Tchamkertenian says, “There are simply no
measures such as corporate tax cuts, personal income tax cuts or measures to
significantly boost economic activity or measures aimed at reducing regulations
and compliance costs faced by small to medium sized printing businesses.”
The
budget has confirmed more cost pressures for business generally but
specifically for small to medium sized businesses are just weeks away with
increases in the compulsory superannuation to 9.25 per cent from 1 July 2013.
Tchamkertenian says the anticipated slowdown in economic growth during the next financial year
will not provide much comfort to printing businesses facing challenging
economic conditions, as printing businesses generally benefit from increased
rates of economic activity.
Consumption
expenditure, a key driver of activity for the printing industry, is forecast to
remain modest over the forward years.
Printing
businesses will benefit from lower projected inflation and moderate wage
increases. A slight projected rise in the unemployment rate should help those
printing businesses facing labour shortages by increasing the pool of labour
resources available for hire
Economic growth while remaining positive is forecast to slow down during
the financial year. Had the government embarked on deeper cuts to government
expenditure to help return the budget to surplus in a shorter timeframe,
economic growth may well have stalled given the projected modest increase in
household consumption and reduced growth in total business investments.
The anticipated slowdown in economic growth during the next financial
year will not provide much comfort to printing businesses facing challenging
economic conditions, as printing businesses generally benefit from increased
rates of economic activity.
Consumption expenditure, a key driver of activity for the printing
industry, is forecast to remain modest over the forward years. Printing
businesses will benefit from lower projected inflation and moderate wage
increases.
A slight projected rise in the unemployment rate should help those
printing businesses facing labour shortages by increasing the pool of labour resources available for hire.
The Government has also announced a modest $300m four year package to
help job seekers in their transition efforts to work. There should be both
direct and indirect benefits flowing from this measure to the printing industry
if, as expected, this results in increased workforce participation rates.
An opportunity exists for printing business to access workforce
development funding, on a co-contribution basis following the announcement of
the esablishment of the Skills Connect Fund and allocation of $45m funding
during the 2013-14financial year.
Tax measures such as the increase in the Medicare levy to partly help
fund the Disability Care initiativ; the deferral of income tax cuts that had
already been legislated by way of increasing the tax free threshold; and not
proceeding with the additional increase to family tax benefit will mean that
billions of dollars will be taken out of the economy, which in turn will have a
negative impact on the printing and associated industries.
Offsetting these measures are some modest policy initiatives such as
permitting welfare recipients to keep more of their income earned from
part-time work before their benefits are impacted. These measures should
provide a boost to consumption expenditure as lower income earners generally
tend to spend rather than save any additional income that they earn.
Modest funding for the establishment of the Alternative Pathways Program
is expected to deliver more flexible pathways for about 4000 apprenticeships in
trade or technical qualification in high demand industries facing skills
shortages.
While the printing industry continues to experience consolidation and
rationalisation which are helping to free up labour resources, skills shortages
do exist as manifested by continued interest and use of the 457 skilled visa
program.
The federal budget has delivered a double blow to the 457 visa program,
with the application fees almost doubling and a significant increase in
compliance
activity. The increase charges are forecast to raise $198m over four
years, and these additional costs will impact printing and associated
businesses that make use of the system.
Larger printing businesses or those looking at developing export markets
may benefit from the Government’s decision to make $7.8m available in grants
over five years for businesses vying to improve commercial links with the Asian
region. Further announced cuts to the Export Market Development Grants are not
consistent with the policy to encourage exports.
The Government also has announced measures that are forecast to raise
more than $4bn over the forward years and are aimed at protecting the corporate
tax base from attempts by multi-national entities to engage in profit shifting
and tax minimisation strategies. While
these measures are unlikely to have any noticeable impact on the printing
industry due to the small to medium sized nature of most operators, other
measures aimed at protecting the revenue base may. For example, providing more
resources to the ATO to crack down on misuse of Trusts, and moving companies with turnover of $100m or more to monthly PAYG installments
from January 1 2015; and companies with turnover of $20m or more to monthly
PAYG installments from January 1 2016. The latter measures may cause cash-flow
issues for printing and associated businesses who have poor cash flow management practices or face ongoing debtor issues.
Printing and associated businesses either active with or planning to
explore government services and tenders may welcome the modest $29.4m in assistance for small and medium
businesses. The funding to be provided over five years will allow SMEs to apply
to grants to help them overcome barriers and become more competitive when
bidding for government contracts.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
