The Federal Government has delivered its 2021 budget, announcing a number of incentives for businesses and individuals. The associations relevant to the print industry have weighed in on the announcements, saying that while they are welcome, they don’t fully address the industry’s long-term needs.
Print & Visual Communication Association president Walter Kuhn said the budget does deal with some good initiatives for small to medium business – which a large majority of the print industry is made up of – but what it doesn’t address is the security of the economy going forward.
“This is because without adequate quarantine, we are always open to lockdowns. As we are majority reliant on tourism and hospitality and the retail sectors, these lockdowns have a major impact on us as an industry,” he said.
“So, until the government can secure some form of a proper quarantine system to stop the virus getting in here then this will continue to have a major impact on industry which is our major customer base.”
With regards to superannuation changes, which now mean that employees earning under $450 a month must be paid compulsory super, Kuhn said this would result in employers possibly having to pay more super if they contract more casuals.
“As an employer, you are going to have pay more super as the minimum is now $200 a month. So, if you are employing a lot of casuals, that is going to add a lot more paperwork to your business as well as impact profits,” he said.
“But it is good for the employee and the employer because at the end of the day, if you don’t have employees you don’t have a business so it is hand-in-hand in that respect.”
Kuhn also said the investment into training is welcome, but the support for instant asset write off may not be as effective as it would be with industry security.
“They have put money into training and apprentices, but again, without industry security going forward, it is hard to invest and take up the instant asset write off; that is a concern in itself,” he said.
“Overall, the budget looks good but if you dig deep into it, our main concern economy buoyancy, and it will only stay buoyant from print’s point of view when these sectors are booming,” he said.
“If there are no guarantees that the economy is going to keep going strongly, people will be unlikely to invest due to the unknowns moving forward because the government has not put steps in place to ensure we have adequate quarantine.”
The Real Media Collective general manager of industry relations, policy and governance Charles Watson said the 2021 budget is not one of austerity.
“The government has stated this budget is all about targeted assistance for economic recovery. It contains big spending on national infrastructure projects, research, welfare and other measures all aimed at driving down unemployment below the targeted five per cent,” he said.
“Significant government expenditure on purposeful infrastructure programs is not an original idea and has historically been the go-to for governments to move out of and beyond recession type conditions. Generally, such an approach has positive outcomes and that flow through to the rest of the economy.”
Watson said the government’s use of generous fiscal policy measures to repair and grow the economy is a necessary path to be travelled for the medium-term.
“It is more Keynesian and less Friedman in its approach, but given the economic circumstances of Australia and the rest of the world it appears to be appropriate. Overall, this budget is not perfect and it won’t satisfy the desires of every sector, but it is encouraging and builds on what was implemented in 2020,” he said.
On the effects of the budget for the print industry, Watson said although there is nothing in this year’s Federal budget that is specifically targeted at our industry, some general incentives apply.
“Variable business tax concessions, concessions for investment, the potential for work to flow through from targeted industry areas within the budget, continued incentives for taking on apprentices and trainees, along with the extension of the asset write off scheme from last year are likely to bring benefit to our industry,” he said.
“Given the significant capital expenditure required for operating in our industry, TRMC made various representations to government highlighting the benefit of last year’s asset write off and loss carry back measures.
“The extension of those measures in this budget will continue to give our industry an opportunity to focus on upgrading their operational capabilities and potential moving forward. We say this will assist in our aim to ensure as production as possible stays onshore now and into the future.
“In addition, SMEs will certainly benefit from the reduction in company tax rates, down from 30 per cent to 25 per cent as of 1July this year.”
Visual Connections CEO Peter Harper said while economic recovery will clearly continue to be impacted by a lack of international travel and migration, there is welcome news in the budget, most notably in the areas of business support, investment incentives and training.
“There are big tax cuts for individuals and a number of significant supports for businesses, all designed to increase spending and boost jobs,” Harper said.
With PacPrint coming up in September, Harper said the extension of the business asset write off is particularly welcome, with more than 99 per cent of businesses able to continue to write off the full value of eligible assets.
“This scheme will provide much-needed support for business owners as they seek to refocus and rebuild in a post-COVID market – in fact, its impact has already been evident in the levels of business investment over the past few months,” he mentioned.
Coming on top of an extension to the ‘loss carry-back’ that allows eligible companies to use tax losses from the 2022/23 income year to offset previously taxed profits as far back as the 2018/19 financial year when they lodge their tax return, Harper said this will encourage visitors to the Melbourne expo in September to make vital investment decisions.
“Support for SMEs, which represent such a huge part of our industry, is also welcome news,” he added, citing an extension to the small business loan scheme, corporate tax rate cuts, and a broadening of the scope of the Administrative Appeals Tribunal as measures which will provide some relief to the many businesses who still need time to recover from pandemic losses.
“Support for specific sectors like aviation and tourism, health services, medical and biotech services, beverages, games and others should also provide flow-on work to the print and graphic communications sector, which is positive,” he said.
“Finally, we also welcome the increase in the Government’s commitment to JobTrainer, which will support more than 450,000 new places to upskill job seekers, young people and apprentices.”
Ai Group chief executive Innes Willox said from an industry perspective, the government’s second budget in a year locks in the recovery from recession and shifts gears from emergency measures to investing in the economy for the longer term.
“The significant investments in skills and training, alongside the focus on social spending including on aged care and the NDIS, make this a forward-looking budget. The budget makes a substantial investment in the JobTrainer Fund; significantly expands the Boosting Apprenticeship Commencements wage subsidy; lifts Commonwealth funding for pre-schooling; increases funding for short courses; and offers substantial resourcing of reforms to skills development including to improve the responsiveness of training to industry and employer needs,” he said.
“These measures will over time help people move into higher paying jobs, assist in addressing rapidly growing skill shortages; and, over coming years, will be critical to lifting our lagging productivity growth.”
The Ai Group also welcomed other initiatives put forth by the government, with Willox saying a key to building on these measures and promoting further growth and opportunities is the reopening of the economy.
“Greater efforts should be made to develop and stick to a more ambitious plan to reopen our borders to migration and trade in services to drive our economic recovery,” he mentioned.
“Ai Group supports the broad budget strategy of using fiscal policy to maintain the growth of activity and employment. While the economy has recovered more rapidly than expected, unemployment and underemployment remain too high and with inflation relatively low, we welcome the further fiscal stimulus including through extra income tax relief, the additional infrastructure spending and the extension of a number of stimulus measures.
“The budget anticipates a period of steady expansion and strong employment growth without creating undue inflation and overall wages pressure. The outlook for business investment is expected to take some time to recover with most of the increase anticipated in the budget held over until 2022-23.”
He also addressed the emphasis on education, training and skills development, saying it is positive and necessary.
“Momentum on developing our workforce skills will need to be complemented with more decisive measures to lift business investment and the pace of innovation. These are the fundamental drivers of productivity and ultimately of sustainable improvements in real incomes,” Willox added.
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