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‘Largest ever’ business incentives unveiled in Federal Budget

A 50% wage subsidy for practices that employ and train new optical dispensers, an immediate asset write-off on the full value of new equipment and a hiring credit of up to $200 per week are among measures the ophthalmic sector is set to benefit from in the Federal Budget.

In what Treasurer Josh Frydenberg labelled the “largest set of investment incentives” ever provided, on 6 October the Australian Government unveiled its fiscal plan that’s aimed primarily at creating jobs and kick-starting investment.

Josh Frydenberg.

There were also new measures in a bid to stem the flow of younger people dropping their private health insurance as part of a $16 billion ongoing health response to the COVID-19 crisis.

In one announcement affecting the optical sector, Australasian College of Optical Dispensing (ACOD) director and senior trainer Mr James Gibbins said practices could receive a major wage subsidy as part of a $1.2 billion boost to encourage employers to take on 100,000 new apprentices and trainees.

He said practices could be eligible for a 50% trainee wage subsidy if they employ a new optical dispenser and enrol them in an accredited training college. The subsidy is only available for one year until September 30, 2021 to a maximum of $28,000

There may be additional financial benefits, such as $1,500 in training support for part timers employed for less than a year upon course completion, and $1500 on commencement and $2500 on completion for full timers employed for less than three months.

“This will have a huge impact on our industry. Employers must respond quickly, or risk missing out” he said.

Asset write off

In another major announcement concerning equipment purchases, Frydenberg announced that until 30 June 2022, businesses with turnover up to $5 billion can deduct the full cost of eligible depreciable assets of any value in the year they are installed.

The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.

“Over 99% of businesses will be able to write off the full value of any eligible asset they purchase for their business,” he said.

“It is a game changer. It will unlock investment. It will dramatically expand the productive capacity of the nation and create tens of thousands of jobs. This will boost the order books of the nation. Small businesses will buy, sell, deliver, install, and service these purchases.”

Frydenberg said the government would also allow companies with turnover up to $5 billion to offset losses against previous profits on which tax has been paid, to generate a refund.

JobMaker

A new JobMaker Hiring Credit will also be available to employers for each new job they create over the next 12 months from 7 October 2020 for which they hire an eligible young job seeker aged 16 to 35 years old.

For each eligible employees, employers will receive for a period up to 12 months:

  • $200 a week if they hire an eligible young person aged 16 to 29 years; or
  • $100 a week if they hire an eligible young person aged 30 to 35 years.

“Our JobMaker hiring credit will support nearly half a million young Australians in work,” Frydenberg said.

‘Modest’ health measures

Although there appeared to be little eyecare-specific funding, the Federal Government’s $16 billion COVID-19 health response includes extending eligibility from 24 to 31 years for adult children to remain as dependents on their parent’s private health insurance policies.

Australian Society of Ophthalmologists president Dr Peter Sumich said it would be interesting to see how insurers “juggle” this new measure.

“Whilst it may increase the percentage of Australians covered it will also require increases to family health policy costs,” he said,

“Minister Greg Hunt has [also] indicated that there is no appetite to damage existing business models as part of the MBS Review.”

Australian Medical Association president Dr Omar Khorshid said the government also committed to:

  • Essential continued funding to support the COVID-19 response in hospitals, pathology testing services, GP respiratory clinics and temporary COVID-19 telehealth services;
  • Retaining $448 million for patient enrolment in General Practices;
  • $2 billion over four years in expanded aged care, with $1.6 billion for 23,000 new home care packages and $103 million for COVID-19 residential care outbreak preparedness;
  • Increasing the number of Medicare funded mental health consultations from 10 to 20.

“Beyond these modest measures, the budget has left most other challenges in healthcare for another day,” Khorshid said.

“More is needed on preventive health. More is needed on long term public hospital funding. Private health is facing viability issues, and general practice in particular needs help now.” 

  • Editor’s note: The story was updated on 9 October after ACOD sought further advice about the wage subsidy for optical traineeships.