Prospa is now open on Saturdays. Call our team between 10am & 4pm to discuss your loan.

Home » Blog » What This Year’s Federal Budget Means For Small Business

What this year’s Federal Budget means for small business

Christmas didn’t quite come early with this year’s federal budget, but there were a few gifts for small businesses left under the tree.

Asset write-off

The small business $20,000 instant asset write-off has been extended to June 30 2019, meaning you can claim the full tax deduction on business equipment up front (to the threshold).

Key takeaway: if you need big ticket items, this is a great deduction, but you still have to pay for it yourself, so only buy equipment you actually need.

Wage subsidies

Employers who take on certain older workers will benefit from up to $10,000 in wage subsidies for new employees aged over 50. The government is also implementing skills and training grants of $2,000 to up-skill mature-aged workers in existing employment.

Key takeaway: there are many cultural benefits to age diversity in the workplace, so why not investigate the economic benefits too.


No great news on the tax front, but the government confirmed it is sticking to its 10-year plan to reduce the business tax rate from 30 to 25 per cent, although the legislation is still currently stalled in the Senate.

Key takeaway: look to maximise deductions and incentives and keep an eye on promises ahead of the 2019 federal election.


Research and development tax incentives are being scaled back to the tune of $2 billion to target companies already investing heavily in R&D.

The government will be investing a fresh $1.3 billion in the Medical Industry Growth Plan to support the medical technology, biotechnology and pharmaceutical sectors, and $2.4 billion over 12 years to in science and technology.

Key takeaway: grants of this nature can be complex terrain, so if you are working in the field, speak to a tax professional about your options.

Black economy

Perhaps the headline item of this year’s budget is the crackdown on the black economy, particularly for cash-in-hand work.

Cash payments above $10,000 made to businesses for goods and services will be outlawed from July 1, 2019, and businesses will be required to report to the ATO payments to security providers, road freight transporters, computer system design and services, and cleaning and courier contractors (in addition to the existing requirement to report payments to building contractors.)

There will be a new hotline to report cash-in-hand payments as well as ‘phoenixing’ activity (where a business owing money closes and reopens under a new name).

Key takeaway: the ATO will no doubt be looking at this closely, so an audit of your payment reporting requirements may be in order.

Open banking

The government has committed to spend $44.6 million over the next four years to establish a Consumer Data Right (CDR) to help facilitate an open banking regime, which will give consumers better access to their financial records and the ability to transfer information between financial institutions more easily.

Key takeaway: with open banking likely to be implemented in the near future, having control over your data will ultimately make it easier for your business to access new and better financial products and services.

Digital revenues

Treasury is continuing to investigate the possibility of taxing digital revenues, especially those of foreign multinationals, with a discussion paper due to be released in a few weeks.

Key takeaway: governments around the world are beginning to look closely at the issue, so online businesses should start preparing for changes and closed loopholes in the coming years.

Looking to get your finances in order? Talk to Prospa on 1300 882 867 or apply online for a small business loan today.

The information in this post is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

Keep reading

Restarting your back to business momentum

14 July 2020 | 4 min read

The COVID-19 shutdown took the wind out of the sails of many businesses. As Australia reopens, how can you ensure cash flow issues don’t keep you in the doldrums?

View more

Business finance: Last century lending vs today

11 February 2020 | 1 min read

More and more small businesses are ditching the old way of borrowing. Here’s why and what’s changed about business finance this century.

View more

How to improve your credit score

22 January 2020 | 4 min read

A poor credit score can be a handbrake on your business, limiting your access to finance or making it more expensive. Here’s some tips on how to improve your credit score.

View more

Subscribe to the Prospa Blog

Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.