Budget 2021: Reaction mixed on recovery budget
Industry reaction to Josh Frydenberg’s 2021 budget was mixed, with some disappointment and some encouragement drawn from the pump priming announcements.
Peter Harper, CEO of supplier association Visual Connections, says that, while economic recovery will clearly continue to be impacted by a lack of international travel and migration, there is welcome news in last night’s 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 today.
Walter Kuhn, president of Print & Visual Communication Association characterised it as doing little for print in not addressing the Covid-impacted retail, hospitality and tourism sectors, which are major print buyers, nor mandating a print in Australia policy for government.
Charles Watson, GM at The Real Media Collective said it was encouraging, building on the previous budget, and said while there was nothing specific for print the range of measures would be welcome by the industry.
Kuhn said, “It’s a budget we were expecting. It does not address the underlying issues. With no quarantine facilities for instance tourism will continue to be hamstrung, which will impact on print. We are disappointed that the treasurer did nothing to stop Australian taxpayer funded print jobs being sent to China. Print is the biggest manufacturing industry in the country, and got no support. We saw plenty of backing for the future digital economy, and that’s fair enough, but the government should have remembered about the present economy too.”
The extension of the instant asset write-off scheme was welcomed by Kuhn, but he said, “If there's little demand for print, there will be little demand for new equipment. Printers need customers, and if the country and various states are continually going into lockdown those customers are not spending. The government needs to get on top of the pandemic and the vaccination programme, so that business has security and confidence going forward.
“And no extra money for TAFE is also disappointing.”
Charles Watson, general manager for IR and Policy at the Real Media Collective viewed the budget more favourably. He said, “Although there is nothing in this year’s federal budget that is specifically targeted at our industry, we are not alone. However, 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.
“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 much production as possible stays onshore now and into the future.
“SME’s will certainly benefit from the reduction in company tax rates, down from 30 per cent to 25 per cent as of the 1 July this year.
“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.”
With PacPrint coming up in September, Peter Harper says 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.
He said, “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.”
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 says this is sure to encourage visitors to the Melbourne expo in September to make vital investment decisions. he said, “Support for SMEs, which represent such a huge part of our industry, is also welcome news,” he adds, 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 added.
“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.”
The Australian Chamber of Commerce and Industry said that the business investment, productivity and participation measures announced in the 2021-2022 budget “will be crucial as we transition our economy from being stimulus-reliant to market driven growth.”
Jenny Lambert, acting CEO of the ACCI, said “Incentives to increase workforce participation, promote business investment and boost productivity, crucial pillars of economic success, are the standout wins for business in tonight’s budget.
“With widespread skills and labour shortages as a result of the prolonged international border closure, and decreased labour mobility, businesses desperately need government investment in skills and to help unemployed people into work.”
The ACCI welcomed the $2.7bn extra for apprenticeship support. “It’s good news that the Commonwealth Government has extended the highly successful Boosting Apprenticeship Commencements program by an extra six months, maintaining its 50 per cent subsidy level. It has been popular, with places in the initial round taken up six months quicker than expected, creating tens of thousands of new job and training opportunities,” Lambert said.
Commenting on the productivity measures, include supporting business investment through temporary full expensing, and temporary loss carry back, now both extended till 2023, a new Patent Box initiative, and the Digital Economy Strategy, Lambert said, “These measures are a good start to overhauling how we do business and ensure Australia remains competitive. The Patent Box scheme is an exciting development and we hope it leads to more collaboration between research facilities and industry.
“These incentives alone won’t be enough to secure our economic success. We are a middle-sized country and rely on open borders – we need to address our international border restrictions by gradually reopening international travel, and also work towards a bigger Australia.”
Ai Group CEO Ines 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.”
Like the ACCI, the Ai Group is pushing for opening of borders, Willox said, “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."