Because Budgets bore most people, here is a short summary for our industry on how you can be a winner from last nights’ Federal Budget.
Purchase an Asset to invest in your business
All businesses with a turnover <$2,000,000 per year now (as of last night) have access to an instant Asset write down of $20,000 on the purchase of every Asset that helps improve the productivity of your business. You can write down the full cost against your profits this year if purchased before the end of this financial year.
Some Products that we believe fit this criteria for our customers are shown in the below advertisements. These include:
Attachments. We have a full range of attachments, and now is the perfect time to buy attachments to add to your machine fleet. A broader range of buckets such as sieve buckets, tilting buckets or more GP/Rock buckets can help you win jobs. A new Rock breaker can improve your productivity. Compaction plates, compaction wheels, rippers, and Simex products such as Rotary Cutters, profilers and asphalt layers are all available within the $20,000 limit.
Machinery, new or used
If you are buying a new machine over $20,000, buy your Quick Hitch, Buckets and other attachments SEPARATELY from your machine through a separate supplier (RD Williams), and the hitch and buckets can be instantly written off instead of over several years.
Of course parts we supply for repairs to your machine can be written off instantly as in the past, so fixing your machine now before the end of the financial year still makes sense.
As always, we are not tax advisers, and we suggest you obtain your own advice based on your circumstances prior to any tax related purchases.
Impact on our Industry
There is further positive impact on our Industry in this Budget. There is tax relief for small businesses through reduced taxation (28.5% down from 30% for incorporated businesses, and a 5% tax reduction for all other businesses with turnovers less than $2M) which should help many of our valued customers.
Investment in Northern Australia will also benefit, with the establishment of a fund of $5 billion for loans to private enterprise to build major projects such as rail lines, ports, electricity and pipe lines. There is a further $300 million in drought assistance for farmers. Both these initiatives should stimulate projects and investment, and in turn improve business confidence overall.
Verdict on the Budget overall
Not that I think our Governments read our newsletters, but it was great to see that last nights’ Federal Budget took up some of the ideas we’ve discussed over the last year. Anyone who cared long term for Australia’s future knows that the problem for the Budget was always going to be how to address the fact we’re still spending more than we collect in taxes. The challenge is more specifically to get any of these changes through an obstructionist Senate who block even ideas they themselves suggested in the past.
It has a friendly bent towards small businesses and families, and a hostile bent towards tax dodgers (corporate or welfare). Things such as the ever escalating bureaucracies are also left largely un-addressed, except for the slashing of 35 Government bodies (most of which I doubt anyone could name, let alone will miss) and a slight trimming of $244 million in Education and Health Department administration budgets. The hard decisions have been left alone, like the fact that our Welfare Budget will still rise over 20% between now and 2018-19. Whilst the GDP growth forecasts have been brought back closer to reality, they are still on the optimistic side unless things such as Industrial Relations and Tax reform are addressed. This Budget has only nibbled away at the deficit and it would be hard to argue against the clampdown on expenditure and tax avoidance, so the measures should be passed.
All up though, it is more positive than negative. The economy needed a bitter medicine to recover quickly and cure the problem, but the electorate and media can only stomach a mild vanilla flavoured one that will mask the symptoms but not provide a cure. So that is what we got.
As always, onwards and upwards!