Small businesses across Australia will help drive the country out of recession and through the COVID-recovery through a wide range of measures set out by Treasurer Josh Frydenberg in the Federal Budget on Tuesday night.
Measures including tax relief, apprentice subsidies and manufacturing grants are all part of the massive Government investment, which is aimed at aiding Australia’s recovery from recession. The economy has continued to shrink during the COVID-19 pandemic and the Government has indicated its intention to spend its way out of trouble, with gross debt to hit $1.138 trillion by 2024.
At the heart of the Treasurer’s Budget is almost $98 billion in business and personal tax relief measures which Frydenberg said are designed to create 950,000 jobs over the next four years, returning the economy to health.
Businesses across the hospitality industry will immediately be able to write-off, in full, any depreciable asset and there is no limit on value. These assets are the same as those already listed under the Government’s existing depreciation schedule, and do not include buildings.
Only companies with a turnover of over $5bn will not qualify for the extended asset write-off.
Businesses that were previously profitable, but are now making losses as a result of the pandemic are also in line for immediate help through $4.9bn in loss carry-back provisions. This means that businesses, again with a turnover of less than $5bn, are able to write-off losses incurred this year and through until June 2022, against profits made during, or after, 2018-19.
Experts have suggested this measure will deliver a government funded cash flow injection to hundreds of thousands of loss-making companies in hospitality, tourism and education.
The Treasurer called this measure a “game changer” saying “it will unlock investment, it will dramatically expand the productive capacity of the nation and create tens of thousands of jobs”.
Food and beverage manufacturing was highlighted by the Treasurer as one of six pillars on manufacturing that will be able to create jobs, with $1.5bn in grants to boost investment and production.
In his Budget speech last night Frydenberg said: “COVID-19 has resulted in the most severe global economic crisis since the Great Depression.”
He added: “There is no economic recovery without a jobs recovery. There is no budget recovery without a jobs recovery. This budget is all about jobs.
“Starting tonight there will be a new JobMaker hiring credit to encourage businesses to hire younger Australians. The JobMaker hiring credit will be payable for up to 12 months and immediately available to employers who hire those on JobSeeker aged 16 to 35.
“It will be paid at the rate of $200 per week for those aged under 30, and $100 per week for those aged between 30 and 35. New hires must work for at least 20 hours a week. All businesses other than the major banks will be eligible.”
The Treasurer also said the Government was committing an additional $1.2bn to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them.
The Budget has been largely welcomed across the liquor and hospitality industry, click here to see how the industry has reacted.