The Federal Budget 2020-21 handed down by Treasurer Josh Frydenberg earlier this week introduced a raft of tax cuts, job creation measures and other stimulus intended to help get Australia through the COVID-19-triggered recession.
Below, AB hears from key market players regarding what the budget means for small businesses, for the property market and for brokers.
CreditorWatch chief economist Harley Dale has commended the 2020-21 budget for its fair and practical approach to supporting Australian businesses.
“The government has considered a suite of policies that cover a broad range of the Australian economy – not being one dimensional, but rather all-encompassing – ‘pumping tyres up for everyone rather than a select few’,” he explained.
“In terms of the SME businesses who are all suffering at the moment, the announcement of the Instant Asset Write Off boost is welcome news. This announcement will deliver significant financial relief to struggling SMEs. If you are a small business that has been capable of surviving COVID, and you need to grow your business, the instant write-off will allow you to immediately invest in capital machinery.”
Graham Wolfe, managing director of the Housing Industry Association (HIA), was effusive in his welcoming of the budget as an effective means to both boost the home building market while also making home ownership more attainable to a larger subset of Australians.
“Tonight’s budget has given both first home buyers and more than one million workers in the residential building industry the incentive and confidence needed to continue to navigate through these challenging times,” he said.
“By increasing the number of people eligible for the First Home Loan Deposit Scheme by 10,000, focusing on new home builds, and raising the price thresholds, the government has opened the door to a larger group of first home buyers."
To Wolfe, the budget's handling of housing has made clear the “government is listening to industry”.
“Combined with the confidence-boosting business investment incentives, these measures will go a good way to helping Australians during these unprecedented times to secure a job and achieve their dream of homeownership,” he said.
The broker opportunity
Connective executive director Mark Haron has highlighted the key areas of opportunity the budget creates for finance brokers.
“We’re hoping the additional income in taxpayers’ pockets will stimulate the economy, increase confidence and borrowing capacity,” he explained.
“There are also plenty of opportunities for our asset finance brokers to support their clients and strengthen their pipeline through the expanded instant asset write off available to 99% of businesses and cash injections across key industries. [That] and the job maker wage subsidy are both terrific ways for our members to invest in their business, and their future.”
To Haron, the good news for the property market presents yet further broker opportunity.
“The expansion of the FHB scheme by 10,000 places is very welcome, particularly as the first allotment was snapped up and the first home buyer purchases have remained strong throughout the pandemic. And capital gains tax will now be scrapped for granny flats, opening up opportunities for borrowers,” he said.