Budget 2020: What’s in it for business

The Guild and former pharmacist and mental health advocate Kate Carnell have lauded the 2020 Budget for its focus on helping small business recover from COVID-19

In handing down the Budget on Tuesday night, Treasurer Josh Frydenberg told Parliament that the Instant Asset Write Off would be expanded, with businesses with a turnover of up to $5 billion now included until June 2022.

Mr Frydenberg said that this was “a game changer and it will unlock investment”.

Writing in Guild newsletter Forefront, the Pharmacy Guild of Australia’s national executive director Suzanne Greenwood wrote that, “Small business community pharmacies will also benefit from the significant expansion of the Instant Asset Write Off, to allow the full value of any eligible asset purchased by virtually any business to be written off immediately”.

“As the Treasurer said, this is a game-changer which will encourage investment just when the economy and the community need it.”

However CPA Australia warned that many smaller businesses would not be in a position to take advantage of the measure.

The Treasurer noted that “COVID-19 has turned fundamentally sound businesses into loss making businesses” and announced that companies which have been “doing it tough” through the pandemic will be able to use their losses earlier.

“Losses incurred to June 2022 can be offset against prior profits made in or after the 2018‑19 financial year,” he said.

“The combination of the immediate expensing and loss carry-back measures will create an additional 50,000 jobs across the country.”

Mr Frydenberg said that there would be no economic recovery from the pandemic crisis “without a jobs recovery”.

The Government says that a key measure for the employment, skills and small business portfolio is the creation of the JobMaker Hiring Credit.

This credit will be payable for up to 12 months for each new job, and is available from Wednesday, 7 October 2020 to employers who hire eligible employees aged 16 to 35.

The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16 and 29, and $100 per week for those aged between 30 and 35. Eligible employees will be required to work a minimum of 20 hours per week.

To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created.

Suzanne Greenwood said that, “As small businesses, Australia’s 5,800 community pharmacies will welcome the JobMaker hiring credit”.

“We also support the establishment of a JobTrainer fund, which is intended to support job seekers, school leavers and other young people to remain engaged and have the opportunity to acquire the training and skills that will help them get a job.”

The Government will also invest more than $26.2 million to enable small businesses to access digital technology.

The measures to support small and family business include:

  • $19.2 million to encourage and support small businesses to digitise, which the Government says will give more small businesses access to expert advice to help them make the most of the digital economy and take up emerging opportunities in the COVID-19 business environment.
  • $7 million to help provide business and mental health support for small business owners who are under increased financial and emotional pressure during the COVID-19 pandemic.

Former pharmacist, former BeyondBlue CEO and Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the $4.26 million budget commitment to rolling out a new mental health program for small business owners.

The NewAccess for Small Business service will provide small business owners with access to free one-on-one telehealth sessions with specially trained mental health coaches. The service is expected to commence early next year.

“Mental health is proving to be the next big challenge to emerge from the COVID crisis and it is particularly impacting the small business community,” Ms Carnell said.

“There has never been a tougher time to be in business. Small business owners are struggling to stay afloat and keep their staff employed throughout this difficult period.

“Small business loans are often secured against the family home, so if they lose their business they could lose their home. It means the stakes are incredibly high and that is understandably taking a huge toll on small business owners’ mental health.”

Ms Greenwood wrote that “The headlines for this Budget were always going to be about eye-watering deficit and debt numbers, but when we look at the detail we see cause for optimism about the prospects of a gradual economic and social recovery”.

The Council of Small Business Organisations Australia also welcomed the Budget measures targeting the sector.

COSBOA CEO Peter Strong said “this is the budget we needed to have, with some great things in it for small business owners.”

He welcomed measures including the expansion of the instant asset write-off as well as further spending on JobKeeper and the JobMaker Hiring Credit.

However, he also warned that, “rent assistance for small business is needed, and this is one thing we are disappointed about in the budget”.

“COSBOA is recommending the Canadian Model, which involves the Government paying a businesses’ remaining rent as a forgivable loan to its landlords. We should of course investigate whether it is suitable for the Australian market.”

In a statement, the Pharmacy Guild did note that the Government retained the optional $1 discount on PBS patient co-payments, funded by community pharmacies.

“The Guild maintains the view that there are more effective and more equitable ways to improve the affordability of PBS medicines, and we will continue to advocate for alternative policy options to replace this discount which benefits only a minority of patients.”

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