Who better to bring you the low down on Budget 2019 for startups than your startup friendly accountants, right?
So, fresh from watching Treasurer Josh Frydenberg’s speech and the (much more interesting, ahem) Xero budget briefing … here you have it.
The short story is: There wasn’t a lot of exciting news in Budget 2019 for startups. But there is definitely still some stuff worth knowing about.
More certainty for Export Market Development Grants
We think this is the biggest takeaway from Budget 2019 for startups.
Export Market Development Grants (EMDG) is a Federal Government scheme that supports exporters. As part of this year’s budget, the government is injecting an additional $60 million into the scheme to help businesses considering exporting for the first time or developing new overseas markets.
If this is you, it’s worth being aware that spending eligible for the EMDG scheme is not just about paying Facebook and Google. It’s also available to spend on travelling overseas for marketing, offshore marketing agents and patents.
More good news: Income asset write off changes
This popular tax tool has been renewed (for the third time) and extended. It’s an immediate write off for any asset purchases that cost up to a certain amount.
That amount was $20,000 but it will now cover purchases up to $30,000. And it will now be available for businesses with annual turnover of under $50 million, up from $10 million previously. This is good news for startups.
R&D tax incentive – nothing to see here
There was an expected $1.35 billion in savings buried in the budget documents however … and it’s unclear whether this is going to come from further cuts to the R&D offset rates, and therefore the cash refunds that startups can receive. Like everyone in the startup community, we sincerely hope not.
And of course, tax cuts
Yep, it is election year after all! And as you’d probably expect, they were beefed up a bit. Here’s our quick summary:
- Most of the tax relief flows to middle-income earners – if you’re on $48,000 to $90,000 a year, you’ll get a tax cut of $550. This will affect millions of Aussies, with the average full-time worker earning between $80,000 and $90,000
- The government is fast-tracking planned tax cuts for small and medium businesses by five years. Basically, it means the tax rate will come down from 27.5 per cent to 26 per cent in 2020 and 25 per cent in 2021
And personally …
On a personal level, we were really glad to see a solid commitment in Budget 2019 to increasing funding for mental health. We see the pressures that startup founders are under all the time, so any support in this area is really welcome.
And that’s it for another budget! We’re crossing our fingers for a lot more positive attention to startups and innovation in next year’s one.
As always with this stuff, please don’t take any of it as gospel (or personal tax advice). Please speak to us for that.