Tumut accountant Steve Walker believes the news from the 2020 budget is good rather than fantastic for the Snowy Valleys region.
The much-talked about instant asset write-off means small, medium and larger businesses in Australia with a turnover of up to $5 billion a year will be eligible for tax write-offs of all assets up to $150,000.
However, Mr Walker feels people in the Snowy Valleys and elsewhere shouldn’t be in too much awe about it, even if it can bring benefits.
“The instant asset write-off only brings forward deductions that you would be able to claim after a longer period of time,” he said.
“However, if you combine it with the loss carry back provisions, this will have a more positive effect on businesses in our area.”
The loss carryback means that when a business experiences a net operating loss (NOL) and chooses to apply that loss to a prior year’s tax return. This results in an immediate refund of taxes previously paid by reducing the tax liability for that previous year.
“For business in our area it (the budget) is fairly mixed,” Mr Walker said.
“This whole budget is business recovery-led and it’s fully geared at business investment, to get that going and out of that create jobs.
“For this region, a massive write-off is a very welcome measure, but particularly for large corporations because the turnover threshold increase of $5 billion, so that brings in a lot of big business; banks and miners; those sort of companies, and we don’t have those sort of businesses around here.”
He said it was quite similar to how the measures were before; the only difference is that essentially there is no limit now on the capital investment in depreciable assets so the businesses that would typically benefit from that would be the logging industry, and trucking companies, because the limit before was 150, and now it has increased to no limit.
“At the end of the day, a business can only really take advantage of that degree of asset write-off depending on its ability to be able to finance the borrowings and the investment that comes with that,” he said.
However, he believes the budget is still “very, very good” for the smaller-sized businesses like we have in the Snowy Valleys, and that the advantages to larger corporations should drive investment and result in job creation to benefit the larger community.
“The report card would be very good for small-to-medium size enterprises and excellent for large corporations,” he said.
“It’s a shame for those businesses in the logging and forestry industry that because we’ve had the fires, and the detriment that’s occurred to that industry, and the downturn that we’re going to see, that the logging industry may not be able to take advantage of that investment and the immediate asset write-off provisions because of the effect of the bushfires,” he said.
“It’s a great measure, but how much that industry can take advantage of it because of the fire situation is the question.”
Mr Walker believes the budget is all based on the hope that there will be a Covid-19 vaccine next year, that there will be no further “waves” of Covid-19 outbreaks, and that the economy will recover and grow, with the amount of government debt reduced.
Tumut Regional Chamber of Commerce president Natalie Randall said that overall, it is a positive budget.
“The tax cuts and business incentives are designed to increase investment and new equipment and the reduction of taxes will support businesses and boost employment, apprenticeship incentives and infrastructure spending, and hopefully some of that comes our way and creates jobs in the future,” she said.
She believes those who have criticised subsidy payments intended to get the country’s people through the Covid-19 pandemic, such as Jobkeeper, are off the mark.
“The government had no alternative,” she said.
“Once the economy gets going again we will have the capacity to repay the debt.”
She also said the expanding of the first home loan would support the construction industry.
Valmar Support Services CEO Hugh Packard is happy about the extra $3.9 billion for the National Disability Insurance Scheme.
“It is a lot of money, and a large percentage of all the money spent on the scheme, and I am really pleased to see it happen, and bigger numbers of people are now needing the scheme’s assistance,” he said.
He is also pleased about the $1.6 home aged care boost.
“There is a huge waiting list for aged home care services so this is a really good thing,” he said.
“It is a significant improvement, and anything helps.”
The agreement to ban the export of unprocessed waste plastic, paper, glass and tyres also pleases Mr Packard, as Valmar handles much of Tumut’s recycling.
“This should provide opportunities and will almost certainly provided better markets for some recycled products that now are close to worthless and very difficult to sell,” he said.
Tumut Community Association’s Christine Webb has mixed feelings about the budget and its 2020-25 National Health Reform Agreement, and what it means for health care in the Tumut region.
“It is focused on delivering high quality care, prevention, best practice, primary health care initiatives and giving public health patients the same access as private patients,” she said.
“The focus seems to be on high cost therapies, and we do not do a lot of that here. It seems that it will benefit the larger regional hospitals. We need the federal government to give some direction to state governments and health districts to appoint qualified doctors for hospitals such as ours.
“They say they are going to provide more nurses and doctors, but how they are going to do that is not clear.”