I want to talk to you briefly about some of the impacts of the 2020 federal budget aside from the change in personal tax rates, write off of business assets, claim back with business losses and the extension of JobKeeper.
While these are important initiatives to keep money in the pockets of businesses and individuals.
I'm sure your accountant will have plenty of information to help you understand these particular announcements.
But it's important to note; there are a lot of other things included the in the budget to support businesses generally and some industries in particular.
The standout component of the budget was support for the manufacturing sector. Over one and a half billion dollars was announced to establish the manufacturing modernization fund.
This money will be available to any manufacturing businesses, especially in remote and regional areas. To upgrade processes, develop new processes and invest in smarter manufacturing.
Another area of significant support is research and development. For those that aren't aware of how this works. Effectively the government will give a company a tax credit of 43 and a half per cent for any financial year where they spend more than 20 thousand dollars on innovating a new product. Which will either then be used to reduce the tax bill of the company or returned as a cash refund to the business if there's no tax to pay.
Over the past few years. There's been a significant amount of talk about the government decreasing the amount of funding available through the R&D tax incentive as well as the types of activities that are eligible. When the budget was released that position was completely reversed instead of reducing the available funding by one and a half billion dollars the government actually allocated an additional two billion dollars and increased the range of activities that are eligible for the rebate.
Well, these are the most significant elements of the first round of support the government announced it would introduce further support as part of its medium-term fiscal strategy.
Once the employment rate is once again under 6%. In basic terms what this means is a lot of money is being spent at the moment to assist people in staying in jobs and investing in innovative new products and businesses.
The current JobKeeper payments are expected to last until March next year. At which point, the focus will then move from sustaining jobs throughout the health pandemic to focusing on growth and development of business and the economy in general.
But that doesn't mean you have to wait another five months to expect to receive support from the government. There is already a multitude of support programs available for both the federal and state governments, and it's always a good idea to review your potential growth opportunities and funding options on an ongoing basis.
Helping people with this is my main focus. Helping to refine your ideas and build a strategy around funding and how to make it happen.
To find out more get in touch.
In any industry or any stage of business so that you can make the most of the opportunities and support that is available for you.