There is no questioning that the months leading up to the election created a swarm of uncertainty. Many in the market, reflected on a decrease and reluctance with consumer spending. Also, major critical business decisions, such as hiring and investment opportunities, have been stunted with delays. The recent boom in the construction industry did little to spare the impact, with many facing a significant decline of project approvals by an overwhelming 47% in the months prior to the election. As a result of this period of uncertainty, countless trades and construction businesses experienced the effect of a temporary market slowdown. The crucial term being, temporary.
Now, in the wake of the result, a vote of confidence and renewed energy has been instilled with the small to medium sized business sector. The construction industry is beginning to regain its momentum especially with the increase in Tier 1 construction projects being approved, consumers are enjoying greater confidence with the ongoing stability and businesses are preparing to invest substantially. It is evident that the re-election has proven to be a significant victory for Trades and Construction businesses across Australia and in terms of the advantages, here are 5 key benefits small businesses will reap:
5 Key Benefits for Small Business:
Instant asset write-off - There will be an increase of the instant asset write-off ceiling for small businesses, from $25,000 to $30,000.
Fast-tracking company tax rate cuts - to 25% for small and medium-sized companies with an annual turnover of less than $50 million by 2020-21 and increases to the unincorporated small business tax discount rate.
2. Training and Apprenticeships
A $525m skills package proposal, with an estimated $55m injected as new funding from the 2019 budget. Employer apprenticeship incentive payments are set to double to $8,000 with a target set of 80,000 for new apprenticeships in areas with skills shortages. Also, new apprentices will receive $2,000 in incentives.
3. Assisting Cashflow
The government plans to ensure small businesses get paid on time, with 97% of Commonwealth agency bills under $1 million paid within 30 days and from July 2019 this will reduce to 20 days.
4. Negative Gearing
There will be no changes to negative gearing or CGT concessions. Approximately $1.8 billion is spent annually on repairs and maintenance from negatively geared properties and changes would have cut direct revenue from trades businesses relying on this work.
5. Access to finance
We have seen the big four banks restrict lending, in the wake of the royal banking commission, consequently to address this, the Government will introduce legislation to establish a $2 billion Business Securitisation Fund. This will support non-bank lenders to improve competition in SME finance. An additional $100 million will be allocated for an Australian Business Growth Fund, which will strive to provide approximately 50 high-potential SMEs each year with access to affordable loans to turbo-charge their businesses.
So, as we witness growth skyrocketing in the current stock market and interest rates plummeting to encourage investor spending, the perfect storm is brewing for small business owners in the Trades and Construction industries. Now is the time to be in business, to focus on the fundamentals and to move your business and team forward.