What is the Australia Technology Investment Boost, and how do SMEs get started to leverage government funding?

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Australia wants its small and midsize enterprises (SMEs) to spend more on digital tools over the next year. The national government is backing up its good intentions with $1 billion worth of tax incentives to encourage digital adoption across the nation.

The program works like this: SMEs can earn a $120 tax deduction for every $100 they pour into the digital economy in areas like cybersecurity, web design, cloud adoption, and flexible-work solutions. That works out to a 20% return on every dollar invested. Imagine getting those kinds of returns in the financial markets today! And yet, most business owners aren’t aware of the current digitalisation incentives, whether it applies to them, or how they can benefit.

Who can get the tax break?

Any Australian company with a turnover rate below $50 million per annum is eligible. How much can they spend? Up to $100,000 per year. How might it work in the real world?

Here’s an example inspired by the website of the Australian Government: Let’s say a company sells pop music memorabilia through its physical store, which had to limit its operations during the COVID-19 pandemic. The company’s website kept revenue flowing and enjoyed an unexpected bonus: Lots of new demand from overseas customers. The challenge: The store needs new computer hardware, a website redesign, and a digital marketing strategy that will cost $30,000. The government’s Technology Investment Boost allows the company to claim an extra $6,000 in deductions ($30,000 plus the 20% bonus) — generating an extra $1,500 to spend any way they want.

Why should Australian small businesses invest in digital technology?

Here at GoTo, we have a few ideas, of course, because we specialise in helping smaller companies use technology to build better businesses. And we make sure it’s easy for SMEs to acquire, implement, and use our tools.

Australian SME technology leaders should think about adapting to the rising popularity of flexible work schedules. We commissioned a survey with the research firm Frost & Sullivan, which talked to IT decision makers in companies with less than 1,000 knowledge-based employees in Australia, the United States, United Kingdom, Ireland, Germany, Italy, and India. Conducted in February-March 2022, the survey found that:

  • Hybrid scheduling and remote work can boost productivity and brighten company culture — but they also complicate things like implementing and managing information technology. Things get even stickier for companies that have inadequate resources and don’t have the right technology. Just over three-quarters of respondents (and 84% of Australians) said flex work piled extra workload on IT people.
  • Businesses that added remote-work capability in a mad rush two years ago now realise they have a lot of duplication in their technology stack. Indeed, 95% of respondents to the Frost & Sullivan survey plan to consolidate their remote-work technologies in 2022.

The Australian government is riding a rising tide of technology investments. For instance, the research firm Gartner expects IT and communication spending to hit $67 billion in 2022, up 10 percent from 2021 and more than triple the global average of 3.2%.

Digital technologies offer some of the best opportunities to boost productivity, expand market share, and retain great employees. With the tax incentives, Australian SMEs should tap these benefits at a tidy discount while they’re still available (the tax break expires in June 2023).

How should Australian SMEs prepare to boost IT investments?

You need a sound strategy for buying IT gear and software services. Before you spend the first dollar, analyse your current business environment. Where is the growth coming from? Where are your competitors lagging and how can you build on your advantages?

Set time aside to assess your personnel challenges. Why do people leave, and why do they stay? Will flexible scheduling and remote work improve retention?

Need a few more ideas? Frost & Sullivan’s research identified Australian companies’ top rationales for investing in IT:

  • Supports IT process automation (34%)
  • Provides value for the money (30%)
  • Reduces IT burdens by improving administration and management
  • Bolsters performance and reliability (20%)
  • Improves employee productivity (18%)

Tech-savvy business leaders also put a premium on time-to-value: deploying technologies that drive the quickest return on investment and competitive advantage.

The GoTo advantage for Australian SMEs

You knew this was coming, so here’s our pitch:

GoTo has a world-class suite of tools for collaboration, telephony, IT support, customer communications and more. All of these tools are designed to work together or separately on a unified technology platform. We pile extra development hours into making our software super-simple and fast to deploy and use in growing businesses with limited IT staff.

There’s no time to wait and there’s no reason to. These tax benefits are available for a limited time. The market is constantly transforming, and SMEs cannot afford to be left behind.

Check out what we offer on at GoTo.com and ask us how we can help you make the smartest decision.

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