The 2024-25 Australian Budget includes several measures to support small businesses. While these initiatives sound promising, a closer look at the funding and economic impact raises questions about their effectiveness.

Instant Asset Write-Off Extension

The budget extends the $20,000 instant asset write-off for another year. Noting that as at today’s date last years extension of the instant asset write off has not been passed, meaning the $1,000 cap stands.

This measure is estimated to cost $290 million over the forward estimates period. With around 2.3 million small businesses in Australia, this translates to approximately $126 per business annually. While this tax relief encourages investment in business assets, the effectiveness is limited. Many small businesses may not have the capital to make such purchases amid high inflation and rising interest rates.

Energy Bill Relief

The budget allocates $3.5 billion to expand the Energy Bill Relief Fund, providing a $325 rebate to one million small businesses.

This relief addresses immediate energy cost pressures but is a short-term solution.

With rising energy prices, sustainable strategies like investment in renewable energy are needed for long-term cost management.

Payment Times Reporting Scheme

The government has allocated $25.3 million over four years to improve payment times for small businesses.

This funding translates to about $6.33 million per year, or roughly $2.75 per business annually.

Ensuring timely payments is crucial, but this amount is insufficient for meaningful impact.

Effective enforcement and compliance from large businesses are necessary for the scheme’s success.

Financial and Mental Health Support

The budget includes $10.8 million over two years for the NewAccess for Small Business Owners program and the Small Business Debt Helpline.

This funding equates to $5.4 million per year, or about $2.35 per business annually.

While these programs are essential, the funding may be insufficient to address the significant mental health and financial stress in the sector.

Franchising Code of Conduct

The budget allocates $3 million over two years to enhance the Franchising Code of Conduct.

This funding translates to $1.5 million per year, or roughly $37.50 per franchise unit annually.

Comprehensive updates and effective enforcement are crucial, but the allocated budget may not cover all necessary activities.

Workplace Relations Support

The government has allocated $20.5 million to the Fair Work Ombudsman to enhance the Employer Advisory Service. This funding aims to help small businesses navigate complex workplace regulations.

With approximately 2.3 million small businesses, this translates to about $8.91 per business annually.

More streamlined processes and additional funding may be needed to support small businesses effectively.

Digital and Technological Adoption

The budget includes $101.2 million over five years to help small businesses integrate AI and quantum technologies.

This funding translates to $20.24 million per year, or about $6.91 per business annually.

This amount is negligible for significant technological adoption, which requires substantial investment in training and infrastructure.

The 2024-25 Australian Budget introduces several initiatives to support small businesses, but the analysis of forward estimates reveals significant challenges.

The allocated funding per business is minimal compared to the actual needs.

While the initiatives provide short-term relief, more comprehensive and sustained strategies are essential for long-term growth and resilience.

Continuous investment and adaptive strategies are necessary to ensure these measures achieve their intended outcomes.