Every year the Federal Budget is a must-watch event for businesses of all sizes and from all industries with the federal government announcing how it will allocate money for the financial year ahead. Both individuals and businesses watch on in hope they might “win” some of the prized budget for the year through one of the initiatives outlined by the government.

For retailers this year, the budget offered a little less than it has compared to previous years as the cost of living crisis and economic pressures on other industries took centre stage.

While they are limited, there were some initiatives announced that will provide welcome financial relief and boost cash flow for thousands of retail businesses across the country. Below, I outline six items from the budget that each retail business should know about*.

1. $20,000 instant asset write-off

From 1 July this year, the instant asset write-off threshold will sit at $20,000. Businesses with an annual turnover of $10 million or less will be able to instantly deduct the entire cost of assets that cost less than $20,000. The asset must be installed or ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold applies to each individual asset, so businesses can buy and write off multiple assets as long as each one costs less than $20,000.

So, how does this impact your business? Well, this is actually a surprise win for retail businesses, as the previous budget slated this initiative to end in June this year.

While the $20,000 instant asset write-off cap is significantly less than in recent years, retail businesses can still take advantage of the scheme and write off multiple new assets over the next financial year. Assets such as furniture, computer equipment, and tech items can all be written off – as long as each item costs less than $20,000.

It’s predicted this scheme won’t be renewed for the next financial year, so if you’re looking to make any big asset purchases, this is the time to do it.

2. Small business energy incentive

Businesses with an annual turnover of $50 million or less will be eligible for a bonus tax discount when they purchase energy-efficient equipment that supports electrification and more efficient use of energy.

Small retail businesses will be able to deduct 20% off the total cost of eligible assets. The maximum that can be claimed through the incentive will be $20,000, meaning businesses can spend up to $100,000 on energy-efficient equipment.

The measure is expected to help up to 3.8 million SMBs, at a cost of $314 million to the government over the next four years.

This is a great incentive for small businesses that are looking to upgrade their electrical equipment. Retail businesses looking to capitalise on the incentive can install new electrified heating and cooling systems. And those retail businesses that sell chilled and frozen goods can purchase new energy-efficient fridges and freezers under the scheme.

3. Energy bill relief

The federal government, in partnership with state governments, will provide up to $3 billion in energy bill relief to eligible households and small businesses. While households will receive up to $500 in rebates, businesses can expect to receive up to $650.

The energy bill relief scheme goes some way in easing the pressure of rising energy bills for small retail businesses, with up to one million SMBs set to benefit from the energy bill rebate in the next two years.

4. Business tax compliance

The government has worked with the Australian Tax Office (ATO) on several tax compliance initiatives that aim to make life easier for businesses and improve their cash flow.

The GST and PAYG uplift has been reduced from 12% to 6% to assist with business cash flow.

The ATO will forfeit outstanding failure-to-lodge penalties for late tax payments going back to late 2019 in a bid to encourage businesses to get up to date on their tax returns.

From mid-next year, accountants and tax agents will be able to file multiple Single Touch Payroll forms on their client’s behalf, rather than employers having to complete the process each month. From mid-2025, small businesses will also be granted up to four years to amend their income tax returns

The GST and PAYG uplift reduction is set to have a moderate impact on business cash flow, and the government predicts it will positively impact 2.1 million small businesses.

While some of the other tax compliance changes aren’t set to come into force for at least another 12 months, they’re slated to make life easier for small business owners, reducing the amount of time they need to spend on tax and administrative duties each year.

5. Digital resiliency and cybersecurity program

The Cyber Wardens Program focuses on digital resiliency and cybersecurity, with a $23.4 million investment to equip small businesses with the skills to improve their cyber safety and protect customer data.

Cybersecurity is a real threat to businesses, with big corporations like Optus and Medibank falling victim to data leaks in the past 12 months.

For retailers, a cybercrime attack can cause significant financial and reputational damage. With an increasing number of retailers going digital – from online shopping to digital loyalty programs – cybersecurity should be a top priority for businesses that store customer data such as email addresses and phone numbers.

The Cyber Wardens Program, launched by the Council of Small Business Organisations Australia (COSBOA), will help SMBs build their resilience to cyber threats by training in-house cyber experts and will become Australia’s first cyber safety workplace certification.

6. Change to student visa work hours

From 1 July 2023, work restrictions for student visa holders will be reintroduced. The cap on the number of hours international students could work at 40 hours per fortnight was lifted during the pandemic to ease the staff shortage crisis.

While the cap is being reintroduced, the limit will rise from 40 hours per fortnight to 48 hours per fortnight – effectively allowing student visa holders to work an extra shift per two weeks.

If you employ student visa holders, it’s important to ensure that your business complies with the visa conditions of your employees. This means from 1 July 2023, you can’t roster student visa holders for more than 48 hours per fortnight.

There is no limit to the combination of hours student visa holders can work each week as long as it’s under the 48 hour cap per fortnight. For example, a student visa employee could work 16 hours one week and 32 the next.

No matter what work visa your employees hold you must continue to follow Australian workplace law.

While the benefits to retailers might have not been as plentiful in the past, there are definitely still some nuggets for businesses to capitalise on this coming financial year. Make sure you don’t miss out on the incentives your business could be benefiting from.

*This is for informational purposes only and does not constitute legal, financial or tax advice. You should consult with and rely on your own legal, financial or tax advisors.

Andrew Fraser is managing director for APAC at Lightspeed.