Federal Treasurer Josh Frydenberg delivered his second Budget on Tuesday 6 October, with a number of measures aimed at helping small business recover from the recession.

“COVID-19 has resulted in the most severe global economic crisis since the Great Depression,” said Mr Frydenberg. “COVID-19 will see our deficit reach $213.7 billion this year, falling to $66.9 billion by 2023-24. Net debt will increase to $703 billion or 36 per cent of GDP this year and peak at $966 billion or 44 per cent of GDP in June 2024.”

Measures announced during Tuesday night’s Budget speech include JobMaker Hiring Credit, investment in apprenticeships, education and training, temporary tax incentives and cuts to red tape.

Costing $4 billion over three years, the JobMaker Hiring Credit is designed to encourage the creation of new jobs for young people over the next 12 months.

From 7 October 2020, eligible employers will be able to claim $200 a week (for 16- to 29-year-olds) and $100 a week (for 30- to 35-year-olds) for each additional eligible employee they hire for up to 12 months from the date the new position is created.

The program will cover new hires until 6 October 2021.

Employers will not need to satisfy a fall in turnover test to be eligible for the payments, but they cannot be concurrently claiming JobKeeper.

Employees must work at least 20 hours a week and have received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months when hired.

According the Morrison Government, the program is expected to support 450,000 positions.

A JobTrainer fund has also been established. The $1 billion fund will offer up to 340,000 free or low‑cost training places for school leavers and job seekers.

An additional $2.8 billion has been committed to protect 180,000 apprenticeships and trainees, while a further $1.2 billion will create 100,000 new apprenticeships and traineeships. Businesses that employ new apprentices and trainees will receive a 50 per cent wage subsidy.

The Instant Asset Write Off introduced in response to the pandemic has been expanded. Small, medium and larger businesses with a turnover of up to $5 billion until June 2022 can now claim the full value of any eligible asset they purchase for their business.

Food and beverage manufacturing businesses will also benefit, with the government listing the industry as one of six targeted by its $1.3 billion Modern Manufacturing plan.

Regional tourism is set to get a $350 million boost through the Building Better Regions Fund, which aims to attract domestic visitors to regional destinations.

Industry bodies react positively to Budget announcement

The Budget will also see personal tax cuts provided to Australians, which Restaurant & Catering Australia (R&CA) CEO Wes Lambert expects to stimulate demand from consumers.

“We know that demand to eat out is still high, so by putting $12.5 billion dollars back into the pockets of 11 million Australian taxpayers over the next 12 months, the government is doing its bit to stimulate demand across the accommodation and food services sector[s]”, Mr Lambert said.

Mr Lambert also welcomed other initiatives outlined in the Budget, including the JobMaker Hiring Credit and the wage subsidy for apprentices and trainees, as well as those relating to loss carry backs, full expensing of assets and the expansion of tax incentives for small businesses.

“For many hospitality businesses that were previously profitable, being able to access their losses now in the form of a cash refund will give an instantaneous cash-flow boost,” he said.

“The expanded small business incentives will also help those businesses that sit above the $10 million cut-off to access those incentives for the first time. As these businesses seek to recover, the introduction of temporary full expensing will further encourage businesses to invest and create jobs 

AHA (WA) CEO Bradley Woods said WA’s hotels, restaurants, bars, pubs and taverns will have access to a number of incentives to help them rebound from this year’s challenging conditions.

“This is a considered Budget that will deliver comprehensive support for hotels and hospitality businesses to expand and grow in the months ahead,” Mr Woods said.

“The combined measures across the board – which include personal income tax cuts, carry back provisions, capital assets deductions and substantial incentives to hire new workers – assist with investment and provide a comprehensive package for business.”

“The Budget includes targeted measures which incentivise the purchase of equipment that facilitate growth and efficiency.”

“Importantly, there are significant initiatives announced tonight that will encourage business owners to hire more staff, particularly younger workers, who play a critical role in the hospitality workforce.”

“Substantial incentives to hire apprentices and trainees in the months ahead will entice more young workers into WA’s hotels and hospitality businesses, helping safeguard our state’s future workforce requirements.”

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