The government on Tuesday (30 August) released draft legislation that will introduce two tax incentives that support small businesses to train and upskill employees, and improve their digital and tech capacity.
The legislation will introduce the productivity measures that were included in the March 2022 budget but have not been legislated and are worth more than $1.5 billion.
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.
Small businesses with an annual turnover of less than $50 million will have access to a bonus of 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 of 20 per cent deduction that will support the uptake of digital technologies, until 30 June 2023.
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson said the legislation will mean small businesses will get a $120 tax deduction for $100 spent on digital uptake and upskilling staff.
“Locking in these measures will ensure small and family businesses are digitally enabled, resilient and have the support, incentives, skills and training needed to be truly competitive and to grow,” he said.
“Deeper digital engagement has been the saviour for many small and family businesses throughout the pandemic and assistance to build their digital capacity is an important investment in their future.
“The digital tax break will allow them to invest in items such as cyber security systems, cloud-based services, accounting or eInvoicing software, hardware such as laptops and portable payment devices.
“For a small business, the cost of training staff can be quite significant, and this deduction will support owners to make an investment in upskilling staff to drive productivity and competitiveness.”
Council of Small Business Organisations Australia chief executive Alexi Boyd said it’s almost impossible to run a small business without using technology, whether that be digital data storage, marketing to customers, payment services for customers, managing inventory, payroll software, or just having a website and social media channels.
“We know from research by payroll provider Xero that the more digitised a small business was, the more resilient they were to the shocks of COVID-19. It is essential to incentivise digitisation to make our small businesses stronger, more productive, and more resilient to future economic shock,” she said.
“With increased uptake of technology comes a greater vulnerability to cyber security threats. COSBOA encourages the government to adopt a program to empower small business owners and their staff with the skills they need to protect themselves from cybercrime.”
