Making Cents of the Budget 2013-14

The federal government released the budget for the 2013-14 financial year on 14 May 2013. As the budget has placed emphasis on supporting growth and jobs, there are also some potential benefits for small businesses.

The following is a brief summary of the federal budget items that may affect your business:

Taxation matters

From 1 January 2017, entities with turnover exceeding $20 million will be rolled into the proposed monthly Pay As You Go (PAYG) instalment system.

The government will defer the application of the Clean Energy Future personal income tax cuts scheduled to commence on 1 July 2015 due to revisions in carbon price projections from 2015-16 onwards.

There will be no change to the tax cuts applied from the 2012-13 income year.

For recipients of Disaster Income Recovery Subsidy (DIRS) payments between 3 January 2013 and 30 September 2013, the government has exempted these payments from income tax.

The DIRS provides financial assistance to small business persons who experience a loss of income as a direct consequence of a natural disaster occurring in Australia.

Companies eligible to receive a 45% refundable tax offset (with annual aggregate turnover of less than $20 million) will no longer have to wait until their end of year assessment to realise the value of the offset.

This measure will allow for the advanced payment of the 45% refundable tax offset on a quarterly basis to improve cash flow and enhance incentives for small innovative companies to invest in R&D activities.

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Skills and workforce development

The government will provide $68.8 million over four years to establish an Alternative Pathways Program to support the development and trial of flexible training pathways for Australian apprentices in high demand industries experiencing skills shortages.

The government will provide $45.0 million in 2013-14 to establish the Skills Connect Fund (SCF) to streamline access to the five workforce development programs available under Australian Government Skills Connect.

The government is extending the Pensioner Education Supplement to all Newstart Allowance single principal carer recipients.

Payment of up to $1,622.40 in 2013 (subject to bi-annual indexation), will help recipients with the cost of study while they gain an initial qualification to assist them to re-enter the labour market.

The government will provide $5.6 million over five years to establish a Services Leaders Group (SLG) to consult with the services sector and advise the government on service sector issues.

The government will provide an additional $3.5 million over two years to extend the Connecting People with Jobs (CPwJ) program for one year.

Eligible job seekers will now be able to apply for assistance until 30 June 2014.

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The government will also provide funding of $900.1 million over three years from 2014-15 for new projects in Western Australia:

  • Building Program
  • Swan Valley Bypass
  • Great Northern Highway - Muchea to Wubin
  • North West Coastal Highway - Minilya to Barradale
  • Leach Highway (High Street)
  • Perth Public Transport Package
  • Tonkin Highway grade separations
  • Gateway WA

These projects may provide opportunities for small business participation directly and as subcontractors.

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Capacity building

The government will provide an additional $7.2 million over three years to improve the capacity of small businesses to engage in the digital economy and take advantage of the National Broadband Network (NBN).

The government will provide $98.2 million over five years (including $2.1 million in capital in 2013-14) to continue funding for a number of industry assistance programs ($81.0 million) and to establish a new Australian Industry Participation (AIP) agency to administer these programs ($17.2 million).

The government will provide $238.4 million over five years to establish five Industry Innovation Precincts that build on Australia's strengths in innovation and five new Industry Innovation Precincts that focus on emerging opportunities.

The government will provide $378.6 million (including $350.0 million in administered capital) over 15 years for the Venture Australia program to stimulate innovation and entrepreneurial activity to support the development of new competitive firms in Australia.

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Climate change

The government has signed up to a second commitment period under the Kyoto Protocol, with effect from 1 January 2013.

Joining the second commitment period has allowed the government to ensure that Australian businesses have access to international credits under the Clean Development Mechanism.

The Clean Technology Program will still provide $1.2 billion over seven years from 2011-12 to assist manufacturing industries transition to a low carbon economy by supporting the adoption and deployment of technologies to improve energy and carbon efficiency at manufacturing facilities.

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Red tape reforms

The government will provide $7.8 million over two years to the Australian Securities and Investments Commission (ASIC) to improve ASIC's client contact centre service levels to support the introduction of the online National Business Names (ABN) registration system.

The government will provide $80.2 million over the forward estimates period to strengthen up-front checks for issuing ABNs and encourage the use of AUSkey (a secure credential for accessing online services of the Australian Business Register).

This measure will also enhance Standard Business Reporting to continue to reduce compliance costs for business.

The government will provide $1.4 million over four years to provide for a single, online registration for financial advisors registered with ASIC that also need to be registered with the Australian Taxation Office as tax advisors from 30 June 2013.

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Migration program changes

From 1 July 2013, the government will increase the visa application charge (VAC) for the Temporary Work (Skilled) Standard Business Sponsorship (Subclass 457) Visa program to $900.

The government will maintain the 2013-14 Migration Program at 190,000 places, with a revised composition of 128,550 skilled stream places (down from 129,250 last year).

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