Print companies are responding positively to the 2016 federal budget, which will see small to medium businesses profit from lower tax rates.
The budget, which was announced to the country yesterday, will see small business tax rates lowered by 1 per cent to 27.5 per cent, and then to 25 per cent within a decade.
Further advantages for small to medium printers include the turnover threshold for small businesses increase from $2m to $10m giving access to tax incentives, and unincorporated tax discount increased up to eight per cent for businesses with turnover below $5m.
ProPrint spoke to a number of printers sharing a common opinion on the budget’s subsidy to smaller businesses, many asserting the changes will reap substantial profit.
Peter Wolff, owner of Sydney business Wolff Print says the budget will give small printers the ability to invest money saved from the tax cuts into staff and equipment, and will ease the stranglehold of printing giants.
“It’s a really great incentive which gives businesses more cash which isn’t tied up in taxes, and it will have a positive domino effect on the industry,” says Wolff.
“If you look at it this way, a business making $10m profit will get $100,000 from the lower rate, and that could mean hiring one or two extra staff. If you make $1m, the $10,000 could mean an investment in another machine or a bigger machine.”
[Related: 2015 budget boosts small printers]
Managing director for Perth’s Scott Print Dudley Scott told ProPrint the lower rate will help in the long run, but says the Australian government is ‘miles behind’ other countries such as NZ.
“Company tax needs to go down to 25 per cent if it is going to make a real difference,” says Scott.
“The government doesn’t have a revenue problem it has a spending problem,” he adds.
Imagination Graphics owner Emmanuel Buhagiar says the Turnbull government has been ‘good for our business and businesses in general’ and agrees the budget benefits small to medium printers.
“We’ve been travelling along very well since this government came into power,” says Buhagiar.
Other budget restructures affecting businesses include an upfront payment of $1000 to businesses when taking on an intern, and from July 1 the increase to instant write-off for equipment purchases will be extended until June 30, 2017 to businesses with a turnover less than $10m.
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