3 key takeouts for SMEs
On May 14, Australian Treasurer Jim Chalmers presented Labor's 2024-25 Federal Budget. The Budget aims to balance competing priorities, focusing on cost-of-living pressures, inflation, growth opportunities, and economic investment.
Small and medium-sized businesses, already struggling with recent challenges, now face rising inflation, talent shortages, and increasing overheads, making operations and growth difficult. Business leaders are keen to understand the future impact. Here's a look at the 2024-25 Federal Budget and its implications for SMEs.
Paid Superannuation on PPL
Starting July 1, 2025, the government will pay superannuation on paid parental leave for parents of babies born or adopted from that date. This initiative, worth $1.1 billion, will add 12% of PPL payments to parents' superannuation funds, taxed at 15%. Payments will begin on July 1, 2026, and count towards concessional contributions caps.
The aim of this proposal is to help normalise parental leave as a workplace entitlement like annual leave and sick leave. It is a positive step towards closing the superannuation gender gap as it is designed to reduce the impact of parental leave on retirement savings.
This measure builds on the current PPL scheme which provides families up to 20 weeks of payment for a child, with 2 weeks reserved for each parent in a couple. From 1 July 2024, PPL will be paid for a maximum period of 22 weeks and the rate is based on the national minimum wage (currently $882.75 per 5 day week). Further, the maximum period will be increased to 24 weeks and 26 weeks from 1 July 2025 and 1 July 2026 respectively.
Energy bill relief for small businesses Under the 2024-25 Budget, up to one million Australian small businesses will be eligible for power bill rebates. From 1 July 2024, a one-off reduction of $325 on power bills will be available for eligible businesses.
Improved payment times to small businesses In the 2024-25 Budget, the Government allocated an additional $25.3 million to improve payment times to small businesses, so they get paid faster. This will ensure the Payment Times Reporting Regulator can deliver its functions, which includes naming slow paying businesses, and funding fit-for-purpose ICT infrastructure.
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