“Smart brokers” who position themselves to capitalise on the new opportunities presented by the 2020 Federal Budget and take an active role in helping their clients drive investment for recovery and growth will be set for years, according to head of Connective Asset Finance Brent Starrenburg.
As Starrenburg sees it, the most significant of the incentives laid out for businesses in the budget is the ability to write off the full value of any new assets they purchase, especially given that it's effective immediately. But, in order to help customers take advantage of the provision, finance brokers need to be across their databases.
“It’s crucial that asset brokers understand how the cash injections into the various sectors outlined in the budget can positively impact businesses, and how they can use it to create that healthy pipeline of business coming forward,” Starrenburg explained.
“If you really understand the tax concessions in the budget, you can see we’re looking at incentives that will play all the way out to FY22.
“Smart brokers will actually be able to get their pipeline in such a way they’ll stimulate business over the course of the next few financial years and continue to grow their business.”
In the budget, the government committed to injecting $1.5bn into the manufacturing sector over five years, spread across six key areas: recycling and clean energy, food and beverages, resources technology, medicine and medical products, defence and space. It also announced around $11bn in infrastructure spending and other measures intended to stimulate building in all states and territories.
“A lot of the government spending is in infrastructure, and all that stuff has to be built and then maintained, so we’re going to see a lot of movement in that sector,” Starrenburg said.
“If a broker is switched on and smart enough to target that, that’s going to be a really good avenue to make some headway.”
For brokers who don’t yet feel they have their heads fully around the new budget and what it may mean for their customers, Starrenburg has recommended reaching out to their aggregators for more information, or else carrying out a deep dive of their own on the government’s budget website.
“First and foremost, brokers need to understand the incentives in the budget and what they mean to the end client. Then, they need to get the message out there to their customers,” Starrenburg said.
“With so much money being injected into certain areas of the manufacturing sector, understanding your own database becomes even more key.”
Even before the budget was handed down, Starrenburg has encouraged brokers to segment their database by industry to understand where their clients sit and have a better idea of the support they likely need.
He said, “Understand who your clients are and reach out to them individually. Send some sort of marketing email out to your database about the budget along the lines of ‘Hey, have you heard…? Talk to me to find out more.’”