Budget boosts skills, instant asset write-off thresholds

Treasurer Josh Frydenberg has handed down his first Budget featuring a $525m investment in vocational education and training, support of 80,000 apprentices for trades in a skills shortage and an increase in the threshold for instant asset write-offs.

Under the plan employers will receive a total of $4000 in additional funding for each apprentice they take on. The new payments are broken down into $2000 at the commencement of the apprenticeship with a further $2000 at the end.

The funding covers the advanced manufacturing sector, which takes in printing and packaging. It is in addition to the existing standard employer incentive of $1500 at commencement and $2500 at completion of the apprenticeship.

Apprentices themselves will receive a total of $2000. The first $1000 will be paid after 12 months of the apprenticeship with a further $1000 at the end of the period.

The money will also be used to upgrade and modernise the VET sector in Australia, following a recommendation made by former NZ minister Steven Joyce who said sweeping changes needed to be made to the sector.

In other boosts for small to medium sized businesses, the budget has increased the threshold for instant tax write-offs to $30,000 and expanded access to this support to businesses with an annual turnover of less than $50m. A company tax rate cut to 25 per cent for SMES with an annual turnover of less than $50m has also been fast tracked.

The budget, the sixth for the current federal government, has also forecast a $7.1b surplus for the 2019-2020 financial year.

But with Wednesday marking the last sitting day before a likely federal election in May it remains to be seen whether the measures will be legislated.

Printing Industries Association of Australia chief executive officer Andrew Macaulay has welcomed the support for small business and skills.

“The government has heard our calls for greater investment in the skills needed by the printing and broader manufacturing industry. Both job seekers and business will benefit, including from the extra support directly to apprentices and the businesses that employ them,” Macaulay said.

‘The increase in employer incentives to hire apprentices is welcomed, this will provide relief to businesses in hiring and training new apprentices. 

“This investment in skills, combined with the increase in investment in infrastructure in both cities and regional communities, should deliver a meaningful and positive impact on productivity."

Macaulay also supported the instant asset write-off measure.

‘Small and growing printing businesses will be pleased at the increase in the instant asset write off to a $30,000 threshold, up from the current $20,000 and promised $25,000, and the news that more businesses will be eligible to use this incentive. Both the higher threshold and making the write off available to businesses with turnover up to $50 million, up from $10 million turnover, are strong responses to ongoing advocacy,” he said.

"Expanding the size and the accessibility of the write-off encourages businesses to invest, expand their markets and create more productive jobs by using improved equipment and technology.

“The Budget is an investment in lifting low productivity and encouraging business growth. The government has responded positively to some important industry and business needs.”

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