01 January 2021
4 min read
Happy New Year to all our clients, in this our first Business Wrap for 2021.
There’s good and possibly not-so-good news as we enter the new year. On the upside, the economy is doing better than expected, and we seem to be on the right side of a V-shaped recovery at this point.
However, on the other side of the ledger, the popular federal government JobKeeper grant is set to finish on 28 March. As is well documented, the effect of JobKeeper stopping is a big unknown. Some other grants or schemes, like the Commercial Tenancy Relief Scheme, which is aligned with JobKeeper, will also be phased out early this year.
There is talk of further government support for the hospitality and tourism sectors until borders are open again and other conditions normalise – but nothing concrete yet.
According to Damien Petty, CEO and founder of Fundsquire the federal government continues to support businesses through a wide range of different grants, some designed to ensure Australian small and medium enterprises (SMEs) can compete globally.
Outlined below are just three federal government business grants available for SMEs – there are quite a few more. Talk to your adviser, or set aside some time to research and find out whether your business is, or could be eligible.
- Research and Development tax incentive
- Export Market Development Grant
- Accelerating Commercialisation Grant
The economy is doing better than expected, and we seem to be on the right side of a V-shaped recovery at this point.
Research and Development (R & D) tax incentive
This federal government incentive provides targeted R & D tax offsets, designed to encourage more companies to engage in R & D.
It aims to boost Australian competitiveness and productivity, by encouraging SMEs to conduct R&D that they may not otherwise have done. By improving the motivation for smaller companies to carry out R & D, it provides them with more predictable, less complex support.
Ideally your company’s research and development should add competitive advantages that lead to sales and growth.
If your business currently spends, or plans to spend at least $20,000 on eligible R & D work to create new technology, products, services, or systems that you’ll either either use or sell, you could be eligible for this incentive.
Provided you’re an eligible pre-profit or loss making company with an aggregated turnover of less than $20 million per annum, a 43.5% refundable tax offset is available. Therefore, for every $100 spent on R & D, a $43.50 cash credit is applied by the ATO.
For profit-making, tax paying companies, there is a 38.5% non-refundable tax offset (entities may be able to carry forward unused offset amounts to future income years).
Export Market Development Grant
Administered by Austrade, the Export Market Development Grant (EMDG) is designed to encourage SMEs to develop export markets. Aspiring and current exporters from a wide range of industries are eligible for this government financial assistance program.
For eligible companies, the EMDG:
- reimburses up to 50 per cent of eligible export promotion expenses above $5,000, provided that the total expenses are at least $15,000
- provides up to eight grants to each eligible applicant
The maximum grant for eligible applicants is $150,000, subject to funds available in the scheme.
To find out if your business would qualify, visit Austrade.
The Export Market Development Grant (EMDG) is designed to encourage SMEs to develop export markets.
Accelerating Commercialisation Grant
If you’re an SME, entrepreneur or researcher trying to get an original (‘novel’) product, process or service to market, this grant can give you access to expert advice and significant funding.
- expert advice and guidance
- up to $500,000 of matched project funding for Research Commercialisation Entities and Eligible Partner Entities
- up to $1 million of matched project funding for all other eligible applicants.
There’s more detail about these, and the full range of government grants at https://www.business.gov.au/