Are you happy with the 2020 Federal Budget?
After COVID-19 caused months of delays, the Federal Budget has finally been released for 2020.
In a year of social, emotional and financial turmoil for many of us, we were eagerly awaiting the possibility of some extra support.
For small businesses, this is what was released:
Businesses with a turnover of less than $5bn – all but the top 1% – will be able to deduct the full cost of capital assets purchased after budget night and first used or installed by 30 June 2022.
Small and medium businesses will also be able to apply “full expensing” to second-hand assets; businesses earning $50m to $500m will be able to do so for assets of less than $150,000.
Companies with turnover up to $5bn will be able to offset losses against previous profits on which tax has been paid, to generate a refund.
Exempting from the 47% fringe benefits tax employer-provided retraining activities to employees who are redeployed to a different role in the business.
$4.5bn investment in NBN Co and $29.2m to accelerate the rollout of the 5G network.
Are you happy with the Budget? Is there anything missing? Would love to hear your thoughts on how it affects your business.
Find the full summary of the recent Budget here: https://www.theguardian.com/australia-news/2020/oct/06/summary-australia-federal-budget-2020-key-points-taxes-jobs-welfare-education-health-business
In a word, hell no. I have not seen any meaningful funding for healthcare, family assistance, small business assistance (the kind that is really needed now to save many of them), even if we do come up with a great vaccine, it will cost a LOT to get it out, I do not see that in the budget either. I do see where bailouts can exist and I see reinforcement of tax incentives to the wealthy and large companies. This is all backwards. If this is yet another attempt at trickle down economics, let me state forcefully, IT DOES NOT WORK. he only thing that will work is to fund needed projects from the bottom up. Get the average person back working on something, let's provide meaningful help for families and small businesses. It's called trickle up economy, and it has been proven to work over and over.. Saadly, I have no great expectations..
The message I took away from the budget was that it was all about creating jobs, and whilst I do believe it will create jobs, I'm not sure if it was the best response for fast job creation.
The instant asset writeoff and tax decreases should have some immediate impact on spending which wil l hopefully flow through to small business and create vacancies for jobs. Some of the other initiatives however, seem to be more slow-burner projects, and I would have personally gone for some quick wins that offered dual benefits.
Here's where I would have liked some of the budget money to be spent (in my totally unqualified opinion):
- Forget expanding gas and put the money into a subsidised home solar scheme, similar to what they did with the home insulation scheme. I acknowledge that didn't get managed or end well, but the effect was immediate, it created jobs and made homes became more energy efficient.
- Spend less on infrastucture (not because it isn't needed, but takes longer to get going) and move some of those dollars into social housing. Gets commercial construction going with thousands of jobs whilst improving the lives of the most vulnerable.
- Digital business spending. $800 million sounds like a lot, but most of that is going into the governments own services. Most small businesses I deal with are screaming for help in getting up to speed with digital business. I would have preferred a larger proportion going to small business to help with a speedy transition to digitisation which stimulates purchases and services, and makes Australia more competitive on an international scale.