an asset within the same income year it was purchased and used, or made ready for use.
For businesses registered for GST, the asset's cost must be under $20,000 after deducting GST credits. If the business is not registered for GST, the cost must be under $20,000 including GST. This write-off applies to each individual asset, allowing small businesses to deduct the cost of multiple assets.
The rules are applicable solely to assets covered by the depreciation provisions. Expenditure on capital improvements to buildings, which falls under the capital works rules, is not expected to qualify.
Assets valued at $20,000 or more, which are not eligible for immediate deduction, can be included in the small business simplified depreciation pool. These assets are depreciated at a rate of 15% in the first income year and 30% in each subsequent year. This applies to assets acquired by a small business entity that opts for the simplified depreciation rules.
The rule preventing small businesses from rejoining the simplified depreciation regime for five years after opting out will remain suspended until June 30, 2025.
The increased small business instant asset write-off announced in the 2023-24 Federal Budget is not yet law. Refer to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 for details. Senate amendments propose raising the threshold from $20,000 to $30,000 and extending the measure to include medium-sized entities.
Resources
Media Release: Budget delivers for Australia’s small businesses
The Future Made in Australia initiative
The Government has unveiled an ambitious plan to position Australia as a "renewable energy superpower." This $22.7 billion initiative aims to attract substantial private sector investment into key industries, essential for leveraging the economic and industrial advantages of transitioning to net zero. This strategy not only secures Australia's place in a shifting global economic and strategic landscape but also fosters sustainable growth and innovation.
The Future Made in Australia Act will create a strategic policy framework, prioritizing industries where Australia holds a genuine economic advantage. It will promote a sustainable path to net zero, enhance regional and workforce capabilities, and bolster national security and economic resilience.
Transforming Australia into a Renewable Energy Superpower Timeline: From 2027–28 to 2040–41
As part of the Future Made in Australia initiative, the Government will allocate approximately $19.7 billion over a decade starting in 2024–25 to boost investment in priority industries. These sectors include renewable hydrogen, green metals, low-carbon liquid fuels, critical mineral refining and processing, and the manufacturing of clean energy technologies, such as solar and battery supply chains.
This initiative includes two time-limited tax incentives aimed at fostering investment in emerging industries:
- Critical Minerals Production Tax Incentive (2027-28 to 2040-41):
- Designed to bolster the downstream refining and processing of Australia's 31 critical minerals, enhancing supply chain resilience.
- The incentive is valued at 10% of relevant processing and refining costs.
- Applicable for up to 10 years per project, covering production from 2027-28 to 2039-40, for projects that reach final investment decisions by 2030.
- Hydrogen Production Tax Incentive (2027-28 to 2040-41):
- Aimed at producers of renewable hydrogen to promote the growth of a competitive hydrogen industry and support Australia's decarbonisation goals.
- The incentive offers $2 per kilogram of renewable hydrogen produced, applicable for up to 10 years per project, covering production from 2027-28 to 2039-40 for projects that make final investment decisions by 2030.
- Further details are subject to consultation.
The proposed tax incentives will be effective from the 2027–28 to the 2040–41 income years and are strategically crafted to foster innovation and investment in key sectors, promoting sustainable development and economic resilience.
Funding measures
The Government is getting into business with industry to encourage investment in select areas:
- $10.2 million in 2024–25 for pre-feasibility studies for critical mineral common-user processing facilities in partnership with state and territory governments to enhance Australia’s capacity to process critical minerals, sovereign capability and economic resilience.
- $1.3 billion over ten years from 2024–25 (and an average of $151.6 million per year from 2034–35 to 2038–39) for an additional round of the Hydrogen Headstart program to bridge the green premium for early-mover renewable hydrogen projects.
- $17.1 million over four years from 2024–25 (and an additional $2.5 million in 2028–29) to deliver the 2024 National Hydrogen Strategy, including hydrogen infrastructure planning, social license and industry safety training and regulation.
- $1.5 billion over seven years from 2027–28 (and an average of $125.0 million per year from 2034–35 to 2036–37) to the Australian Renewable Energy Agency to invest in renewable energy and related technologies.
- $1.7 billion over ten years from 2024–25 for the Future Made in Australia Innovation Fund (administered by the Australian Renewable Energy Agency), to pilot and demonstration projects and early stage development in priority sectors, including renewable hydrogen, green metals, low carbon liquid fuels and clean energy technology manufacturing such as batteries.
- $1.4 billion over 11 years from 2023–24 (and $66.8 million per year from 2034–35 to 2036–37) to support manufacturing of clean energy technologies including solar and battery manufacturing.
- $20.9 million over four years from 2024–25 (and $1.2 million per year ongoing) to undertake further consultation on incentives to support the production of, and demand for, low carbon liquid fuels.
- $18.1 million over six years from 2024–25 for foundational initiatives to expedite the emergence of Australia’s green metals industry.
- $11.4 million over four years from 2024–25 (and $1.1 million per year ongoing) to fast track the initial phase of the Guarantee of Origin Scheme for green hydrogen and bring forward work on green metals, including iron, steel and aluminium.
Resources
Treasury: Future Made in Australia National Interest Framework supporting paper
Fact Sheet: Future Made in Australia
Tax Offset for Film Producers in the 2025-26 Income Year
The Producer Tax Offset is a refundable tax credit for eligible Australian expenditures incurred during the production of Australian films, subject to specific conditions. The offset amounts are as follows:
- 40% of the company's qualifying Australian production expenditure (QAPE) for a feature film
- 20% of the company's total QAPE for a film that is not a feature film
The required minimum duration varies based on the production format.
Under the Government’s newly announced National Cultural Policy, changes to the Producer Tax Offset will take effect from 2025–26. These changes include:
- Eliminating the minimum length requirements for content
- Removing the 20% cap on above-the-line costs relative to total QAPE.
Support Services for Small Businesses Over Four Years from 2024–25
The Government has announced $41.7 million in funding over four years from 2024–25 for a series of initiatives to support small businesses:
Enhancing Payment Times for Small Businesses
Boosting resources for the Payment Times Reporting Regulator to ensure it effectively fulfills its expanded role, which includes publicly identifying businesses that delay payments.
Mental Health and Financial Wellbeing of Small Business Owners
- Extending the NewAccess for Small Business Owners program, offering personalised, free, and confidential mental health support.
- Extending the Small Business Debt Helpline, providing crucial assistance with financial challenges.
Changes to the Franchising Sector Code
Following the 2023 Schaper Review of the Franchising Code of Conduct, the Government is allocating $3 million to:
- Revise and enhance the Code.
- Advocate for best practices between franchisors and franchisees.
- Simplify operations for small businesses in the sector, including improved access to dispute resolution.
Access to Justice
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has received $2.6 million in funding. This support enables ASBFEO to assist and advocate for small businesses, including helping resolve disputes.
The team
The Trekk Advisory team is here for you, ready to help you make the most of the Budget's opportunities or to navigate any risks. Remember, the details matter, so don't hesitate to reach out if you need our support.
Timeline of initiatives
Measures and start date at a glance
| Budget measures | Application date |
| INDIVIDUALS | |
| Tax cuts have been legislated for all 13.6 million Australian taxpayerss | 2024–25 and later income years |
| Increasing the Medicare levy low income threshold | From 1 July 2023 |
| Indexation on HELP debt to be capped to the lower of either the CPI or the WPI. | 1 June 2023 |
| BUSINESS | |
| Instant asset write-off threshold temporarily increased to $20,000. | From 1 July 2024 until 30 June 2025 |
| Two time‑limited tax incentives to invest in new industries: - Critical Minerals Production Tax Incentive to support downstream refining and processing of Australia’s 31 critical minerals to improve supply chain resilience Hydrogen Production Tax Incentive to producers of renewable hydrogen to support the growth of a competitive hydrogen industry. |
2027–28 to the 2040–41 income years |
| Extension and expansion of the Energy Bill Relief Fund | Funding for three years from 1 July 2024 |
| All households will have $300 credit automatically applied to their electricity bills and around one million small businesses will receive $325 off their bills over 2024–25. | From 1 July 2024 |
| Funding to support small business by: - Improving payment times to small businesses - Supporting mental health and financial wellbeing of small business owners -Ensuring confidence in the franchising sector - Providing small business with better access to justice |
Funding for four years from 2024–25 |
| Proposed changes to the Producer Tax Offset to remove: - The minimum length requirements for content - The above-the-line cap of 20% of total qualifying production expenditure. |
2025–26 income year |
| TAX EXEMPT ENTITIES | |
| Extension of transitional reporting for charities and updates to specifically listed DGRs | Various |
| INTERNATIONAL | |
| Strengthen the foreign resident CGT regime by: - Clarifying and broadening the types of assets on which foreign residents are subject to CGT - Amending the point-in-time principal asset test to a 365-day testing period - Requiring foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed. |
CGT events commencing on or after 1 July 2025 |
| SUPERANNUATION | |
| The Government will pay superannuation on Commonwealth government-funded PPL | Births and adoptions on or after 1 July 2025 |
| Funding to support the progression of the Government’s workplace relations agenda, including: - Pursuing unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024 - Supporting workplaces to implement policy changes such as the introduction of payday superannuation. |
Funding for four years from 2024–25 |
| Funding to support the delivery of Government priorities in the Finance and Treasury portfolio including: - Implement the 2023–24 Budget measure Better Targeted Superannuation Concessions for members of the Commonwealth defined benefit superannuation schemes - SuperStream Gateway Network Governance Body |
Funding over four years from 2024-25 |
| COMPLIANCE | |
| Extend the Tax Avoidance Taskforce | Funding over two years from 1 July 2026 |
| Extend the Personal Income Tax Compliance Program | Funding for one year from 1 July 2027 |
| Extend the Shadow Economy Compliance Program | Funding over two years from 1 July 2026 |
| ATO funding to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems | Funding over four years from 1 July 2024 |
| Funding for the ATO for various matters including: - Requirements of existing and new child care providers (relating to the Child Care Subsidy Program) - Improving the Government’s Digital ID, myGovID and other systems - Data-matching pilot between the Department of Home Affairs and the ATO - Overseeing / operating the secure eInvoicing network |
Various |
| OTHER MEASURES | |
| Funding to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to enhance Australia’s ability to detect and disrupt illicit financing. | Funding over four years from 2024–25 |
| Women’s Budget Statement — various measures that focus on four priorities | Various |
| Funding to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology. | Funding over four years from 2024–25 |
| Funding to implement a social security means test treatment for the military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. | Funding over five years from 2023–24 |
| Funding to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety. | Funding over five years 2023–24 |
| New Aged Care Act — deferred commencement date | 1 July 2025 |
| Social security deeming rates will freeze at their current levels | Until 30 June 2025 |
| Increased flexibility for recipients of Carer Payment —the existing 25 hour per week participation limit will be amended to 100 hours over four weeks. | From 20 March 2025 |
| Commonwealth Rent Assistance maximum rates to be increased by 10% | 20 September 2024 |
| Eligibility for the existing higher rate of JobSeeker payments has been extended | 20 September 2024 |
| GENERAL | |
| Amendments to previously announced measures: - Australian plantation forestry entities are exempt from the new earnings-based test, thin capitalisation rules - Giving the Commissioner a discretion not to use a taxpayer’s refund to offset old tax debts - where the old tax debt was put on hold before 1 January 2017 - Extending income tax exemption to World Rugby and/or related entities in relation to income from Rugby World Cup events for the 2023–24 to 2030–31 income years (incl.) |
|
| Deferring the start date for Tax Integrity — expanding the general anti-avoidance rule in the income tax law | Income years starting on or after the day the amending legislation receives Royal Assent |
| Changing the start dates for certain components of the Streamlining excise administration for fuel and alcohol package | The day after Royal Assent |
| Measures not proceeding: - Denying deductions for payments relating to intangibles held in low- or no-tax jurisdictions measure — announced in the 2022–23 October. - Previous Government’s 2019 –20 Budget measure Black Economy – strengthening the Australian Business Number system. |
|
Disclaimer
This document is provided with the understanding that it does not constitute advice, nor does it imply that the authors or distributors are offering legal or professional guidance. Despite the careful preparation of the information, individuals should not base their actions solely on its contents. Should you need assistance, it is advisable to seek professional counsel.
The information provided in the Budget 2024-25 Updates is intended to serve as a resource, to be used alongside professional expertise and judgement. Responsibility for the application of the Budget 2024-25 Update, including any direct or indirect outcomes resulting from decisions made based on this update, falls to the user. Trekk Advisory Services Pty Ltd, its directors, authors, and anyone else involved in creating and distributing this guide, categorically deny any liability for losses or damages of any kind, whether from contract, tort, or otherwise, arising from the use of the Budget 2024-25 Update or reliance on any information contained within this guide.
