The federal government intends to push forward with legislation enacting $1.55 billion in small business tax breaks this financial year, Small Business Minister Julie Collins says, as the June 30 cut-off date for a technology upgrade program draws close.
The Technology Investment Boost, introduced by the Morrison government in March 2022, promises businesses with an aggregated annual turnover below $50 million a ‘bonus’ 20% deduction on eligible tech hardware and digital upgrades.
Up to $100,000 in expenditure is covered, providing a maximum annual tax break of $20,000, so long as the investment was made between March 29, 2022 and June 30, 2023.
The tax break is subject to legislation, which the Morrison government did not introduce before losing the 2022 election.
The Albanese government affirmed its support for the program, and its sister scheme, the $550 million Skills and Training Boost, by introducing legislation underpinning those tax breaks late last year.
Even with bipartisan backing and the broad approval of a Senate committee, legislation enacting the Technology Investment Boost and Skills and Training Boost currently sits before the Senate as part of a broader Treasury amendments bill.
Should that bill not pass before June 30 this year, small businesses which upgraded their technology in 2022-2023 on the expectation of a generous tax break will go into the new financial year without legislation underpinning their ‘bonus’ deductions.
Speaking to SmartCompany this week, Small Business Minister Julie Collins said the legislation very much remains on the Albanese government’s agenda in the few Parliamentary sitting days before June 30.
“The legislation is obviously on the agenda to get it through the Senate,” she said.
“From talking to my colleague, Assistant Treasurer [Stephen Jones] who’s responsible for the legislation, we understand that they are hoping to get it through before the end of the financial year.”
SmartCompany has contacted Jones’ office for comment.
One potential wildcard is an amendment put forward by independent Senator David Pocock on Wednesday, which calls for the Technology Investment Boost to be extended to June 2024 in a limited form.
His amendment proposes the scheme carry on for small businesses with an annual turnover of $10 million, down from $50 million.
If enacted, the move could benefit small businesses which planned technological upgrades this financial year, but were kept from installing or using that hardware due to supply chain disruptions.
That move has been supported by the Australian Chamber of Commerce and Industry, which claims 2.4 million businesses would benefit from the extension.
“This promised tax incentive is essential to assist small businesses in their digital transformation, with many falling behind in the digitisation amid a slew of other pressures,” ACCI chief executive Andrew McKellar said in a statement.
“Small businesses are counting on what’s already been promised, the Senator’s amendment will extend this for an additional 12 months,” McKellar added.
“It’s time for the Senate to make sure this happens.”
Groups including the Tech Council of Australia and MYOB have previously called for the package to expand in scope.
However, such a measure would be a tall order, given the current economic environment and the careful balancing act between business support and anti-inflationary measures.
Coalition Senators “believe that consideration must be given to reducing inflationary pressures on the budget,” a Senate Committee report on the legislation said.
SmartCompany has approached Pocock’s office for comment.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
