Write-offs, grants, AI awareness: Business sector’s 2024 federal budget wishlist

The federal government should boost the instant asset write-off for small businesses, extend green upgrade grants, and funnel more capital into high-potential startups, according to the pre-budget wishlists of major business lobby groups.

Industry organisations are now publishing their submissions to Canberra ahead of the 2024-2025 federal budget, giving an early glimpse at what some of the nation’s largest business representative groups want to see from May’s spending plan.

In a familiar refrain, the Australian Chamber of Commerce and Industry (ACCI) is urging the federal government to expand the small business 25% corporate tax rate to cover enterprises with a turnover of $250 million, up from its current $50 million cut-off.

Its calls for tax cuts extend to personal income tax, too: ACCI has urged the federal government to pass Stage 3 tax cuts as they were legislated, as opposed to the Albanese government’s new and updated version, which offers tax breaks to more medium- and low-income earners.

The instant asset write-off threshold, which the federal government intends to cover assets valued up to $25,000, should lift to $30,000, the organisation continues.

For larger investments, businesses should be able to instantly write off the first $30,000 of expenditure and tack the remainder onto existing depreciation schedules, the submission continues.

Any shifts to the scheme would alter the plan introduced in the last federal budget, which the Albanese government says was designed not to contribute to inflation.

Additionally, ACCI is calling on the federal government to make the Energy Efficiency Grants for Small and Medium Enterprises scheme a permanent fixture, while extending its partner program, the Small Business Energy Incentive, to at least 30 June 2025.

The latter program, which provides a bonus deduction on eligible energy-efficient technology, is scheduled to expire on 30 June 2024 — a date too early for many small businesses to take part, given persistent installation lag times, ACCI argues.

Small businesses should also be supported while adjusting to the Privacy Act shake-up, which is slated to expose small businesses to tough data privacy rules for the first time, the submission notes.

The federal government has already signalled it will consider “tailored guidance, e-learning modules and other tools” for small businesses encountering the new-look Privacy Act.

Similarly, the government should support businesses through any changes to franchising laws, and ought to create impact statements for incoming policies that affect small businesses — a position shared by the Council of Small Business Organisations Australia (COSBOA), which focused solely on the SME landscape.

A focus on ensuring small businesses are aware of the obligations placed upon them was shared by the Housing Industry Association, which represents a business sector facing extraordinary challenges and an uptick in insolvencies.

The federal government should fund a program to assist small businesses with cash flow management, compliance, and risk mitigation, it said in its 2024-2025 submission.

Small business compliance support is already available through the Fair Work Ombudsman and programs like the federally-funded Small Business Debt Helpline, which can assist enterprises before they reach crisis point.

In its submission, published last week, the Australian Industry Group celebrated the success of the Australian Business Growth Fund and suggested extra resources go towards initiatives backing high-potential scaleups.

Additionally, it drew attention to the rapidly developing world of AI, suggesting “there is an urgent need to develop programs and resources – particularly for SMEs – to ensure Australia does not fall behind the world in AI adoption in industry”.

The federal government has committed $17 million to five AI adoption centres across Australia, promising to provide guidance on how AI can boost small business productivity.

In a headline-grabbing move, the Ai Group also called for the reworked Stage 3 tax cuts to be considered at the next minimum wage review, arguing the new tax break for lower-income earners could mitigate some of the need for a wage bump.

Such a plan appears to be at odds with the Labor government’s long-held goals of boosting wage growth.

Further submissions will be made public in the lead-up to the May budget.