Start the New Financial Year with Clarity and Focus: Why Your Business Needs a Budget That Goes Beyond the Numbers As we are underway in the new financial year, now is the ideal time to take stock and set clear direction for your business. One of the most critical tools to support sustainable business performance and growth is a strategic budget — one that does more than just estimate income and expenses. A successful budget incorporates financial targets, key performance indicators (KPIs), and capacity planning to ensure your business is well-positioned to meet its cash commitments and long-term goals. Why Budgeting Matters Now More Than Ever Budgeting isn’t just about increasing last year’s revenue number, it’s about clarity, control, and confidence. When done well, budgeting allows you to: Set measurable targets that align with your strategic goals Track your performance against KPIs to spot opportunities and weaknesses early Ensure cash flow stability , helping you meet your obligations and commitments Plan your resource allocation, from staffing and production to capital investments Anticipate bottlenecks that may limit your growth potential Integrating Capacity Planning for Growth The best business budgets map your available capacity and operational constraints. This goes beyond simply projecting revenue. It considers: What maximum level can be achieved with the current level of resources Where are our constraints are, whether time, staffing, cashflow, infrastructure etc What our current level of utilisation is running at These insights help transform your budget from a passive forecast into a proactive decision-making tool. It can help you to better understand where to allocate your resources and where to focus operational improvements to boost profitability. The Outcome Businesses that budget effectively: Make informed decisions Can adapt more quickly to unforeseen changes Can grow with greater predictability on results and cashflow Enjoy greater peace of mind knowing the impact of their decisions and their likely position at the end of the year If you would like support building a budget that integrates cash flow, KPIs, and capacity planning, our team can guide you through the process. Please call our office on 02 60241655 or email advisory@st-m.com.au

Xero Ignite: Current $35/month | Price from 1 July $35/month (no change) Grow: Current $70/month | Price from 1 July $75/month (increase $5) Comprehensive: Current $90/month | Price from 1 July $100/month (increase $10)) Ultimate 10: Current $115/month Price from 1 July $130/month (increase $15) Ultimate 20: Current $145/month Price from 1 July $162/month (increase $17) Ultimate 50: Current $200/month Price from 1 July $222/month (increase $22) Ultimate 100: Current $245/month | Price from 1 July $272/month (increase $27)  MYOB Business Price effective as at 1 July 2025 What’s changing: Payroll will no longer be included in the subscription price for MYOB Business Lite and Business Pro and will be an additional $2 per month per employee. MYOB Business Lite: Price from 1 July $34/month MYOB Business Pro: Price from 1 July $63/month MYOB Business AccountRight Plus: Price from 1 July $150/month QuickBooks Online Price effective as at 1 July 2025 Simple Start: Price as at 1 July $29/month Essentials: Price as at 1 July $45/month Plus: Price as at 1 July $60/month Advanced: Price as at 1 July $110/month What Should You Do? - Review your current usage. Are you using all the features of your plan? You might be able to downgrade—or need to upgrade. - Speak to us. We can help you evaluate the right accounting software and ensure it's set up correctly for your business and compliance needs. Please call Perrie on 02 6024 1655 or email bookkeeping@st-m.com.au .

The Victorian Government has established the Farm Drought Support Grants program to assist primary production businesses to implement on-farm infrastructure improvements & undertake essential business activities that help in the management of current drought conditions and enhance the preparedness and long-term viability of their business in a changing climate. This program is available to eligible primary production businesses in all Local Government Area’s (LGAs) of Victoria and the unincorporated area of French Island. Eligible primary production businesses are required to provide dollar for dollar matching funding co-contribution. A grant of up to $5,000 (excluding GST) per eligible primary production business is available statewide. Grants will be available from the date the program opens until program funds are fully allocated or 30 June 2026, whichever occurs first. Eligible activities include: Items to construct a new, or upgrade an existing, stock containment area (SCA) – such as fencing, gates, troughs, piping, tanks & pumps Reticulated water systems using pumps, piping, tanks & troughs for livestock Irrigation system upgrades (e.g. automated systems) Purchase or repair of fixed infrastructure (e.g. irrigation pumps, repairing piping, replace troughs, upgrade tanks) Improved on-farm water infrastructure for stock management (e.g. consolidating/enlarging/desilting farm dams) Technologies to improve drought management efficiencies to farm production systems (e.g. soil moisture monitoring, weather stations, telemetry sensor equipment) Grain & fodder storage (e.g. silos, silage bunkers, hay sheds) Internal fencing to better match property layout with land capability or improve management Fencing for the exclusion of wildlife to protect and manage crops & pastures Addition of shelter belts for shade, wind brakes and erosion control Drilling of new stock water bores and associated power supply such as generators Improving waste water and effluent management systems Upgrading of areas (e.g. laneway upgrades, repairs or expansion) to deliver lasting benefits directly linked to productivity and profitability Feeding system upgrades (e.g. feed pads or feed troughs) Pasture/crop restoration (e.g. associated seed and fertilizer costs, contractor costs such has cultivation and sowing, direct drilling, smudging or harrowing, rolling etc) Water carting for livestock & essential business activities (e.g. dairy washdown) Testing (such as soil, water or feed testing) to support drought management decisions Professional advice to support business planning & drought management decisions, including for animal welfare Who can apply? The grant of up to $5,000 (excluding GST) is available per eligible primary production business with an additional $5,0000 (excluding GST) for those in eligible LGA’s is south west Victoria. Eligible applications must meet the following requirements: Own, share or lease a primary production business in Victoria Hold a current Australian Business Number (ABN) and have held that ABN at the time of the program announcement (30 September 2024) Devote part of their labour to the primary production business Derive more than 50% of gross income from the primary production business in an average year OR generate more than $75,000 gross income from the primary production business in an average year

The Australian Government’s long-planned increase to the Superannuation Guarantee (SG) rate is set to reach its final legislated milestone on 1 July 2025 , when the rate will rise from 11.5% to 12% of an employee’s ordinary time earnings. This change represents the final step in a series of incremental increases outlined in the Superannuation Guarantee (Administration) Act 1992, aimed at improving retirement outcomes for Australian workers. What Is the Superannuation Guarantee? The Superannuation Guarantee is a compulsory system in Australia where employers must contribute a set percentage of an employee’s earnings into a complying superannuation fund. This system is designed to help Australians save for retirement over the course of their working life. What This Means for Employers From 1 July 2025 , employers will need to contribute 12% of eligible employees’ ordinary time earnings to their superannuation fund. This change applies to all employees eligible for SG contributions under Australian law, including casual, part-time, and full-time workers. Key considerations for employers: Payroll systems will need to be updated to reflect the 12% contribution rate from the first pay cycle in July 2025. Employment contracts that include a “total remuneration” or “salary package” approach may require adjustment, as the super increase could impact the breakdown between take-home pay and super contributions. Cash flow planning should take into account the higher SG obligation, particularly for small to medium enterprises. What This Means for Employees For employees, the SG increase is a significant step towards a more secure retirement. An increase in super contributions—even by 0.5%—can have a substantial impact over the course of a career, thanks to the power of compounding interest. Planning Ahead The upcoming change presents an opportunity for both employers and employees to review their superannuation arrangements and ensure compliance and understanding. Employers should: Communicate clearly with employees about how the SG increase may affect them. Ensure HR and finance teams are ready for the change. Consult with payroll providers or advisors if needed. Employees should: Review their superannuation statements. Consider seeking financial advice to understand how this increase can support their retirement goals. Final Thoughts The increase of the Superannuation Guarantee rate to 12% is a significant milestone in Australia’s long-term retirement strategy. While it may present short-term adjustments for some businesses and workers, it ultimately aims to build stronger financial security for Australians in their retirement years. If you require any additional information, or assistance with these changes, call our office on 02 6024 1655 or email advisory@st-m.com.au

Managing employee absences can be a challenge for any business. Here we explore a key foundational element in managing employee absences: a clear and effective personal leave policy . Understanding Personal/Carer’s Leave Personal/carer’s leave—commonly known as sick leave—is an entitlement under the National Employment Standards (NES) for all employees except casuals. Under the NES, full-time employees are entitled to 10 days of paid leave per year, with part-time employees receiving a pro-rata amount. This leave can be used when an employee is unwell, injured, or needs to care for an immediate family or household member dealing with illness, injury or an emergency. Yet many businesses face recurring questions: Do employees and managers fully understand how personal leave works? Are there ongoing issues with absenteeism? Are expectations clear across your organisation? That’s where a solid policy comes in. What Is a Personal Leave Policy? A personal leave policy outlines the procedures, expectations, and documentation required when an employee accesses personal leave. It ensures all staff are aware of their rights and responsibilities, and helps managers handle leave requests fairly and consistently. We’ll delve into exactly what should be included in a personal leave policy in next week’s edition—but first, here’s why you need one. Why Every Business Should Have a Personal Leave Policy A well-structured personal leave policy supports your business in multiple ways: 1. Supporting Employee Wellbeing Employees should feel comfortable taking time off for health or family needs without fear of consequences. A clear policy demonstrates your commitment to staff welfare and helps reduce stress, burnout, and long-term absenteeism. 2. Ensuring Legal Compliance Leave entitlements are legally mandated. Having a documented policy helps ensure your business complies with the NES and other employment obligations, reducing the risk of legal issues or Fair Work penalties. 3. Improving Productivity and Engagement When employees feel supported, they’re more likely to stay engaged, motivated, and productive. A transparent policy can increase trust and alignment between staff and management. 4. Providing Clarity and Consistency A personal leave policy eliminates guesswork by setting out clear steps for: Notifying managers of an absence Providing evidence, if required Applying for leave—whether in advance or after the absence Consistency in how leave is handled reduces friction and builds a culture of fairness. Can a Personal Leave Policy Help Prevent Absenteeism? Yes—when implemented properly, a leave policy can actually reduce absenteeism. By outlining clear processes and expectations, employees are less likely to take unauthorised time off or feel unsure about what’s allowed. It also encourages employees to use leave responsibly, take the time they need when they need it, and return to work feeling supported and refreshed. Final Thoughts  Establishing a personal leave policy isn’t just about compliance—it’s about creating a healthy, respectful, and efficient workplace. When employees know where they stand, everyone benefits. If you need assistance developing or reviewing your workplace policies, our team at Stewart, Tracy & Mylon is here to help. Email advisory@st-m.com.au or phone us on 02 6024 1655 to discuss your personal circumstances. Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

In the 2025-26 Federal Budget the Government announced a ban on non-compete clauses and “no poach” agreements. In the 2025-26 Federal Budget, the Government announced its intention to ban non-compete clauses for low and middle-income employees and consult on the use of non-compete clauses for those on high incomes (under the Fair Work Act the high income threshold is currently $175,000). The reason? A recent Australian Bureau of Statistics (ABS) report found that 46.9% of businesses surveyed used some kind of restraint clause, including for workers in non-executive roles. The survey also found 20.8% of businesses use non-compete clauses for at least some of their staff and 68.2% for more than three-quarters of their employees. From an economic perspective, declining job mobility impacts wage growth and innovation as restraints prevent access to skilled workers within the economy. Productivity is a key concern as Australia’s productivity has declined in the last 20 years. Treasury’s consultation paper Non-compete clauses and other restraints states that, “the direct consequence of a non-compete clause is that it hinders competition among businesses: it disincentivises workers from leaving their current job, creating a barrier to the entry of new businesses and the expansion of existing businesses.” A Productivity Commission report estimates the effect of limiting the use of unreasonable restraint of trade clauses will be increased wages for workers - by up to up to 2.4% in industries with high use of non-compete clauses and up to 1.4% in others. Non-competes: the state of play Non-compete clauses in Australia are generally enforced under common law. For all regions except New South Wales, restraints are generally presumed to be against the public interest and therefore void and unenforceable except where they are deemed to be reasonably necessary to protect the legitimate interest of the employer [1] . In NSW, a restraint of trade is valid to the extent to which it is not against public policy. When non-competes are contested, the courts consider the nature and extent of the business interest to be protected (e.g., confidential client information) and whether the scope of restriction the business wants imposed is reasonable including its geographic area, time period and activities which the restraint seeks to control. Interests considered ‘legitimate’ by courts include the protection of trade secrets or other confidential information; protection against solicitation of clients with whom the former worker had a personal connection; and protection against key staff being recruited by a former colleague. An employer is not entitled to protect themselves against mere competition by a former worker . What now The ban on non-compete clauses was announced in the 2025-26 Federal Budget. The Government has stated that it intends to consult on policy details, including exemptions, penalties, and transition arrangements. Following consultation and the passage of legislation, the reforms are anticipated to take effect from 2027, operating prospectively. There is a lot of uncertainty at this stage about this measure, despite the enthusiasm of the Treasury economists, not least of which is the impending election. We’ll bring you more as further information is available.  Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

The ATO has updated its small business benchmarks with the latest data taken from the 2022–23 financial year. These benchmarks cover 100 industries and allow small businesses to compare their performance, including turnover and expenses, against others in their industry. While the ATO doesn’t use the benchmarks in isolation, small businesses who fall outside the ATO’s benchmarks are more likely to trigger a closer examination from the ATO. The ATO uses information reported in business tax return with key performance benchmarks for the relevant industry to identify potential tax risks. Aside from determining the risk of unwanted attention from the ATO, the benchmarks can also be used to compare your business performance against other businesses in the same industry. The benchmarks could help you spot areas where you might be able to reduce costs or improve efficiency. The small business benchmarks can be accessed here . Aside from the small business benchmarks, the ATO also has a business viability assessment tool which can help business owners identify whether there are any obvious financial risks. The ATO consider a business to be viable if it is generating sufficient profits to meet commitments to creditors and provide a return to the business owners. If a business isn’t generating profits, the ATO looks at whether the business has sufficient cash reserves to sustain itself. The business viability assessment tool can be found here . Please let us know if you would like us to review your business performance and make recommendations on ways that performance could be improved. email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

As the urban sprawl continues in most major Australian cities, we are often asked to advise on the tax treatment of subdivision projects. Before jumping in and committing to anything, it is important to understand the tax liabilities that might arise from these projects. Unfortunately, many people make incorrect assumptions about the way that subdivision projects will be taxed, often believing that any tax exposure will be minimal. However, the reality is that there are a number of important issues that need to be considered and that could have a significant impact on the overall profitability of the project. For example, when someone buys a property with the intention of subdividing it into smaller lots and selling them at a profit in the short term this will normally mean that any profit is taxed as ordinary income, rather than being taxed under the CGT rules. This means that the general CGT discount would not be available to reduce the tax liability, even if the property has been held for more than 12 months and it would not be possible to apply capital losses to reduce the taxable amount. Also, in situations like this the sale of the subdivided lots will often trigger a GST liability, further reducing any after-tax profits generated from the project. Many people fail to properly estimate the income tax and GST liabilities that will arise from property projects and can end up with a nasty shock when they realise the impact this has on the economic viability of the project. The ATO has recently updated its guidance in this area, adding a number of new and practical examples to demonstrate how the tax rules will typically apply. The ATO’s examples cover the income tax and GST consequences of common property transactions such as property flipping, subdivision projects and property development activities.  For example, in one of the examples the ATO looks at a scenario where the taxpayer repeatedly buys, renovates, and sells properties. They engage in market research, seeking professional advice, taking out business loans, and then carrying out renovations in a business-like manner. The ATO takes the view that the taxpayer is running a business, since the taxpayer’s primary intention is to make a profit from the renovations and reselling of the property. The profits are treated as ordinary income and taxed on revenue account. The CGT provisions don’t apply here since the property is held as trading stock. However, GST doesn’t apply on this particular situation as long as the properties have not undergone “substantial renovations”, which needs to be considered carefully. On the other hand, in another example the ATO deals with a taxpayer who subdivides the vacant land from their main residence because of ill health and growing debt levels. Since they didn’t initially intend to profit from the subdivision and sale of the vacant land, the sale is viewed as the mere realisation of a capital asset rather than a business venture. The activities related to the subdivision are limited to necessary actions for council approval, reflecting a low level of complexity and small scale. The sale of the subdivided lot is taxed on capital account under the CGT rules, qualifying for the general CGT discount if the land has been held for more than 12 months. However, the main residence exemption cannot apply because the land is not being sold together with the dwelling that has been used as the taxpayer’s main residence. You can find the ATO’s guide and examples here Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk. Email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

With the end of the financial year fast approaching we outline some opportunities to maximise your deductions and give you the low down on areas at risk of increased ATO scrutiny. Opportunities Bolstering superannuation If growing your superannuation is a strategy you are pursuing, and your total superannuation balance allows it, you could make a one-off deductible contribution to your superannuation if you have not used your $30,000 cap. This cap includes superannuation guarantee paid by your employer, amounts you have salary sacrificed into super and any amounts you have contributed personally that will be claimed as a tax deduction. If your total superannuation balance on 30 June 2024 was below $500,000 you might be able to access any unused concessional cap amounts from the last five years in 2024-25 as a personal contribution. For example, if you were $8,000 under the cap in each of the last 5 years, you could contribute an additional $40,000 and take the tax deduction in this financial year at your personal tax rate. To make a deductible contribution to your superannuation, you need to be aged under 75, lodge a notice of intent to claim a deduction in the approved form (check with your superannuation fund), and receive an acknowledgement from your fund before you lodge your tax return. For those aged between 67 and 74, you can only claim a deduction on a personal contribution to super if you meet the work test (i.e., work at least 40 hours during a consecutive 30-day period in the income year, although some special exemptions might apply). If your spouse’s assessable income is less than $37,000 and you both meet the eligibility criteria, you could contribute to their superannuation and claim a $540 tax offset. If you are likely to face a tax bill this year and you made a capital gain on shares or property you sold, then making a larger personal superannuation contribution might help to offset the tax you owe. Charitable donations When you donate money (or sometimes property) to a registered deductible gift recipient (DGR), you can claim amounts of $2 and above as a tax deduction. The more tax you pay, the more valuable the tax deductible donation is to you. For example, a $10,000 donation to a DGR can create a $3,250 deduction for someone earning up to $120,000 but $4,500 to someone earning $180,000 or more (excluding Medicare levy). To be deductible, the donation must be a gift and not in exchange for something. Special rules apply for amounts relating to charity auctions and fundraising events run by a DGR. Philanthropic giving can be undertaken in a number of different ways. Rather than providing gifts to a specific charity, it might be worth exploring the option of giving to a public ancillary fund or setting up a private ancillary fund. Donations made to these funds can often qualify for an immediate deduction, with the fund then investing and managing the money over time. The fund generally needs to distribute a certain portion of its net assets to DGRs each year. Investment property owners If you do not have one already, a depreciation schedule is a report that helps you calculate deductions for the natural wear and tear over time on your investment property. Depending on your property, it might help to maximise your deductions. Risks Work from home expenses Working from home is a normal part of life for many workers, and while you can’t claim the cost of your morning coffee, biscuits or toilet paper (seriously, people have tried), you can claim certain additional expenses you incur. But, work from home expenses are an area of ATO scrutiny. There are two methods of claiming your work from home expenses; the short-cut method, and the actual method. The short-cut method allows you to claim a fixed rate of 70c for every hour you work from home for the year ending 30 June 2025. This covers your energy expenses (electricity and gas), internet expenses, mobile and home phone expenses, and stationery and computer consumables such as ink and paper. To use this method, it’s essential that you keep a record of the actual days and times you work from home because the ATO has stated that they will not accept estimates. The alternative is to claim the actual expenses you have incurred on top of your normal running costs for working from home. You will need copies of your expenses, and your diary for at least 4 continuous weeks that represents your typical work pattern. Landlords beware If you own an investment property, a key concept to understand is that you can only claim a deduction for expenses you incurred in the course of earning income. That is, the property normally needs to be rented or genuinely available for rent to claim the expenses. Sounds obvious but taxpayers claiming investment property expenses when the property was being used by family or friends, taken off the market for some reason or listed for an unreasonable rental rate, is a major focus for the ATO, particularly if your property is in a holiday hotspot. There are a series of issues the ATO is actively pursuing this tax season. These include: Refinancing and redrawing loans – you can normally claim interest on the amount borrowed for the rental property as a deduction. However, where any part of the loan relates to personal expenses, or where part of the loan has been refinanced to free up cash for your personal needs (school fees, holidays etc.,), then the loan expenses need to be apportioned and only that portion that relates to the rental property can be claimed. The ATO matches data from financial institutions to identify taxpayers who are claiming more than they should for interest expenses. The difference between repairs and maintenance and capital improvements – while repairs and maintenance costs can often be claimed immediately, a deduction for capital works is generally spread over a number of years. Repairs and maintenance expenses must relate directly to the wear and tear resulting from the property being rented out and generally involve restoring the property back to its previous state, for example, replacing damaged palings of a fence. You cannot claim repairs required when you first purchased the property. Capital works however, such as structural improvements to the property, are normally deducted at 2.5% of the construction cost for 40 years from the date construction was completed. Where you replace an entire asset, like a hot water system, this is a depreciating asset and the deduction is claimed over time (different rates and time periods apply to different assets). Co-owned property – rental income and expenses must normally be claimed according to your legal interest in the property. Joint tenant owners must claim 50% of the expenses and income, and tenants in common according to their legal ownership percentage. It does not matter who actually paid for the expenses. Gig economy income It’s essential that any income (including money, appearance fees, and ‘gifts’) earned from platforms such as Airbnb, Stayz, Uber, YouTube, etc., is declared in your tax return. The tax rules consider that you have earned the income “as soon as it is applied or dealt with in any way on your behalf or as you direct”. If you are a content creator for example, this is when your account is credited, not when you direct the money to be paid to your personal or business account. Squirrelling it away from the ATO in your platform account won’t protect you from paying tax on it. Since 1 July 2023, the platforms delivering ride-sourcing, taxi travel, and short-term accommodation (under 90 days), have been required to report transactions made through their platform to the ATO under the sharing economy reporting regime so expect the ATO to utilise data matching activities to identify unreported income. Other sharing economy platforms have been required to start reporting from 1 July 2024. If you have income you have not declared, do it now before the ATO discover it and apply penalties and interest. For your business Opportunities Write-off bad debts Your customer definitely not going to pay you? If all attempts have failed, the debt can be written off by 30 June to claim a deduction this year. Ensure you document the fact that you have written off the bad debt on your debtor’s ledger or with a minute. Obsolete plant & equipment If your business has obsolete plant and equipment sitting on your depreciation schedule, instead of depreciating a small amount each year, scrap it and write it off before 30 June if you don’t use it anymore. For companies If it makes sense to do so, bring forward tax deductions by committing to pay directors’ fees and employee bonuses (by resolution), and paying June quarter super contributions in June. Risks Tax debt and not meeting reporting obligations Failing to lodge returns is a huge ‘red flag’ for the ATO that something is wrong in the business. Not lodging a tax return will not stop the debt escalating because the ATO has the power to simply issue an assessment of what they think your business owes. If your business is having trouble meeting its tax or reporting obligations, we can assist by working with the ATO on your behalf. Professional firm profits For professional services firms - architects, lawyers, accountants, etc., - the ATO is actively reviewing how profits flow through to the professionals involved, looking to see whether structures are in place to divert income to reduce the tax they would be expected to pay. Where professionals are not appropriately rewarded for the services they provide to the business, or they receive a reward which is substantially less than the value of those services, the ATO is likely to take action. Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk. Email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.