As a small farm or business owner, it's natural to be concerned about the potential effects of government budget measures on your operations. The decisions made at a national level can have a significant impact on your financial well-being and overall business outlook. In this article, we'll explore some key changes outlined in the latest budget and discuss how they may affect small farms and businesses in the coming years. Remember, it's always advisable to consult with your accountant or financial advisor to fully understand and adapt to these changes.You can also give GBAC a call to discuss your farm or business strategy.

$20,000 Instant Asset Write-Off Threshold:

One positive change for businesses with an annual turnover under $10 million is the extension of the instant asset write-off. In the 2023-24 financial year, eligible businesses can enjoy a $20,000 instant asset write-off threshold for eligible assets installed and used. This measure provides an opportunity for small farms and businesses to invest in new equipment and infrastructure, fostering growth and productivity.

Small Business Energy Incentive:

To encourage energy efficiency, the government has introduced the Small Business Energy Incentive. Businesses with a turnover of less than $50 million can benefit from an additional 20% tax deduction of up to $100,000 (up to $20,000 per business) for eligible energy-saving upgrades. By embracing sustainable practices, small farms and businesses can not only reduce their environmental footprint but also enjoy long-term cost savings.

Building Resilience to Cyber Threats:

With the increasing reliance on digital technologies, cyber threats pose a significant risk to businesses of all sizes. To address this concern, the government has allocated $23.4 million in the budget to help small businesses build resilience to cyber threats. By investing in cybersecurity measures and staying informed about the latest threats, small farms and businesses can safeguard their valuable data and maintain operational continuity.

Energy Bill Relief

To alleviate the burden of rising energy costs, eligible small businesses will receive $650 power rebates. In addition, Victorian businesses will save $325. These initiatives aim to provide financial relief and encourage businesses to explore energy-efficient alternatives. By leveraging these incentives, small farms and businesses can lower their operational expenses and enhance their bottom line.

Superannuation Changes:

The budget confirmed the Government’s intention to increase to the tax rate on earnings for superannuation balances over $3 million from July 2025. If your farm or business is affected, it's important to evaluate the potential impact of this change on your retirement savings strategy. Consulting with a financial advisor can help you navigate these modifications and make informed decisions regarding your superannuation funds.

Heavy Vehicle Road User Charge:

For businesses involved in freight or transportation, it's crucial to note the planned increase in the heavy vehicle road user charge. By 2025-26, the charge is set to rise from 27.2 cents per litre to 32.4 cents per litre. This adjustment may impact the cost of sales and logistics for small farms and businesses, necessitating careful financial planning and potential adjustments to pricing strategies.

Biosecurity Protection Levy:

A "biosecurity protection levy" effective July 2024 has been introduced for Australian producers of agricultural, forestry, and fishery products. The purpose of this levy is to enhance biosecurity measures and protect against potential threats. Small farms and businesses operating in these industries should account for this levy in their budgeting and forecasting processes. Understanding the potential impact of government budget measures is crucial for small farm and business owners. By staying informed about the changes outlined in the latest budget, you can adapt your budget, forecasts, and cash flow accordingly. Consultation with your accountant, financial advisor or GBAC’s qualified team is highly recommended to navigate these changes effectively and ensure the continued success and resilience of your small farm or business in the face of evolving economic circumstances. Contact GBAC to get started with your farm succession planning. Article by Greg Bloomfield Ret, FCA, CPA, ACIS, FICD. Retired sheep and cattle breeder. Succession planner.