BUDGET 2018 – WHAT IT MEANS FOR SALON OWNERS

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Posted May 9, 2018

Budget Night 2018 was one of the most anticipated budgets of the past 10 years, as it is a precursor to the calling of an election by the Turnbull government. The whispers of ‘tax cuts’ round the traps really encouraged most people to pay attention to what Scott Morrison was due to announce, but as those who watched the budget announcement will know, very little was said about changes for business.

 

HABA have drilled into the changes in the budget and pulled out some key insights on what the Australian Budget 2018 means for salon owners, so read on for a glimpse of what is to come –

 

Instant Asset Write off

Importantly for salon owners who often have quite heavy capital expenditure on salon equipment, the $20,000 Instant Asset Write Off has been extended for another 12 months until 30 June 2019. This means that large capital expenditure purchases for your salon can be instantly taken off your bottom line, rather than their value depreciating slowly.

 

Streamlining transactions with Government

The Government will provide $92.4 million for the Digital Transformation Agency to create the GovPass program. This will allow salon owners to have easier access to digital services, such as creating a digital identity and completing a tax file number application online. This will streamline some of the necessary process you need to go through online and will create one place where all your business information is located.

 

Skilling Australians

A constant source of pain in the Hair and Beauty Industry is the lack of apprentices and trainees available in the industry. The Government is set to provide levies from the Skilling Australians Fund, with a priority for these payments placed on apprenticeships and traineeships. Unfortunately, this does not help in getting teens interested in apprenticeships and traineeships in the first place, but it does make an easier path for them if they choose to get an apprenticeship in the hair and beauty industry.

 

The Government has also committed to providing over $200 million to ensure that mature age workers stay in the work force and transition into new roles – which could easily be in the hair and beauty industry.

 

Levelling the Playing Field

The biggest business crackdown as part of the Budget 2018 will be on the Black Market Economy. Those salon owners using tax avoidance to stay competitive in a tough market will quickly find themselves in hot water. The use of cash for payments over $10,000 will be banned and all commercial transactions must be made by eftpos or cheque. This ensures that all businesses are on the same playing field with recording correct taxable incomes and will penalise those businesses not doing the right thing.

 

Missed Opportunities

Unfortunately, there were a few missed opportunities. The rising cost of energy was not addressed for businesses at all, especially important for salons and spa’s where energy usage is very high. There is no addressing of how to entice teens into skills shortage areas like the hair and beauty industry, nor were there any indications of tax breaks for small business. These are all areas that our members are crying out for relief from, and HABA are actively pushing Government to address.

 

Overall, there are lots of positive notes for salon owners to take out of the Australian Budget Announcement for 2018. It’s important that salon owners stay informed and keep the Government accountable for legislation and changes, and HABA will continue to be your partner in pushing for changes to benefit salon owners at all levels of Government and in keeping you informed as these changes occur. That’s why it pay’s to be a HABA member. Become a HABA Member by calling the office on (02) 9221 9911.