COVID BUDGET: GOVT LAUNCHES $35BN BUSINESS BOOSTER
In the biggest business-boosting budget in Australia's history, federal treasurer Josh Frydenberg announced a $35bn programme designed to help beleaguered businesses, including printers, get back on their feet following the Covid pandemic.
Among a raft of measures the government is delivering, all printers will now be able to claim the full value of any investment in plant and equipment as an instant asset write-off. They will also be able to write off losses from last year, this year and next year back into previous profitable years. And, printers will have 50 per cent of the wages of apprentices paid, as well as a subsidy on the wages of other young people. Small business will also benefit from simplified GST, fringe benefit tax exemptions, many other cuts in red tape, and free mental health support.
However, the printing and packaging industries missed out on being one of the six manufacturing sectors named by the government in its $1.3bn special assistance package.
The 2020 Budget is the most extraordinary ever seen, with the conservative government ripping up its fiscal ideology under the sheer weight of economic devastation brought on by Covid. The national debt will nudge a trillion dollars as a result.
Andrew Macaulay, CEO of PVCA, hailed the government’s new fiscal policy as “a good budget for printers", calling the expansion of the assets write-off "terrific short-term news for printers."
All up, the government is spending $98bn to kickstart the economy, with the $26.7bn instant asset write-off the biggest part of that. Print businesses will benefit directly from the business-boosting aspect of the budget and will be hoping that the wider $98bn stimulus will see business and projects across the country turn to print.
Kellie Northwood, CEO at TRMC said: “Overall, the budget is one that provides solid support to businesses and industry, and for that we welcome it."
The government says the plan should deliver economic growth next year of 4.75 per cent, more than compensating for the expected 3.75 per cent fall this year. However, those figures are based on a vaccine being widely available next year, with national and international borders being re-opened as a result, but a successful vaccine is far from certain.
The instant asset write-off will provide what Josh Frydenberg says will be a "game changing" financial stimulus. For printers, it means that any piece of equipment available is now able to be 100 per cent written off this financial year, and the next one.
The carry-back losses plan will cost $4.9bn and will mean that losses which could normally only be carried forward against future profits can now be claimed against past profits, with Frydenberg saying, "These are not normal times".
All Australian print business will be able to apply for carry-backs for losses accrued in 2019-20, 2020-21, and 2021-22. Frydenberg said: "In order to keep their workers businesses need our help now. They cannot wait for years for the tax system to catch up. Companies that have been doing it tough through the crisis will be able to use their losses earlier."
Peter Harper, CEO at print industry suppliers Visual Connections, said, "The tax loss carry-back measures for businesses could certainly provide some really welcome cash-flow support for businesses ."
New apprentices taken on by printers will have half their wages up to $7000 a quarter paid by the government. For young workers newly employed aged between 16 and 30, printers will receive a $200-a-week subsidy and a $100-a-week subsidy for those aged between 30 and 35. JobKeeper will remain in place until March, on its reducing rate.
Small business owners will also be able to receive "free, tailored and accessible" mental health support, through the Beyond Blue NewAccess programme, which is receiving a significant boost in funding.