11 minute read
BUDGET 2020
Bettingonprivatesectorrevival Betting on private sector revival
DAVID PRING
TREASURER Frydenberg has put the challenge to the private sector to pull the flailing economy up by its bootstraps.
He has done this through a broad suite of policy initiatives, including brought-forward personal income tax cuts, full expensing for depreciable business investments, wage subsidies to encourage the employment of new staff and reforming insolvency arrangements to aid businesses to continue to trade.
Overall, this a Budget with plenty of useful measures for business. Th e tax loss carry-back rules are a great initiative which will benefi t many companies which are still operating well during this crisis and deserve support. Th is is a smart policy decision which can unlock cash quickly for businesses that have shown they can be profi table.
It would be ideal if the carry-back went back further than 2019 but it is still a very substantial act of assistance to companies who have been made profi ts in previous years but have been batt ling through the Covid-19 era.
It means that companies which suff er tax losses in the 2020, 21 and 22 tax years can carry those losses back and reclaim the tax on the profi ts they made in 2019 or carry it forward to later years.
Th e expensing of capital assets acquired and installed before June 2022 – an extension of the instant asset write-
- Dr Brendan Rynne
off scheme – will also have a signifi cant impact on business decisions.
Companies with turnover up to $5B will be able to deduct the full cost of eligible depreciable assets of any value in the year they are fi rst used or installed, and the cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.
Th is will certainly help with the cost of purchasing capital equipment although, given it is temporary, it is mostly a timing advantage in bringing forward business investment, rather than an investment allowance would have brought a higher cost to the Budget. It also requires
Artist impression of the baggage area at Western Sydney Airport.
companies to have suffi cient confi dence to invest in the next two years.
Th ere are also some other tax measures of note. For groups with international operations there is an important, and much-needed change to the company tax residence rules. Going forward, foreign subsidiaries will only be Australian tax resident where they have a signifi cant economic connection with Australia.
Th is will prevent international subsidiaries from being tax resident on technical grounds and will simplify international tax.
Th e Government will introduce a Fringe Benefi ts Tax (FBT) exemption for retraining benefi ts provided to redundant or soon to be redundant employees. Without this measure, FBT would apply at a rate of 47 percent eff ectively doubling the cost of providing retraining benefi ts. In addition, there is a potentially signifi cant win for the reduction of FBT administration costs.
Th e ATO will gain increased powers to allow employers to rely on existing records rather than the current prescribed declarations and other records employers and employees must maintain. Th is measure will apply from the FBT year commencing April 1 aft er the enabling legislation is enacted.
At the smaller end of the market, there is also an extension of several small business tax concessions to entities with a turnover up to $50M, which should benefi t an additional 20,000 businesses.
From a business perspective, the bringing forward of the personal tax cuts will also be welcome as they will stimulate economic growth. Overall, it is
Continued on page 13
INTRODUCING WESTERN SYDNEY BUSINESS CONNECTION’S
SMALL BUSINESS MEMBERSHIP
$200 + GST
INCLUDES:
DIRECTORY
WSBC.ORG.AU
Dr Brendan Rynne.David Pring.
Continued from page 12 a budget focussed on stimulus measures for mid-market growth and job creation, supported by welcome tax changes.”
Western Sydney is already the benefi ciary of substantial infrastructure spending over the next 10 years.
Western Sydney Benefits
Th is year’s budget has also announced additional national infrastructure spending which will benefi t Western Sydney businesses that supply the construction and infrastructure industries and will provide more projects for companies that are able to tender to supply these infrastructure announcements.
Dr Brendan Rynne, KPMG Chief Economist, says the Government has gone 'all-in' with the Budget, bett ing on the private sector to pony up and drive the post-coronavirus economic recovery for the nation.
Th is big bet is seen in the economic forecasts underpinning the Budget. Private fi nal demand is forecast to kickup in 2021-22 by about 7 percent aft er recording a fall of about 3.5 percent, while public fi nal demand swings in the opposite direction, up about 5.75 percent and 2.5 percent in 2020-21 and 2021-22 respectively.
A consequence of the government-induced boost to private consumption and investment spending is an increase in infl ation of 1.75 percent for this fi nancial year and 1.5 percent for the next.
It is highly likely we will see price increases in investment goods as businesses take advantage of the concessions off ered in the Budget.
What is conspicuously missing from the Budget is any certainty around the outlook for Newstart payments beyond the end of this calendar year.
“We strongly believe the government should be looking to next year's Budget to roll out serious economic reforms, many of which can be readily found in the Productivity Commission's 2017 "Shift ing the Dial" report”, Dr Rynne said.
David Pring is Managing Partner of KPMG Western Sydney. Council endorses Penrith’s rising strong recovery plan
PENRITH City has taken another step towards economic and social recovery, with the adoption of the Penrith Rising Strong Recovery Plan.
Over the next 12 months, the plan will steer proactive eff orts to recover from the impacts of the COVID-19 pandemic, shaping the future of Penrith city and the communities who live, work, invest, study and visit there.
Th e plan continues to provide support where it is needed most, building on the initial package for communities and businesses released by Council over March and June 2020.
Newly elected Mayor, Karen McKeown OAM, said the Penrith Rising Strong Recovery Plan was her top priority.
“Th e Plan has been developed in collaboration with local businesses and community organisations, who are at the coalface of dealing with the fallout of the Penrith Mayor, Karen McKeown OAM. pandemic. Th eir experiences and their particular needs going forward are built Within the umbrella of the Penrith into the foundation of the Penrith Rising Rising Strong Recovery Plan are several Strong Recovery Plan,” Cr McKeown targeted components. said. Th ere are 30-day and 100-day recov-
Since May, Council has been leading ery goals, a dedicated Social Recovery two taskforces dedicated to guiding Plan which focuses on community Penrith City’s recovery from the econom- capacity building and resilience, fi nancial ic and social impacts of the COVID-19 support and community engagement; pandemic. while a dedicated Economic Recovery
Th e experience and input from Plan addresses needs for marketing and key local stakeholders are critical to promotion for local businesses, fi nancial a targeted recovery, so the taskforc- support and incentives, arts and cultural es were built as a coalition between opportunities, and att racting investment Council and local businesses, educa- to our City. tional institutions and sporting groups, While providing a guiding blueprint economic representatives like the City for the coming 12 months, the Plan Centre Corporations and the Chamber is also designed to be amended and of Commerce. built-upon as needed.
GET TECHNOLOGY SUCCESS
Get a lot more than your average IT Support Provider
Build a strategic relationship with a next generation Technology Success Provider that works with you to achieve your business goals.
We service the following industries • Wholesale & Distribution • Construction • Architects & Designers • Accountants & Lawyers • Professional Services • Medical Practices
Find our what our Technology Success Plan can do for your business
Artist impressions of the stations.
AIRPORT STATIONS NAMED AIRPORT STATIONS NAMED
DALLAS SHERRINGHAM
THE station locations for the new Western Sydney Airport and Aerotropolis line have been named.
Th e stations for the new Sydney Metro project will service Greater Western Sydney and will provide a multitude of new business opportunities for the region.
Th e project also set to deliver a multi-billion dollar boost to the region’s economy.
NSW Premier Gladys Berejiklian, Minister for Transport Andrew Constance and Minister for Western Sydney Stuart Ayres announced the station locations at the site of the future Western Sydney Aerotropolis Station.
“Th e Sydney Metro – Western Sydney Airport project will support 14,000 jobs, including 250 apprentices and inject billions of dollars to the NSW and Australian economies,” Ms Berejiklian said.
“Where we are standing today will become a major new transport interchange, right in the heart of the future central business district for the Western Parkland City.”
Federal Minister for Population, Cities and Urban Infrastructure Alan Tudge said construction would start this year on the around $11bn mega-project that would deliver economic support and local jobs.
“Th is city-shaping investment is being
6,500 hectares of land rezoned to provide for employment, residential and environmental uses in the Western Sydney Aerotropolis, setting up NSW for a strong economic recovery and paving the way for land to be developed before the first plane takes off in 2026.
Minister for Planning and Public Spaces Rob Stokes said the rezoning of the Aerotropolis Core, Badgerys Creek, Northern Gateway, Agribusiness and Wianamatt a-South Creek was the catalyst for the creation of Sydney’s
“Western Sydney residents will reap the benefits of this investment well before the first train leaves the station.” – Minister, Alan Tudge.
fast-tracked to help our economy recover from COVID-19 and deliver a major stimulus right in the heart of Western Sydney,” Mr Tudge said.
“Western Sydney residents will reap the benefi ts of this investment well before the fi rst train leaves the station.”
Exact station locations have now also been confi rmed on the 23km driverless railway line at St Marys, Orchard Hills, Luddenham and two stations at the airport.
Th e St Marys station will be beneath the existing St Marys station.
third city centred on a new global airport.
“Th ese fi rst fi ve precincts will deliver much-needed jobs growth to Western Sydney, providing the potential for 100,000 new jobs, as well as homes for 30,000 residents once fully devel-oped,” Mr Stokes said.
Mr Stokes added that the Aerotropolis would be supported by the which sets up a central green spine to protect the environment and provide open space for future residents and visitors to enjoy.
Long tender process
NSW Minister for Transport and Roads Andrew Constance said the tender process had also started to deliver 10km of twin Metro railway tunnels, with the call for registrations of interest.
“Construction starts later this year on a project that will become the transport spine for the Western Parkland City,” Mr Constance said.
“Th e new railway will link residential areas with jobs hubs, and connect travellers from the new airport with the rest of Sydney’s public transport network.”
NSW Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres said the project would be a game changer for the region.
“Th is will provide the backbone for the economic and broader development
of the Western Parkland City,” Mr Ayres said.
Federal Member for Lindsay Melissa McIntosh said the Australian and NSW Governments were working together in preparation for the airport opening for passenger services.
“Th e huge investment in Western Sydney Infrastructure projects is creating an interconnected city that will enable innovation, support growth and create jobs to build an exciting future for Western Sydney,” Mrs McIntosh said.
Supporting the airport and Aerotropolis is a key part of the Western Sydney City Deal – a 20-year agreement signed in March 2018 by the Commonwealth Government, NSW Government and eight Western Sydney
Land parcel holds the key to jobs boom
ALANDMARK rezoning will see
14
Wianamatt a-South Creek pre-cinct,
councils.
“Th is 1,300-hectare precinct will logistics, agribusiness, education and include walking and cycling trails that research industries,” Mr Ayres said. connect open space along the creek as In addition, the Agribusiness prewell as cafes and restaurants.” cinct will revolutionise local fresh food
Minister for Jobs, Investment, Tour- farming as produce can go from the farm ism and Western Sydney Stuart Ayres gate to the international consumer plate said the Aerotropolis will be a major in 36 hours. contributor to the 200,000 future jobs Th e Western Sydney Aerotropolis that will be created across the Western rezoning is one of 10 projects in the Parkland City over the next 20 years. fi ft h tranche of the NSW Govern-
“Th is high-skill jobs hub is set to ment’s Planning System Acceleration become the most dynamic economic Program. To date, the program has development precinct in Australia created oppor-tunities for more than with jobs in aerospace and defence, 50,000 jobs and almost $25B worth of manufacturing, healthcare, freight and economic investment.
WESTERN SYDNEY BUSINESS ACCESS OCTOBER 2020
