The measures, worth $1.5 billion but which failed to progress before the election was called, can be accessed by a small business with a turnover less than $50 million and will be backdated to 29 March, when they were originally intended to begin.
The move to revive the 120 per cent tax deductions for skills and digital spending comes after months of doubt about the plight of the schemes, which were warmly welcomed by small businesses and the tax profession at the time. The draft legislation is open for consultation until September 19.
“The Albanese Labor Government is making these tax incentives law because we recognise that better-trained workers and more productive small businesses are a win-win for the economy,” Mr Chalmers said.
“Small businesses with an annual turnover of less than $50 million will have access to a bonus 20 per cent deduction for eligible expenditure on external training of employees by providers registered in Australia until 30 June 2024.
“Small businesses will also have access to a bonus 20 per cent deduction that will support the uptake of digital technologies until 30 June 2023.
“The Technology Investment Boost and the Skills and Training Boost will be backdated to 29 March 2022 so small businesses can receive the full benefits."
Treasury said there were around 3.7 million small businesses in Australia employing nearly 8 million workers.
“The government recognises that training employees is expensive and takes time, both of which are at a premium when employers are trying to run a small business,” said Mr Chalmers.
“These measures will make it easier for small businesses and help them recoup some of the costs of the investments they make in their employees and digital operations.”
Business management platform MYOB said the move was "momentous" because its research showed 500,000 SMEs had little to no engagement with digital tools but helping them would return $25 for every $1 spent.
The CEO for MYOB, Greg Ellis, said businesses on board with digital systems were eight times more likely to create jobs.
“SMEs will be the ones to blaze the trail to the future recovery and growth of Australia,” he said.
“In a post-pandemic world, do or don’t with digital is no longer a choice. It’s a case of do or die for any business to succeed in our new economic terrain.
“Productivity is what Australia needs – making sure every business is a digital business needs to be one of our top priorities.”
Also yesterday, Small Business Minister Julie Collins pledged $18.6 million to help small businesses adopt digital technology from April 2023.
The program provides funding for technology advice for three years and Ms Collins said it would assist businesses as Australians increasingly shopped online.
“This program helps businesses to recognise and grasp the opportunities that going online can offer, so they can survive and grow,” Ms Collins said.
“This program puts expert digital advice within the reach of every small business in Australia. Advice that is affordable, trusted and independent to get businesses on the right track with selling online, social media and digital marketing, using online tools and software, and managing their online security risks.”
CPA Australia senior manager business and investment policy, Gavan Ord, welcomed the move but urged state governments to follow the lead of Victoria and Tasmania by subsidising businesses that access advice.
“The accounting profession plays a critical role in advising small businesses on their digital transformation,” he said. “We have asked all state and territory governments to provide small businesses with financial assistance to seek advice from accountants.”
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