Opinion

Making the most of the digital tech tax break for business: Budget 2022

- March 30, 2022 3 MIN READ

The Federal Government’s announcement of support for small and medium sized businesses adopting digital technologies and cloud computing, is a welcome incentive, writes Helen Lea, MYOB Chief Employee Experience Officer.

It provides an opportunity for small businesses to embrace the power of digital transformation and cloud computing, to improve their critical business processes, reduce cyber risk and benefit from improved productivity.

Cloud computing for business means seamless access to business-critical tools from any location or device. Australia’s cloud computing market is expected to grow by 12.5 per cent to reach $US14.1bn in 2025[1], accelerated by demand for teams working in hybrid environments to have access to applications and systems remotely and securely.

The Technology Investment Boost, announced last night, will provide businesses with a $120 tax deduction for every $100 spent on digital transformation – for up to $100,000 in a year. Ideal for investing in cloud computing, e-invoicing, cyber security, portable payment devices and online software to improve business processes.


The incentive will be welcomed by the 25 per cent of small businesses who said a tax deduction would help them implement digital tools in their business. It will also assist the 20 per cent who feel cost is a barrier to adoption.[2]

MYOB research has highlighted that one in five Australian small businesses are currently under-digitised and at severe risk of being left behind. Businesses with an advanced level of digitisation are 50 per cent more likely to increase their revenue and seven times more likely to scale[3]. It’s clear that businesses who are looking to survive and thrive in the long term, need to embrace digital.

It’s also a vote for the economy. MYOB analysis reveals that improving access for the one in five businesses with little to no digital presence, will lead to a 1.8 per cent increase in SME GDP, the equivalent of a $10.5 billion gain for the Australian economy.[4]

In partnership with the Technology Investment Boost, the Skills and Training Boost provides a 20 per cent tax incentive for skills training, meaning SMEs can also invest in increasing their team’s digital fluency. It’s an opportunity to upskill staff, boosting capability and confidence in the introduction, management and use of new digital tools to maximise the opportunities of digitisation.


Last night’s budget announcement is a welcome acknowledgement of the role Australian SMEs play in building future jobs, underpinning and boosting our national economy. It’s about recognising the transformation of the business landscape and providing an investment which will offer sustainable long-term benefits.

Where could small businesses benefit from the application of these technologies?

The explosion in innovative business solutions available to SMEs can be daunting but focusing on the business processes that matter most is helpful. For most businesses these include:

  • Managing cash flow: including payment solutions and access to working capital and lending solution
  • Growing revenue: accessing new markets and managing customers actively
  • Managing work in progress: including jobs and project management
  • Managing supply chains: inventory management and logistics
  • Managing people: workforce scheduling, payroll and onboarding
  • Managing compliance: including, tax, reporting, health and safety and so on.

Equally important in the selection of these solutions is the relationship between them. For many businesses the cost of disconnection, where online systems don’t work together and data doesn’t flow well, can hold them back from achieving their ambitions. As a business management platform, MYOB is focused on integrating the workflows that matter most for small and medium businesses. We understand the value of visible data that informs confident business decisions.

We encourage all SMEs to take advantage of these incentives. The Technology Investment Boost is available from now until June 2023, for any small business with an aggregated annual turnover of less than $50million. The Skills and Training Boost is also available now but with an extended period to June 2024 for businesses to take part in the scheme.

References

[1] GlobalData, Feb 2022
[2] MYOB Business Monitor, January 2022
[3] Connected Small Business Deloitte Access Economics, 2017
[4] Closing the digital gap: an incentive for SMEs, May 2021

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