Most packaging businesses will pay less tax from today, but will pay more in super, more on the minimum wage, and more for paper, board and films, while the instant asset write off and carry back losses remain, as the new tax year kicks in.
For business with a turnover of less than $50m the business tax rate drops to 25 per cent from 26 per cent from today. A suite of tax concessions that had only been accessible by companies with turnovers of less than $10m will now be available to all companies with turnovers of up to $50m.
The continuation of carry back losses means that losses accrued in the 2020/21 tax year ended yesterday can be carried back against profits in previous years. The instant asset write off means that depreciation on any assets bought can be 100 per cent in the tax year they were bought.
Federal treasurer Josh Frydenberg said the new measures will further boost local business, which he said was already driving growth, saying, "Australia’s economy is now bigger than it was pre-pandemic, a feat no major advanced economy has achieved."
Packaging business owners are, however, facing a slew of increased costs from today, including the minimum wage. For award/agreement-free employees, the national minimum wage will increase from $753.80 per week ($19.84 per hour) to $772.60 per week ($20.33 per hour).
The employers’ superannuation guarantee sees 0.5 per cent increase, taking it to 10 per cent for all employees. However, employers do not need to increase the amount paid to any staff on total salary package if they do not want to, they can swap 0.5 per cent from salary into super.
Staff on middle and low incomes will also benefit from the extension of the tax offset, which delivers rebates of up to $10,880 for singles and $2160 for couples, and applies to everyone earning up to $90,000pa.
As well as rises in staff costs, packaging businesses are also facing a materials price rise from today, with the cost of board, paper, films and labelstock all rising, and not by an insignificant amount, as merchants and importers battle huge rises in shipping costs. Spicers is raising its prices by six per cent across all grades. Ball & Doggett has a range of price increases for its media.
