2020 has been marred by an unprecedented global health pandemic but last night the economic realisation of this health crisis hit home. The global economic contraction in 2020 is 45 times worse than the 2009 Global Financial Crisis.
These are unprecedented times and called for an unprecedented economic stimulus package to ensure the recovery is swift and powerful.
That is why much of the stimulus is front-loaded, proportionate and temporary.
It is aimed at boosting confidence and returning to economic growth as quickly as possible.
Unashamedly, Treasurer Josh Frydenberg’s strategy is about job creation. The quickest way for Australia to recover economically is to get people off welfare and into a tax-paying job.
There are many specific announcements and much analysis from economic commentators about the macroeconomic indicators, and budget predictions (for example a COVID-19 Vaccine in 2021); HVIA has focused on providing information below on what we believe is most relevant to our industry.
If you wish to learn more, click here for the full budget overview and analysis.
This year our industry has been well-served by the hard fought for stimulus measures including the Backing Business Investment incentive and the Instant Asset Write-off.
We fought hard to have the latter extended until the New Year, and its effectiveness has been recognised in this budget, now being extended even further with the new Temporary Full Expensing initiative (available to 99% of businesses with a turnover up to $5bn), extended (any asset value) and pushed out until 30 June 2022. This is an amazing boost for our industry!
Assistant Minister Scott Buchholz MP acknowledged the critical role of the heavy vehicle industry saying “The government is fully behind the industry which has been essential throughout the pandemic.”
The 50% wage subsidy for Apprentices and Trainees is another solid commitment that will incentivise HVIA members to get young people into a career in the heavy vehicle industry.
There is also the Hiring Credit (up to $200 a week) for business, to support them to hire people aged 16-35, currently receiving JobSeeker and get them back into the workforce.
Tax cuts have been targeted at middle income earners and more than 11 million employees will have this back dated to 1 July 2020. The tax treatment of businesses is to be amended by allowing businesses who have losses (to 2022) offset these against profits made in 2018-19.
The $100 billion infrastructure pipeline over the next decade has been further increased with a further $14 billion in new money, much of which is targeted at shovel ready projects that indirectly support our industry.
Business is the engine-room of the economy and there is much in this budget for business.
Australians are resilient, our economy was in good shape, our capacity to invest to this magnitude is better then most other OECD countries and the debt and deficit levels whilst eye-watering is manageable in the short term.
If you have any questions, please feel free to contact us and we will endeavour to find the answer for you.
It is also worth making sure you have received advice from your advisers before acting on any of the announcements – noting the budget is not officially passed yet and can be amended in the Senate.
Budget 2020 News
5 October 20
The Morrison Government is backing trades to play a big role in Australia’s economic recovery, offering a 50 per cent wage subsidy on new apprenticeships, effective immediately.READ MORE
30 September 20
More than 350 projects will share in more than $290 million in Australian Government funding under Round 5 of the Bridges Renewal Program (BRP) and Round 7 of the Heavy Vehicle Safety and Productivity Program (HVSPP).READ MORE