The printing industry has given Tuesday’s federal Budget a big nod of approval with the extended instant asset write-off measures and the loss carry-back tax initiative drawing the highest commendations.
There is also high levels of support amongst the industry for the JobTrainer programme, the JobMaker Hiring Credits scheme for those aged 16 to 35 who are on JobSeeker and the wage subsidies for another 100,000 apprentices and trainees.
The federal government delivered a historic Budget this week aimed squarely at reviving the Australian economy and bringing it out of a COVID-induced recession largely through investment in infrastructure spend, wage subsidies and personal tax cuts.
Visual Connections CEO Peter Harper welcomed the Budget and said the instant asset-write off initiative and the carry-back tax measures would be most helpful for businesses.
“The extension of the write-off for business investment in eligible assets, which will now apply to businesses with a turnover of up to $5 billion, is welcome news, particularly with PacPrint coming up in September next year – although, with so many SMEs in our industry, most of whom were already eligible, the overall impact will be negligible,” Harper said.
“What may help those small businesses is the tax loss carry-back measures for businesses under that $5 billion turnover, which could certainly provide some really welcome cash-flow support for businesses that have been impacted by the current crisis.”
Harper also commended the Budget’s $1 billion JobTrainer programme and the additional $1.2 billion to provide wage subsidies for 100,000 new apprentices and trainees, as well as the JobMaker Hiring Credits.
“We know how vital incentives like these are to ensure businesses can hire with confidence but, particularly with the impact of the pandemic likely to be felt for many months and potentially years to come, we’d like to see them continued for more than a year,” he said.
Harper also welcomed the $1.3 billion spending commitment for manufacturing.
He said the detail on how this would play out has not yet been made clear but it is hoped it will benefit the labels and packaging sector of the print industry.
Visual Connections’ president Mitchell Mulligan said the core announcements in the Budget will benefit the printing industry which is predominantly made up of SMEs.
“Initiatives such as the loss carry-back scheme to lessen the blow for many, instant asset write-off that will encourage business to invest for growth and efficiency along with the pay incentives to employ people, coupled with the continuation of JobKeeper until March 2021, will go some way to helping business survive and adapt to the new normal,” Mulligan said.
“So, too, will the economic effects of stimuluses such as the additional funding for manufacturing sector, bringing forward of infrastructure spending by the States, Territories and the Commonwealth road infrastructure program, along with PAYG tax cuts that will assist in filling the gap to consumers income.”
The Real Media Collective CEO Kellie Northwood described the Budget as strong and business focused and one that provides solid support to business into the recovery phase and a complementary follow-on from the already implemented economic stimulus this year.
“One of the biggest opportunities for members announced in this budget is the instant asset write off aimed at encouraging business investment,” Northwood said.
“This measure extends the asset write off concession implemented by government as part of its stimulus measures to support businesses to recover from the economic impacts of COVID-19, and were otherwise concluding at 31 December 2020.
“As announced, businesses with an aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible capital assets acquired by 31 December 2020 and first used or installed by 30 June 2021. The $150,000 threshold can cover multiple assets, including both new and second-hand purchases and will extend to the cost of improvements to existing eligible depreciable assets made in this period. It has been estimated that this measure will be available to around 3.5 million businesses.
“Apprenticeships and other intern and training employment options to support their businesses future skills growth is welcomed for our industry and will see ongoing support to training programs.”
From a Women in Print perspective, Northwood also commended the $240 million spending commitment for the economic security of women.
“This funding allocation recognises the well-reported concerns that women have been one of the hardest hit economically during this pandemic across Australia and the Women in Print and The Real Media Collective see this funding provision as critical to keep women in the workplace with access to training and professional development transitioning programs,” Northwood said.
PVCA CEO Andrew Macaulay also welcomed the provisions in the Budget.
“Print is a capital intensive industry. It is dependant on capital investment to maintain competition, productivity and efficiency. And the ability for printers to write-off the capital investment immediately is an excellent way to invest in more productive capacity,” he told Sprinter.
“It should be an exciting provision for some printers who have the capacity to do that. It will certainly make them more resilient to international competition for print business into Australia, which is a good thing. Combine that, with the ability to write-off losses for this year against the 2019 financial year profit, you’ll end up with a positive outcome as it absorbs some of the dramatic shocks of this year.”
Macaulay also made particular mention about the support for apprentices.
“The subsidy for apprentices of all ages is something that this industry has been calling for, for some time. I think that there are many printers who will be very relieved with this support,” he said.
“Some of them have already got apprentices and with some planning new hires, this provision will offset the new hires against existing payroll and it will assist in bringing in new and younger people into our industry, which is critically important.”
Ai Group CEO Innes Willox said the Budget is right for the times – stimulatory, inclusive, confidence-building and forward looking.
“Ai Group particularly welcomes the support the Government is providing to skills development and employment with its backing of 100,000 new apprenticeships and traineeships and the subsidy for employment of previously unemployed people aged under 35. These are measures targeted to younger Australians that we know from experience are among the most at risk in the wake of an economic downturn. The economic, social and human benefits of these measures are incalculable; they hold out a supporting hand to many young Australians,” Willox said.
“The new investment allowance that allows businesses with turnover below $5 billion to immediately expense the cost of capital equipment installed before July 2022 will provide a critical boost to investment, productivity and job creation. Without this measure the anticipated fall in non-mining business investment of 14.5% in 2020-21 would be much greater and the measure is a significant factor in the anticipated rise of 7.5% in non-mining business investment in the 2021-22 year.
“The tax loss carry-back measure available for businesses with turnovers of less than $5 billion will provide invaluable cash flow support for many businesses suffering from the current crisis. It will allow many to stay in business, keep employing people and invest for the future. The provisions will apply in relation to losses in the current and 2021-22 financial years.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell described the Budget as a blockbuster for business and “one for the history books”.
Carnell said the immediate write off of equipment purchases is a huge win for small business.
“In possibly the biggest win to come from this year’s budget, small businesses can now write-off the full value of assets purchased until 2022,” Carnell said.
“This gives small businesses time and certainty to plan to buy major equipment.
“It also significantly reduces the need for depreciation and cuts red tape.”
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