The government has splashed out on one-off cost of living assistance measures that Treasurer Josh, Frydenberg described as “temporary, targeted and responsible”. As well as halving the 44.2¢ per litre fuel excise for six months, the budget has increased the Low-and-Middle-Income Tax Offset (LMITO) by $420 for people earning up to $126,000 a year. This means that at the end of this financial year, single taxpayers will be eligible for bonuses of $1500 and couples $3000. However, the LMITO will not be extended beyond June 30, 2023. Also Coming to an End If you’re considering investing in tangible assets, now is the time to do it, with the Government announcing that the temporary expensing measure for business, which allows companies with turnovers capped at $5 billion to deduct upfront the cost of tangible assets, will also conclude on June 30, 2023. Other business tax breaks, such as loss carryback provisions, which were designed to help business during the pandemic, have also been ended. Migration, Labour, Wages and Inflation While the government holds steady on its migration cap of 160,000, it anticipates that net overseas migration, which includes Australians coming and going, will rebound from the negative 89,900 people during the pandemic peak in 2020-21, to 235,000 people in 2025-26. This may help fill talent shortfalls, however it’s going to take a while. As we know, the Australian economy has proved remarkably resilient to the ongoing impacts of the pandemic. Labour market outcomes have consistently outperformed expectations, with the unemployment rate declining faster than expected – something many businesses around Australia are feeling the effect. Contractors may increasingly be the solution to talent shortages in your business with the government anticipating the unemployment rate will fall further to 3.75% over the forecast period. You’ll also need to prepare to pay more with wage stagnation expected to ease – the strong labour market will drive wage growth to 3.25% this year, accounting for a 0.25% real wage increase. It will be 1 percentage point higher than inflation the year after. Speaking of which, inflation is forecast to fall from 4.25% this year to 3% next year and 2.27% for the two years after that. Apprenticeship and Tradies Support The budget has allocated $2.8 billion to apprentices, taking the total dedicated to apprentices and tradies to more than $8 billion since the beginning of the pandemic. The support program will change with employers of apprentices receiving a 10% wage subsidy in place of the previous 50% in the first year. Instead, apprentices who study a prioritised trade will receive $5000 over two years. Women The budget has committed $107 million over five years to promote women in leadership, including $37 million to support women in trades. Small business If yours is a small business, it’s a good time to invest in going digital with $1 billion set aside over four years over so you can claim 120% of the cost of laptops, cloud computing, websites and other services. There’s also another $550 million to cover 120% of the cost of any external staff training course, making upskilling an appealing prospect. Working with Government Growing a business should become a little easier as the government rolls out its Deregulation Agenda. When fully implemented, the deregulation benefits of this agenda are expected to be more than $21.0 billion over ten years. Streamlining business interactions with the government remains a key priority, with reduced compliance costs, streamlined reporting requirements and improved cash flow for small and medium businesses flagged. According to the budget, the Australian Taxation Office will be working closely with accounting software developers to: Automate reporting requirements, Reduce costs and improve processing times, Align instalment payment obligations with real-time intelligence on financial performance, and Improve cash flows. Looking for Help? The budget and forthcoming election will undoubtedly deliver changes that need to be incorporated by your business. At the Ayers Group, our experts are up-to-date with the changes and our back office solutions can take much of the pressure off your team, saving time and ensuring business compliance with Government legislation. Call us today to find out more.