Two of the shining stars of the federal Budget – the $26.7 billion scheme enabling the uncapped and immediate expensing of eligible capital assets for businesses earning $5 billion a year or under – and the loss carry-back initiative have been welcomed by industry.
The dust has now settled on last week’s blockbuster Budget which delivered some major gains for business with high hopes these measures will spur investment and drive the economy out of its COVID-induced recession.
The expanded instant asset write-off scheme is designed to encourage businesses to invest in new plant and equipment to keep the economy moving and also set up business for the future. It also includes the costs of improvements to existing eligible assets.
The loss carry-back scheme allows companies trading at a loss due to COVID to offset those losses against profits in recent previous years.
For print businesses looking to invest, these initiatives mean they can claim a tax deduction for the full value of a purchase after its use, rather than claim depreciation over several years, and the sky is the limit when it comes to purchase value.
Cactus Imaging founder and general manager of operations Keith Ferrel said the initiatives were unbelievable and very attractive.
“Companies that have taken a fair battering over the last couple of quarters can now write off their losses on previous profits is a huge benefit. That is basically getting a refund from a loss as against previous profits which is pretty incredible,” Ferrel told Sprinter.
“Outdoor for example has had a huge growth spurt and has been turning profits but there is no doubt it has taken a hit in the last couple of quarters so that will be a big help to some businesses.
“On the capex side of things I am sure it will get a few people rethinking about what they are going to be doing as far as spending is concerned. But there is a lot that aren’t going to be in that position if they have lost a lot of work.
“But for those looking at investing, I think it would really make these businesses re-evaluate what they are doing going forward.”
EcoLease director Marian Taggart-Holland said the expanded asset write-off scheme, which applies to capital expenditure of any amount, combined with the loss carry-back scheme makes good business sense for the right businesses.
“If you buy a printing press for a million dollars you can write that off i
n this financial year or in the financial year that you purchase it,” Taggart-Holland told Sprinter.
“The other part of it is you can combine it with the loss carry-back initiative. The combination is really extremely beneficial as business owners will get cash refunded to them if they made a profit up to the 2019 year.”
Suppliers welcome Budget schemes
The initiatives have been designed to free up cash flow for business to help them return to normal, keep the wheels of the economy turning and Australians employed. A number of suppliers have welcomed the initiative and hope it gives business owners the room and confidence to consider where they would like to take their businesses in the future.
HP Australia & New Zealand managing director Mike Boyle said the measure has come at the right time for business owners.
“The past year has showcased the importance of technology in keeping us connected and unlocking growth in business and individuals alike,” Boyle told Sprinter.
“In the print industry, technology has a huge role to play in equipping businesses with the right tools to adapt to changing demands, particularly as we continue to see a rise in personalisation and on-demand printing.
“HP welcomes the government’s instant asset write off commitment released in the federal Budget.
“We believe this investment will support the industry and offers Australian printers the opportunity to invest in the future of their business and enable greater access to tools that can help bolster their own digitsation journey and support local supply chains.”
Konica Minolta general manager of production and industrial print Sue Threlfo said the expanded asset write-off provision and the loss-carry back scheme will help restore confidence.
“I was pleased to see the Budget included some good initiatives for printers to invest, to ensure their business in the best shape to come out of the COVID-19 slowdown,” Threlfo told Sprinter.
“Many companies have had to put important purchasing decisions on hold since March, and the extension of the instant asset write off gives them time to revaluate their needs.
“The additional tax write-offs and wage subsidies will also potentially bolster cash flow and encourage hiring of younger people into our industry.”
Epson business marketing manager Gordon Kerr said the new provisions will allow signage and print business owners the opportunity to upgrade and improve their offer to help them win more business.
“This is a very welcome move by the federal government,” Kerr said.
“It is clear that product vendors and retailers are all looking to restart business. Everyone wants to re-engage with customers and re-energise consumption. They want to do this quickly and efficiently. The programs that have been put in place give signage and print companies opportunity to upgrade and improve their offering to meet this demand.
“With appropriate investment they can be more flexible, offer a better product and deliver it more quickly, while also constraining production costs.”
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