29th March, 2022

Federal Budget 2022: Government’s endorsement of digital a big win for Australia’s economy

Tonight’s Budget includes a big incentive for businesses to support innovation through digitisation, as well as a number of other measures to help accelerate the economic recovery.

In 2020, MYOB began submitting to the Government that a digital tax incentive would deliver a $10.5 billion return to the economy.

Last Budget, the Government announced a suite of measures as part of its Digital Economy Strategy, aimed at accelerating Australia towards becoming a leading data and digital economy.

Those measures included driving awareness and adoption of e-invoicing, investment in digital skills, as well as intangible asset incentives, which introduces a means of depreciating intellectual property and in-house software.

The Government has also been working to evolve its own digital services like the ABRS and MyGov, in order to better meet the needs of a more digitised economy.

The Government also announced that businesses with a turnover of under $50 million would be able to claim an extra 20 percent back in tax from every digital investment they make, up to $100,000 in the fiscal year.

The measure takes effect tonight, and is available until 30 June 2023.

MYOB’s Chief Employee Experience Officer Helen Lea has commended the Government for this measure on behalf of business operators and the $10.5 billion return the economy will realise as a result.

“We are delighted with today’s announcement from the Federal Government that they will support Australia’s small businesses in reaching their online potential.

“This incentive, which will see SMEs garner a $120 tax deduction for $100 spend, will provide rocket fuel to Australia’s 2.4 million small businesses through essential digital investment to ensure their future in the Australian economy,” said Lea.

One in nine Australians are looking for more support for the nation’s small-and-medium businesses (SMEs), with many hoping to see this delivered in the form of tax cuts or direct stimulus handouts.

For these reasons, it’s heartening to see Treasurer Frydenberg plans to implement $1.85 billion worth of cashflow relief, reducing the GDP uplift rate to two percent for SMEs and sole traders, reducing their quarterly installment burden.

More jobs and more workers

Tonight’s Budget announcements also included good news in the form of job creation as well as attracting more workers to our shores.

Border closures during the last two years have effectively cut Australia off from international sources of labour, leaving many businesses of all kinds struggling to find enough staff and driving unemployment down to 4.4 percent. And it’s tipped to go lower – to 3.75 percent if the Treasury’s predictions prove correct.

That’s why the Government’s investment into tourism – especially where it encourages long-term stays – is of critical importance to business owners.

The announcement of an additional $365.3 million in creating an extra 35,000 apprenticeships and trainees in an extension of the Boosting Apprenticeship Commencement wage subsidy is also critical, making it more affordable for business owners to get the help they need.

This investment brings the Morrison’s Government’s spending in the skills sector up to a total of $7.8 billion in this financial year.

Further, the Budget includes an allocation of a 20 percent deduction in external training for small businesses in skills including digital, with a particular emphasis on regional Australians.

MYOB has equally highlighted the opportunity afforded by upskilling businesses in digital fluency, and Lea also expressed delight in seeing the investment in this space.

“Businesses with an advanced level of digitisation are 50 percent more likely to increase revenue, eight times more likely to create jobs and seven times more likely to scale.

“That’s why we’re so passionate about tonight’s investment in the digitisation agenda.”

Join She’s on the Money’s Victoria Devine in unpacking key announcements from this year’s Federal Budget with the help of ASBFEO’s Bruce Billson, MYOB’s Helen Lea and Madebox’s Samantha Finnegan in a webinar scheduled to occur at 3pm AEDT, Thursday 31 March. Hosted by MYOB, you can register to attend the webinar here.