Following on from our newsletter last month, Recessions Always Fast Track Change, I wanted to focus on a few of the key Federal Budget initiatives announced on 6 th October which, I believe, provide opportunities for us to grow our businesses. I wanted to focus on two (2) key initiatives which will enable our economy to get back on track:

1. Wage subsidies for younger employees

I have always taken the view that we have a moral obligation to ensure that the next generation not only has a job but is also equipped for the rigours of a career in the workforce. This goes well beyond simply providing employment to also ensure that the next generation understand the virtues of gradually building a career over a long period. During the 1991 recession, with high unemployment there was a high continuity of employment for many of us who, at the time, were in our late 20s or early 30s. By default, we were forced to stay in the same job. I think most of us would look back on that time and reflect that this was the decade when we learnt more in our careers that perhaps the decade or two afterthat. The challenge for employers is to make that investment and, let’s face it, in some cases eligible employers are going to get $10k to assist in making that investment.

2. Instant asset write off for business purchases

Who would have thought five (5) years ago, that you would be able to write off the full cost of an asset with no limit (except if you are looking to purchase a motor vehicle which has a $57K cost price limit or a leasehold improvement). What an opportunity if you are making profit and you are looking to invest in upgraded technology to help you run your business. Of course, the catch is to have enough profit to take advantage of this, but with the benefit of this instant asset write-off going until 30 June 2022, we have time to make considered investment decisions.

These times have reminded me of how thankful we can be of the previous 20 years, but now it is time to change our mindset and have a “one day at a time” focus in addressing problems while continuing to keep one-eye looking towards the future. My advice is as follows:

(a) Brainstorm your challenges in the morning while you have a fresh perspective (and perhaps a fresh cup of coffee in your hand!)

(b) Emphasise to your team that they will be much worse off if they do not focus on supporting and helping each other – remember, these are not times for us to be too self-absorbed.

(c) Tell your team to write notes and keep a diary of these times – I am sure that it will make for a good book in the future!

Remember, during difficult times, carry things lightly and see the challenges as an opportunity to grow.

Work-related deductions

On a tax note, we would like all clients to be mindful of the fact that the ATO are running increased compliance on work-related expenses. In particular, where there are motor vehicle claims and general work-related expenses, please ensure that you are keeping records to substantiate your claim. If you are unsure what is required, please reach out to your Client Manager to discuss further.

Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.