Business inflation continues to reshape the economic environment in Australia. Rising costs, shifting tax policies, and digital security changes are impacting how businesses operate. This October 2022 update outlines what you need to know to stay informed and prepared.
Pandemic Leave Disaster Payment Reinstated
In response to more infectious COVID-19 variants, the Commonwealth has reinstated the Pandemic Leave Disaster Payment until 30 September 2022. This move provides support to workers who must isolate and have no access to paid sick leave. Backdated to 1 July 2022, the payment ensures eligible individuals aren’t left out. Payments became accessible from 20 July 2022, with the Commonwealth and States sharing costs equally.
Crisis Payments for National Health Emergencies were also extended to 30 September 2022. These payments support recipients of income support payments or ABSTUDY Living Allowance facing financial hardship due to COVID-19 isolation.
These measures demonstrate a continued commitment to protecting vulnerable Australians and reducing the financial strain on households still navigating the pandemic’s lingering effects.
.au Domain Registration Deadline
With business inflation rising alongside digital threats, securing your online brand is more important than ever. The new .au direct domain offers a shorter, more secure alternative to .com.au or .net.au. Businesses had until 20 September 2022 (UTC) to secure priority registration.
Failing to secure your domain can result in:
- Competitors hijacking traffic
- Domain squatting
- Brand impersonation and cyberattacks
If your application is uncontested, you’ll get access to your .au name soon after applying for priority. In cases where multiple entities apply (e.g., .com.au vs .net.au holders), priority is given based on the domain’s registration date.
Maintaining control of your digital identity is critical in an environment where cyber threats are growing, and customers rely heavily on online platforms to engage with brands.
How to Sell Your Business
In times of business inflation, some owners consider exiting the market. There are two key components to a successful sale:
- Structuring the deal: Covers pricing, contract terms, and tax effectiveness.
- Positioning the business: Involves eliminating barriers to sale, improving performance, and identifying the best time and buyers.
Spending effort on positioning increases the chance of a sale. Structuring ensures you achieve the best outcome once a buyer is found.
Good positioning includes cleaning up financial records, documenting systems and processes, and having a growth plan to present to prospective buyers. Buyers want clarity and confidence in what they’re acquiring.
FBT-Free Electric Vehicles
To encourage cleaner fleets, legislation before Parliament proposes Fringe Benefits Tax (FBT) exemptions for low- and zero-emission vehicles. With business inflation driving up fuel and maintenance costs, this may help reduce overheads.
The policy aims to:
- Remove import tariffs
- Expand national EV charging networks
- Convert 75% of Commonwealth fleet vehicles to no-emissions models
Business fleets make up around 40% of light vehicle sales, but EV uptake remains low. The FBT exemption seeks to improve affordability for businesses.
Long-term, this shift could reduce operating expenses and improve ESG outcomes—a growing factor for investor and consumer confidence.
Using Family Trusts in a Business Structure
Amid rising business inflation, family trusts offer flexibility and asset protection. There are two main approaches:
- Family trust carrying on a business: The trust directly operates the business, allowing annual discretionary profit allocations.
- Family trust owning a company: The trust owns shares in a company that operates the business, offering structure with retained profit and flexible distributions.
These structures may suit family-run businesses looking for tax efficiency and succession planning.
With increasing scrutiny from the ATO, it’s important to ensure any trust arrangements comply with distribution and loan-back rules, especially where companies are used as beneficiaries.
Handling Rising Business Costs
With inflation recorded at 5.1% in Q1 2022, many businesses face increased costs for stock, wages, and logistics. Here are strategies to manage business inflation:
- Track expenses: Know what you’re spending and who’s spending it.
- Separate strategic from non-strategic costs: Cut or consolidate where possible.
- Eliminate inefficiencies: Automate tasks like invoicing, inventory, and admin.
- Reduce supply chain risk: Diversify suppliers, consider domestic alternatives, and stockpile essentials.
Additionally, reviewing supplier contracts and renegotiating terms can help lock in pricing and reduce volatility. Where possible, pass on small, manageable price increases that are transparent and value-justified to clients.
Company Tax Return Checklist
If your company had an outstanding return on 30 June, your next return is due by 31 October. Prepare the following:
- Income: Bank statements, dividend and managed fund statements
- Expenses: Staff costs, super, marketing, loan interest
- Assets & Liabilities: Stock valuation, capital purchases, trade creditors
- Equity: Shareholding changes, shareholder loans, reserve movements
Keeping your records organised also helps in applying for finance, making insurance claims, and preparing for a potential sale or expansion.
Crypto Tax and Regulation
As crypto becomes mainstream, new regulations are on the way. Treasury’s “token mapping” project will guide how crypto assets are regulated in future.
Crypto tax rules include:
- Report gains/losses when assets are disposed
- Claim capital losses only against capital gains
- Hold losses for future use if no gains exist
- Report income from staking and airdrops
More Australians are entering the crypto space without understanding the tax consequences. Education and documentation are critical. Use a crypto portfolio tracker to stay compliant, and seek advice if you trade across multiple platforms.