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Federal Budget 2022-23 | Highlight Reel

Federal Budget 2022-23 | Highlight Reel

Our team have been eagerly awaiting the arrival of the new federal budget, and with this ever changing economic landscape there are some key take aways that will impact your Business!

We have provided you with a relevant highlight reel so you can see both the impact and opportunity for you coming out of the release of the federal budget this week.

Tech Investment Boost

In the Government’s attempt to reduce the digital gap between small businesses and multi-national businesses, a temporary technology investment incentive has been announced.

Businesses with an aggregated turnover of less than $50m (small businesses) can claim an additional 20% deduction on the cost of expenditure incurred on business expenses and depreciating assets that support digital adoption. This will allow small businesses an ability to claim up to 120% deductions.

The expenditure must be incurred between 7.30pm (AEDT) on 29 March 2022 and 30 June 2023.

An annual cap of $100,000 will apply for each income year in which the expenditure is incurred.

Patent Box Expansion

Following the announcement, the patent box regime will be extended to include eligible patents in the agricultural sector and those focussed on low emissions technology innovations.  The regime will apply to these additional sectors, in respect of eligible patents issued after 29 March 2022 for income years starting on or after 1 July 2023.

To be eligible, commercialised agricultural patents will need to be linked to agricultural and veterinary chemical products listed on the Australian Pesticides and Veterinary Medicines Authority (APVMA), PubCRIS (Public Chemicals Registration Information System) register, or eligible Plant Breeder’s Rights (PBRs).

With respect to low emissions technologies, patents will need to be:

  • technology considered to reduce emissions; or
  • Fall within the 140 technology areas listed in the Government’s 2020 Technology and Investment Roadmap Discussion Paper; or
  • Included as priority technologies in the Government’s annual Low Emissions Technology Statements.

Additionally, last year’s Budget proposed that medical and biotechnology patents were only eligible if applied for after the 2021-2022 announcement.

Following consultation, this has now been expanded to allow patents granted after 11 May 2021, with patents granted in the United States and Europe as well as those granted by IP Australia being recognised under the regime.

R&D Tax Incentive

An additional $100 Million in funding to the Export Market Development (EMDG) Program to support regional and small to medium sized exporters to promote their goods and services in overseas markets.

A $750 Million top up to support National Manufacturing Priorities which include:

  • Resources Technology & Critical Minerals Processing
  • Food & Beverage
  • Medical Products
  • Recycling & Clean Energy
  • Defence
  • Space

The Government is driving university-industry collaboration, workforce mobility and research translation and commercialisation by providing:

  • $295.2 Million over 5 years from 2021-22 (and around $142.8 million per year ongoing) to establish new research training pathways for students and researchers
  • $150 Million in equity funding over 5 years from 2021-22 to expand the CSIRO Innovation Fund (Main Sequence Ventures)
  • $37.4 Million over 4 years from 2022-23 to establish CSIRO’s Research Translation Start program to take research from the lab into the market by building the entrepreneurial capacity of the research workforce with a focus on the National Manufacturing Priorities

Employee Share Schemes

Participants involved in an Employee Share Scheme of an unlisted company will be able to invest up to:

  • $30,000 per participant per year plus 70% of dividends and cash bonuses, with unexercised options being accruable for up to 5 years; or
  • Any amount, if it would allow them to immediately take advantage of a planned sale of listing of the company to sell their purchased interests at a profit.

The Government also intends to remove the regulatory requirements for offers to independent contractors, where they do not have to pay for interests.

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