Budget Boost

Budget boost: could we see a postCOVID apprenticeship boom?

Australia and New Zealand are emerging from the global pandemic relatively unscathed compared to the rest of the world which has allowed both countries’ 2021-22 budgets to include measures beyond COVID-19 recovery.

But what do their announcements mean for your business? And for the automotive industry more broadly?

In Australia, the main headlines were around $16 billion in tax cuts to small and medium-sized businesses (SMEs) over the next few years. The Government also extended tax incentives to encourage businesses to invest in equipment and machinery.

New Zealand’s “Wellbeing Budget”, as the Government labelled it, contained very little in terms of big-ticket items for SMEs. However, the extra, almost $280 million going towards vocational training may help give a much-needed boost to the number of apprentices joining the industry.

Analysing the budget announcements, Capricorn Chief Financial Officer Wes Smith said Australia’s budget should be seen as a positive one for Members, as it will build on measures implemented over the past 12 months. And will encourage SMEs to play a lead role in Australia’s economic recovery.

He also welcomed additional funding for training and apprenticeships in both countries. The Australian Government has allocated $2.7 billion to extend the Boosting Apprenticeship Commencements program, which is a wage subsidy to reimburse businesses up to $7,000 per quarter for 12 months, for taking on new apprentices.

“This makes it more affordable for Members to bring on new talent into the industry,” Wes said. “While it is difficult to predict whether this will have a positive influence on the aftermarket labour shortage, the Government are making it easier for businesses to bridge gaps in skill sets. And that is a step in the right direction. Wes also said the automotive aftermarket had performed “incredibly well” in both Australia and New Zealand throughout the pandemic. He said that was due to:

• An increased car-parc; • traveller staycations increasing vehicle usage in the midst of national and international border restrictions; and • consumers holding onto their vehicles for longer (whether that be due to limited vehicle availability or the financial uncertainties of the future impacting new car purchases).

“This should remain relatively steady in the shorter term, providing external circumstances remain unchanged,” Wes said. “However, geographical and technological developments are expected to have an enduring effect on the automotive aftermarket industry in the medium-longer term.

“The changing make-up of vehicle types on the road presents a challenge for the automotive aftermarket in a post-pandemic world. While shifts in both the way vehicle sales are conducted and what exactly is being sold makes the impact of these changes difficult to predict, we will not likely see rapid uptake of new technologies without Government support.”

The New Zealand Government had been predicted to introduce a “feebate” program, which makes electric and low-emission vehicles cheaper to buy and petrol and diesel vehicles more expensive, but this was not announced. However, there is a $302 million pot of money set aside as “a regime to incentivise the uptake of low-emissions vehicles”, which some have suggested could mean “feebate” is still on the cards.

Wes said Members should think about what the budgets mean for their business and, “where possible, take advantages of SME budgetary incentives to best position themselves for the future.”

This article is for the purpose of information only and does not constitute financial or taxation advice. It is important for Capricorn Members to seek the advice of the appropriate professional in relation to their specific circumstances.

“This presents an opportunity for Members to bring new workers into the industry at a significantly reduced cost.”

Wes said Members should think about what the budgets mean for their business and, “Where possible, take advantages of SME budgetary incentives to best position themselves for the future.”

A focus on quality and training

at Holmes Smash Repairs

In 2018 the business won best large workshop in Queensland in Paint & Panel magazine’s Bodyshop Awards. That same year the company expanded its presence, opening a second site to offer an express service for smaller repair jobs.

Darren said maintaining the feeling of a family business comes down to two key things: a good culture and creating opportunities for staff.

“I’m big on trying to give somebody a career path,” he said. “We bring apprentices through the system and invest a lot of time and money into training our own people. I like how we can turn anybody into the person we need to do the job. That’s helped us to be successful.”

Darren said providing ongoing training to staff breaks up the day-to-day of the job for employees, giving them opportunities to acquire new skills, do different tasks, and advance their career. It clearly works: two members of the Holmes Smash Repairs team have been with the business for more than 40 years.

With 44 staff over two sites, Holmes Smash Repairs in Toowoomba, Queensland, might not sound like a typical small family business, but that’s exactly how owner Darren Holmes likes to think about it.

Darren has been a Capricorn Member since the 2000s. He said he enjoys the efficiency of the trade account and uses his reward points on Capricorn shares and on holidays with Capricorn Travel.

The company was founded by his father in 1966 and Darren took over in 2007.

“Even though we’re a fairly large size now, I still class it as a family business,” Darren said. “We do between 75 and 85 cars a week, but our point of difference is we really concentrate on our level of quality.”

INDUSTRY EVENTS RETURNING TO VIC/TAS

After the restrictions imposed over various states in the last 18 months, we are reminded that the smallest things, like human interaction are so important. In a positive sign of strong recovery in Victoria, industry events have begun to return.

Over the past few months, Capricorn's Victorian and Tasmanian teams have attended a variety of industry events. This includes some outstanding trade showcases hosted by Preferred Suppliers, Burson Auto Parts and Welch Auto Parts.

If you are attending an industry event in the coming months, keep an eye out for our team members, they are very excited to see all of our Members and Preferred Suppliers.