Federal Budget. A timeline of small business incentives.

federal budget updates - money notes

Federal Budget Update: 2019-2020

The delivery of the Federal Budget one month early means business owners now have more time to consider the merits of a new investment under the expanded instant asset write-off.

In a move that isn’t dependent on the upcoming Federal election, the new write-off threshold took effect on Budget night, 2 April.

The threshold has been expanded to $30,000 and the write-off is now available to any business with an annual turnover of less than $50 million, expanding access to medium-sized businesses to encourage growth.

Businesses can purchase assets valued at up to $30,000 and write the investment off against their 2018-19 tax return. There is no limit to the number of investments that can be made.

ACAPMA CEO Mark McKenzie said the move to expand the write-off scheme was a win for fuel retailers.

“The increase in the threshold is a major win for businesses in the fuel retail industry and has come, at least in part, through the combined advocacy efforts of ACAPMA and the Council of Small Business Organisations of Australia over the past 12 months”, he said.

The National Farmers Federation has also praised the expansion of the scheme.

“We’d requested an extension of that program. It sounds like a small commitment, but it’s a really big one for small businesses and for farmersm” said President Fiona Simson.

Ms Simson also welcomed funding particularly dedicated to horticulture and barriers associated with that industry.

“Horticulture is one of our fastest growing industries — recording double-digit growth over the last decade.”

Other key budget measures include:

  • Company tax rate for small and medium business with annual turnover less than $50 million lowered to 27.5 per cent and will be further lowered to 25 per cent by 2021-22.
  • Improving freight routes by committing a further $1 billion to improve network of Roads of Strategic Importance, on top of existing $3.5 billion investment. This will better connect communities and make it easier for regional businesses to access markets.
  • An additional $550 million will be targeted at accident black spots, and an additional $571 million will be provided for bridge renewals and heavy vehicle safety including the establishment of an Office of Road Safety with $15.2 million for innovative safety research.
  • Provision of $6.3 billion in assistance and concessional loans to support those affected by drought.
  • $100 million for regional airport infrastructure upgrade.

Federal Budget Update: 2018-2019

Tax cuts for small business have continued in 2018-2019 as part of the government’s Ten Year Enterprise Tax Plan.

The plan increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent, up to a cap of $1000. This rate will increase to 16 per cent by 2026-27. By lifting the small business entity turnover threshold from $2 million to $10 million, access has also been extended to a range of small business tax concessions.

Small businesses will also benefit from the extension of the $20,000 instant asset write-off for a further 12 months to 30 June 2019.

The budget also includes:

  • $24.5 billion for new nationally significant transport projects and initiatives.
  • $225 million to improve the accuracy and availability of satellite positioning across Australia, enhancing use of GPS to increase productivity including in the agriculture, construction and logistics industries.
  • Improving access to water infrastructure for farmers.
  • Increasing access to a broader range of agricultural and veterinary chemicals.
  • New funding of $102 million for biosecurity and $26.6 million to better manage costly pests and weeks and help farmers maintain access to valuable export markets.

Federal Budget Update: 2017-2018

Expanding on last year’s small business initiatives, the government has announced it will extend the $20,000 instant asset write-off for a further 12 months to 30 June, 2018. The turnover threshold will also be lifted to $10 million, five times higher than was originally available.

KPMG tax partner Simon Thorp said the extension of the write-off is “very significant.”

“This will provide a much needed shot in the arm for many small businesses across the country and will stimulate the economy and increase the investment and productivity of small business,” he said.

The Victorian Farmers Federation called for the scheme to be extended indefinitely to ensure real benefits for rural business.

Federal Budget Update: 2016-2017

FUEL retailers looking to upgrade ageing fuel storage tanks or buy new tanks for unmanned sites have been handed the perfect opportunity after the May budget.

2016-2017 budget for fuel retailing graphic

The Australasian Convenience and Petroleum Marketers Association has welcomed changes to the definition of small business that will mean more qualify for a range of tax concessions on offer, including the $20,000 instant asset write-off.

Excluding fuel revenue is the game changer

From July 2016, businesses with a turnover of less than $10 million qualify for the write-off.

Even more relevant to fuel retailers, the determination of the annual earnings threshold excludes revenue earned from fuel sales, opening the door for many more small retailers to take full advantage of the benefit.

ACAPMA chief Mark McKenzie says the change means a fuel retail business with a total annual turnover of $18 million, where fuel revenue totals $14 million and convenience store and other business revenue $4 million, would be deemed to be only earning the $4 million.

That means it could claim benefits including the instant asset write-off, a lower company tax rate of 27.5 per cent, and an 8 per cent unincorporated small business tax discount of up to $1000 for small businesses with a turnover of less than $5 million.

Also in 2016-17, the tax rate for companies with an annual turnover less than $10 million will drop to 27.5 per cent. Unincorporated businesses with an annual turnover of less than $5 million will benefit from an increased unincorporated tax discount of 8 per cent.


Federal Budget Update: 2015-2016

From Budget night, all small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000, up from $1000.

The $20,000 small business tax break budget incentive means any small business with a turnover of up to $2 million can fully deduct the purchase price of any new assets valued at up to $20,000.

There is no limit on the number of items valued at up to $20,000 a business can purchase and deduct, and the break remain available for two years until June 2017.

The rebate, which expands on the ATO’s accelerated depreciation measures, will apply to anything from new cars and machinery to sheds and storage, including fuel storage tanks.

Business will also benefit from a 1.5 per cent tax cut for small companies, down to 28.5 per cent – the lowest small business company tax rate in almost 50 years.

Unincorporated small businesses, including sole traders, will get a tax discount of 5 per cent of business income up to $1000 a year. This means the amount of tax unincorporated businesses pay on their business income will be reduced by 5 per cent, capped at $1000.

Institute of Public Accountants chief executive Andrew Conway said the deductions delivered real help for small business.

“The immediate write-off of an asset under $20,000 provides real, direct benefit and cash flow to small businesses now,” he said.
“The ability to purchase a small asset to grow a small business will encourage people to become more efficient and more productive.”

NAB Agribusiness general manager Khan Horne said June had already been a busy month, and the signs were there that the budget had boosted confidence.

“There are definitely people looking at the tax incentives and how to make the most of them as they assess their business earnings and borrowing position at the end of the financial year,” he said.

Top five reasons to buy a self-bunded fuel storage tank

Top five reasons to buy a self-bunded fuel storage tank

You’re looking at fuel storage options for your farm, home or business, but it’s difficult to make a decision. There are a number of variables to consider – capacity, location, maintenance requirements, accessibility and environmental requirements, to name a few.

Self-bunded tanks, which are double-walled or skinned, are an increasingly popular option for a number of reasons.

10000l self bunded tank on the farm, flowers, blue sky

Top 5 benefits of a self bunded tank:

  1. Cost savings: When you buy a self-bunded tank, the savings start with the set-up. Because they incorporate a built-in containment system for ruptures and leaks, self-bunded tanks eliminate the need for specialist civil engineering or building works involved with building an external bund. Typically, buying a self-bunded tank works out at about half the cost of using a single walled tank and building a bund.
  2. Compliance: Buying a self-bunded tank that is certified to Australian Standards is the best way to ensure your fuel storage complies with environmental legislation in your area. A properly maintained bunded tank and refuelling system – including valves, pipes, pumps and hoses – is also the best protection you have against fuel leaks that can cause soil or water contamination and six-figure fines.
  3. Flexibility: A self-bunded tank is a drop-and-go option, so not only can you use your fuel storage immediately, you can safely and easily transport your tank to another site. Smaller portable self-bunded tanks are available in sizes up to 10,000 litres, meaning when your worksite moves with seasonal changes or project demands, your fuel storage can move with it. Our fully transportable Grande tanks store up to 68,000 litres of fuel, for operators with high fuel turnover and storage requirements. Again, there are cost and efficiency benefits because refuelling can take place on or near your worksite, wherever the site is. To make this option even more flexible, F.E.S. TANKS can even provide solutions for hard-to-access areas, like our HULK self-loading system that makes it easy to position and relocate high volume tanks without a crane lift.
  4. Keeping your fuel in great shape: Because self-bunded tanks are easy to maintain and to access for maintenance, it’s easy to keep your tank in great shape – and keeping your tank healthy means your fuel with stay fresh for longer. That in turn means your vehicles will run more efficiently, and your business will benefit.
  5. Security: Self-bunded tanks also offer a high level of built-in security, with a lockable hatch across all access points that can be secured with a heavy padlock when the tank is not in use.

The F.E.S. range of self-bunded tanks comes in sizes from 1000-110,000 litres and offer unbeatable quality and the added advantage of a safe fuel limit which is 10 per cent greater than standard tanks of similar capacity – meaning your tank can go longer between refills.

Call our experts on 1300-651-391 to find out more about our range or discuss your needs and let us build the tank that’s right for you.

Our typical sales conversation for self bunded tanks

two people on the phone having a sales conversation

Today I would like to talk about You, Me and our potential sales conversation.

I’m talking about you as the customer and me as the supplier.

First, this is a long email, so go and get a cup of tea or coffee as this could take some time to read.

two people on the phone having a sales conversation

Over the weekend, I was sitting with a few of my mates talking about the challenges of running a business. We’re a pretty diverse bunch – there was a project manager, a fitness instructor, a plumber, an aluminium fabricator and a financial adviser. (Sounds like the start of a joke. Trust me, there is no joke involved here.)

Even though we are all operate in different businesses we all agreed on one thing. There seems to be a massive disconnect between where the customer is when they first approach a supplier and where the supplier is upon that first introduction.

Let me explain how I see it, but please tell me if I’m wrong.

At the first point of contact the customer will have an idea in their head on what they want and what price they are willing to pay. Some research may have been done prior, but if it is a complex product it may be the phone call that is the first point of reference.

From the business owners perspective, he hears a simple request but straight away thinks of the different variations and solutions that may come into play in order to address what the customer requires.

There lies the disconnect!!!!!

The customer wants a product and a painless solution to a problem. Combine that with a great price, minimum fuss and no ongoing issues.

The supplier has several options in mind that may affect the working solution and price, all of which are dependent on the customer’s unique requirements.

So whilst the customer wants a simple solution, the suppliers head is racing with options.

And that, my friends, is where we are at on a daily basis…..

Example of a typical sales conversation within F.E.S. TANKS

If I relate this to what we hear daily within our business, hopefully it will help you understand our position and also help you think about the options YOU need to consider.

Customer: Hi, I was after a price for a ????? litre storage tank.

F.E.S. TANKS: Yes, no problem, that price is $$$$ + GST + freight.

Now that is breaking it down to its simplest form. However what I would like to do is try and break the sales conversation down from the perspective of each party, and in doing so really understand what is going on here.

Customer: I am after a price on a ????? litre storage tank. Really, this is only the beginning of what the client wants. The next question is always – does that include a pump?

What is the customers real requirement here?

What the client usually means is: I am after a storage tank with a pumping package as a finished item, and all within my budget of $$$$. I want it delivered to my place of work as a plug and play solution. That is drop it off, fill it up with fuel and start using it. No fuss, no hassles. Job done.

Me (F.E.S. TANKS): Okay No problem. Bunded storage tank, simple. No that doesn’t include a pump. What will you be using it for and what are your requirements?

What is the salesman’s real requirement here?

I need to know

  • Fuel type?
  • Do they want to run a 12V, 24V or 240V deliver system.
  • If it is a 12v system, would they want a solar set-up as a self-generating power source?
  • Do they want to consider normal flow or high flow rates?
  • Do they want to have a simple pumping solution or do they want it metered for accountability?
  • Do they want a manual nozzle or automatic shut-off nozzle?
  • Do they want a simple set-up or do they want a weatherproof solution for added longer term durability.

Hopefully you can see the two different thought processes going on here, with completely different considerations behind them. That said, the one common aspect of both parties is…….PRICE

Both parties have to get what they want for a mutually agreeable price. That means a price where the customer feels like they are getting value on goods and services. It’s also a price where the supplier feels they are delivering a product or service that is reflective of the customer needs but also reflective of their time, effort, experience, and one that is sustainable from a business perspective.

Both parties need to gain from this sales experience.

Business is fundamentally underpinned by relationships. Long term business relationships are underpinned by both parties continually gaining something along the way. These relationships break down over time because inevitably one party feels the other is gaining more at the expense of their misfortune.

So, long story short. Price doesn’t shift (in principle) so something has to. What changes is the mindset of both parties as they move towards that middle ground where both parties benefit.

Now you as a customer reading this will know where you mindset is relation to what you want. What I want to do is explain it a little more from our perspective, with the goal that you may be better informed and have a better understanding of the considerations when looking to buy a Bunded Storage Tank.

What you as a customer should consider when buying a fuel storage tank

  • Tank Storage

You will have an understanding of your operations and fuel usage. That will also give you an idea of the size of tank you require for storage. That part is simple.

We have a range of bunded tanks ranging from 1,000l to 110,000l plus. They are easily adaptable to store different fuel types. They are environmentally friendly with their dual compartment systems (a tank within a tank) as well as being simple to move. They are a precision engineered product that is compliant with all Australian standards and finished with a paint finish that is guaranteed to deliver years of outdoor protection. Job done really.

  • Fuel Pumping

Yes, our tanks are great for storage, but what good is a fuel tank if you can’t get the fuel out of it?

This is where the complexity starts to build with multiple variations and options all very much dependent on YOUR unique situation.

So consider this please, in order of priority:

  1. Fuel type?
  2. Do you want to run off mains power or another power source (12v or 24v)?
  3. Do you want a pump only or do you want it metered for accountability?
  4. What sort of flow rate for delivery do you require? Standard or high flow?

The options on pumping gear are endless. Take a look at some of the pumping kit that we have in our online store to get an idea.

And there you have it. This is just a short list of things to consider, but it is better that you consider them prior to making that first call.

Of course if you are a big operator with big fuel volumes, you will have a whole list of other requirements and this is something that would need to be discussed one on one. For the small to medium operator let us continue.

Costs of Course!!!

Each one of these options listed above will have a cost implication, and this is a cost that needs to be factored into to your overall budget.

The best way to address this is by an example.

As a general rule of thumb I would allow 15-20% of your overall budget for pumping equipment. Of course that is very much dependent of your specific requirements so that range could go up or down depending on the simplicity or complexity of the brief.

YOUR BUDGET ($$$) = 80% TANK ($$$) + 20% PUMPING GEAR ($$$)

By using this formula you should you have a good level of expectation when looking to source a complete storage and pumping solution. However give us a call and so as we can discuss your situation and structure a package that is perfect for you.

Thanks for your time.

Daryl Cygler
(on behalf of the F.E.S. TANKS)

Australia’s Fuel Supply Security

australias fuel supply security cartoon

Australia’s fuel supply security. All is not what it seems.

TENSIONS in the South China Sea over recent weeks have again thrown the spotlight on Australia’s fuel supply security.

australias fuel supply security cartoon
Artwork: Sarah Boese

Retired Air Vice Marshall John Blackburn, who has produced major reports on the issue for the NRMA, went so far as to say Australia’s entire food, medicine and water distribution was hanging on a “just in time” approach to transport fuel supply.

What he means is that with Australia’s strategic fuel stockpiles as low as 34 days and more than 85 per cent of refined fuel imported, predominantly from Asia, any major disruption would be bleak.

Australia has closed four refineries since 2003 and the trend to importing from Asia, where huge facilities are far more cost-efficient, is unlikely to stop.

Engineers Australia told a Senate inquiry in 2015 that the country’s total stockholding of oil and liquid fuel amounted to two weeks of supply at sea, 5-12 days’ supply at refineries, 10 days of refined stock at terminals and three days at service stations.

The Australian Government has agreed in principle to produce a plan to add 40 days of fuel reserves, due for release later this year.

For farmers, this will need to address concerns including the location of the stockpiles – if storage increases but there’s still a reliance on road transport to get the supply to regional areas, what are the implications?

Mr Blackburn told the ABC getting fuel stocks to where they’re needed is key – and it’s a process heavily reliant on fuel supply.

“What’s important is what type of fuel you’ve got and where, because we can’t move fuel around Australia readily,” he said.

“We can’t move by rail anymore because we don’t have the rolling stock, we don’t own ships anymore and the trucks that move fuel are designed for ‘just in time’ commercial deliveries.”

Fuel shortages, we’ve been here before.

Recent history shows it doesn’t take much to cause regional fuel shortages and a major headache for farmers.

An aerial shot of Tullamarine. (Melbourne Airport)

  • In the same year industrial action caused disruptions in Queensland in May, when the Maritime Union of Australia briefly blocked entrance to the Caltex refinery at Lytton in a rally after tanker ship job cuts.

What are the risks?

WHEN grain grower Corey Blacksell worries about fuel supply, it’s industrial action that is one of his biggest fears.

“I do see fuel security as a big risk,” he says.

“The more imminent issues are industrial issues – it wouldn’t take many boatloads of fuel to be delayed to cause major disruption.

“The risk is we’re importing our fuel – there’s not a lot of stuff sitting at Port Adelaide at any one time.”

Regional conflict – not necessarily involving Australia- is also a concern, with major shipping routes travelling through the increasingly tense South China Sea region.

The United States and China are locked in a struggle over navigational freedom, with Malaysia, Brunei, Taiwan, Vietnam and the Philippines weighing in.

A conflict could interrupt supply through blockades on the lanes, but also by forcing Asian countries to reduce their exports to bolster their own emergency fuel holdings and feed increased defence force needs.

There’s also the potential that because Australia doesn’t have its own flagships, threats to foreign crews could lead them to abandon risky routes.

The NRMA says even a 20-40 per cent cut in the fuel supply would lead to a situation where communities would quickly start running out of basics like food and medicine and the transport-reliant economy would start to shut down.

What happens in a fuel emergency?

Suppliers say it’s still very unlikely Australia would need to enter a state of liquid fuel emergency.

However if a national supply emergency was declared, essential users including Ambulance services, corrective services, fire and rescue crews, police and public transport services would have priority access to fuel.

Rationing would apply to all other users.

Caltex refinery at Lytton

What can businesses do?

The Australian Institute of Petroleum puts the onus back on industry to take precautions.

For business owners, this means considering options like increasing on-site fuel storage.

“Many large fuel users only hold limited stocks on the expectation that stocks will be held by fuel suppliers, or indeed governments will intervene to protect their interests if supplies are limited,” they say.

“This expectation creates a vulnerability in the transport fuel supply chain.”

“Fuel suppliers do not hold buffer stocks to guarantee the ongoing normal business operation of all major fuel users and distributors during a major supply disruption.”

The institute recommends making a careful analysis of fuel usage to inform a plan of what to do if supply is disrupted.

“Actions should also be taken by major fuel users to address any unacceptable business risk arising from a fuel supply shortage, including investing in their own extra stockholdings and storage capacity, improving fuel supply management and changing business priorities to avoid or minimise the impact of business fuel supply disruption.”

A fuel management and refuelling system and can help inform this type of strategy by providing up to date data on your business fuel use including detailed figures on consumption, seasonal variations and where the most fuel is being used.

Improving storage capacity by going with higher capacity tanks, or buying relocatable tanks that can be filled and placed in key work areas in times where disruption is a risk, are other options worth considering.

For help with creating a strategy, ask the expert engineers and technicians at F.E.S. TANKS for a free consultation.

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