COVID BUDGET: AUSTRALIAN PRINT INDUSTRY REACTION
Industry response to the 2020 budget is mixed, with some hailing the measures as good for the print industry, others more cautious, and some lamenting what they said were missed opportunities.
Andrew Macaulay, CEO of PVCA, hailed the government’s new fiscal policy as “a good budget for printers”, while Kellie Northwood, CEO of The Real Media Collective, welcomed it, saying it “provides solid support to businesses and industry", Peter Haper, CEO of suppliers association Visual Connections said, "The tax loss carry-back measures for businesses could certainly provide some really welcome cash-flow support."
Peter Orel, CEO at Finsbury Green, said: “It is very promising and stimulating. There are some great things in there.” Rodney Frost, CEO at Lamson Paragon Group, said: “It will help printers get back on their feet. Being able to offset current losses against previous years will really help, as will the extension to the instant asset write off.”
Richard Celarc, CEO at Opus Group, said, “The apprenticeship subsidy is good, but it is only for a year; there is no subsidy for older workers, who we also like to hire, and while the relaxation in limits on capex is good it doesn’t change the fact that printing equipment is high-cost.”
Macaulay said: “Wage and apprentice subsidies provided in the new JobMaker package are a boon for SMEs facing a risky, unpredictable, and still volatile market. The apprentice employment subsidies may fill a much-needed weakness in filling print training roles that the PVCA has been highlighting to government for some time.
“The ability for printers to offset 2020 to June 2022 losses against 2018/19 profits is welcome relief. Supporting mental health is critical and welcome. PVCA has seen significant use of our 1800 mental health line provided all print and packaging industry, and the trend lines show this anonymised traffic increasing.
“The expansion of assets write-off is terrific short-term news for printers, who run highly capital-intensive operations. Where this flows into investment in new presses and plant, our industry will also see increased productivity and efficiency, helping make Australian print more resilient to international competition.”
Kellie Northwood at TRMC said: “Overall, the budget is one that provides solid support to businesses and industry, and for that we welcome it, as ongoing support from the already implemented economic stimulus this year from federal government.
“The dual point benefits are well-regarded – for those businesses who have the capability to invest this could see a strong opportunity for the equipment and other supply manufacturers across the country, as well as businesses able to upgrade and invest in their capabilities through the access to 100 per cent write-off. However, we are reviewing the asset cost threshold which may impact our industry negatively, given the high cost of larges press or other equipment purchases.
“On the other hand, those unable to invest, given the challenging year, can also benefit to rebuild with the loss carry back from previous years, as well as continue apprenticeships and other intern employment options to support their businesses.
“There are many details in this budget from thresholds to employment hours and more, we are analysing and briefing with our team and industry partners today and will release a Budget Report specific to our Member’s needs and businesses tomorrow via our usual communication Bulletins,” Northwood said.
Peter Harper said, “Given our own very strong focus on attracting, training and retaining young people in our industry, we are encouraged by the focus on young people and training through the $1bn JobTrainer program, $1.2bn to provide wage subsidies for 100,000 new apprentice and traineeships and the JobMaker Hiring Credits.
“We know how vital incentives like these are to ensure businesses can hire with confidence but, particularly with the impact of the pandemic likely to be felt for many months and potentially years to come, we’d like to see them continued for more than a year.”
Mitch Mulligan, president of Visual Connections said, "“I would say that the core announcements made last night are welcomed by our industry, who are predominantly SMEs."
Richard Rasmussen, CEO of industry financiers and business brokers Ascent Partners, was more sanguine in his assessment. He said: “The instant asset write-off is a great idea, but if you are a print business with a 30 per cent drop in sales this year, which many are, it is unlikely you are going to be going out and buying new equipment. Similarly, with the young person wage supplement, most printers will be looking to shed staff once JobKeeper ends, rather than taking on new people.”
“I would also have wanted print and packaging to be included in the $1.3bn programme to help existing manufacturers, and I would also have wanted much more clarity on the chapter 11 insolvency laws due to come into place in 1 January.
“Overall, I’m not sure how much this budget will actually help the print industry in its current depressed state, I do think it is unlikely that when Covid is over print will return to its pre-pandemic levels.”
Kate Carnell, small business ombudsman said, “Given the number of measures that target the small business sector in this budget, the federal government has clearly acknowledged the role small and family businesses have to play in the nation’s economic recovery. In possibly the biggest win to come from this year’s budget, small businesses can now write-off the full value of assets purchased until 2022.”
However, Carnell said the government had missed an opportunity to help small business struggling with their own viability. “Small businesses need access to an accredited professional adviser to judge the viability of their business now, so they can make an informed decision about the future of their business and actually do something about it,” Carnell said.
She also blasted the government for not establishing a clear Australia first procurement policy. “The government missed a golden opportunity to commit to prioritising small businesses when procuring work. It’s disappointing because Australian small businesses should have a larger slice of the pie,” Carnell said.
Macaulay joined those business leaders lambasting the WA and Victoria state premiers for their Covid policies. “The success of these measures will depend on consumer and business confidence returning," he said. "An element of return of commercial confidence is dependent on state governments, particularly Victoria and Western Australia, ceasing to interfere with trade and movement between and within the states."