The 2020 Federal Budget intends to jump-start the economy, mainly through tax and business incentives – good news for VACC members.
Understanding the incentives available and how they apply to each business is a challenge. VACC has provided a brief overview of four key takeaways and encourages members to discuss their options and eligibility with their accountant.
Key points
- The Extension of the Instant Asset Write-off program
- Loss Carry-Back Provisions
- JobMaker Hiring Credit
- Boosting apprenticeship commencements.
Extension of the Instant Asset Write-off program
Government is extending the instant asset write-off that had already been expanded until the end of December as part of its COVID-19 response. Businesses with turnover of up to $500 million can instantly write-off multiple assets worth up to $150,000 each. Now businesses have until 30 June 2020, to first use or install assets purchased by the end of this year.
The new extension to the Instant Asset write-off program is a big win for industry, following VACC lobbying.
Loss-Carry Back Provisions
To help boost business cash flows, government will allow businesses with turnover of up to $5 billion to offset losses incurred up to 2021/22 against previous profits made in or after 2018/19. Eligible companies may elect to receive a tax refund when they lodge their 2020/21 and 2021/22 tax returns.
JobMaker Hiring Credit
Job Maker Hiring Credits are employer incentives targeted at creating jobs for young job seekers. Employers can access a support grant for newly created jobs for people aged between 16 to 35. The incentive goes for 12 months and up until 6 October 2021. Additional employees aged between 16 and 29 will attract a $200 a week subsidy for employers, and $100 a week for eligible employees aged 30 to 35.
Boosting Apprenticeship Commencements
The Boosting Apprenticeship Commencements program is about trying to fill the gap of over 100,000 apprentice shortfalls nationally to ensure Australia has the required skills labor supply. The incentive subsidises the employer where they put on a new eligible apprentice between 5 October 2020 and 30 September 2021.
This is particularly crucial for the automotive industry, as the industry alone has a national shortfall of 30,000 jobs not filled and will have a break on international labor for some time to come. The program gives automotive an opportunity to try and bolster the numbers for the next decade and encourage more employers to take on an apprentice.
Members can still access an apprentice through a Group Apprenticeship Scheme and where that apprentice is new, and meets the criteria, the incentive will still be passed on to the host employer.
Above is an overview of some of the industry and training programs that have come through the budget, members are encouraged to discuss their options and eligibility with their accountant in order to take full advantage of incentives available.
For more information
Australian Government: Tax incentives (factsheet)
Australian Taxation Office: Instant Asset Write-off program
Australian Taxation Office: Loss-Carry Back Provisions
Australian Taxation Office: JobMaker Hiring Credit
Australian Government: JobMaker Hiring Credit (factsheet)
Department of Education, Skills and Employment: Boosting Apprenticeships Commencements