As we move into 2024, it’s crucial for small business owners to stay informed and adapt to the evolving economic landscape. Here’s a breakdown of the key factors that could impact your business this year:
1. Inflation and Labor Market Dynamics
The Reserve Bank of Australia (RBA) Governor, Michelle Bullock, has indicated that inflation may be slowing down but will take longer than expected to return to target levels. This ongoing inflation and the tight labor market could affect your business operations. While the unemployment rate stands at 3.7%, and wages have seen significant growth, finding high-skilled workers remains challenging. Be prepared for potential wage increases and a competitive job market.
2. Tax Changes and Implications
From July 1, 2024, significant changes are coming into effect regarding personal income tax brackets. This includes the merging of the 32.5% and 37% tax brackets into a single 30% rate for incomes between $45,001 and $200,000. Additionally, the superannuation guarantee rate is set to rise to 11.5%. These changes could affect both your tax planning and your employees’ take-home pay.
3. Concessions and Incentives for Small Businesses
Several concessions and incentives are scheduled to change:
- The Skills and Training Boost, which offers a 20% bonus deduction for eligible external worker training, ends on June 30, 2024.
- The Small Business Energy Incentive, providing an additional 20% deduction on certain energy-efficient assets, is also due to end on June 30, 2024. However, this is subject to legislative approval.
- The instant asset write-off threshold for businesses with turnover under $10m will revert to $1,000 from July 1, 2024.
Staying aware of these changes is vital for your financial planning.
4. Evolving Worker Rights
The workplace landscape is changing, with a 5.75% increase in the minimum wage and new rules around fixed-term employment contracts. There’s also a landmark case redefining contractor versus employee status, which means you’ll need to carefully review your contracts to ensure compliance. Additionally, there’s more flexibility in unpaid parental leave, which could impact your staffing plans.
Adapting
2024 presents a mix of challenges and opportunities for small businesses. Keeping abreast of economic trends, regulatory changes, and labor market shifts will be key to navigating this year successfully. Remember, adapting to change and planning ahead can make all the difference in maintaining a resilient and thriving business.