The whole world is reeling from the impact of the COVID-19 outbreak. Monumental shifts are undeniable, and we’re riding the waves of change as they unfold.
Manufacturing, the very foundation of a strong and successful nation, is finding a firmer foothold in the Australian economy now more than ever. In fact, it’s gearing to set a new scene for the future of production and R&D, with the Australian Government’s instant asset write-off packages paving the way to powering your business through the crisis.
Expansion is everything
Henry Ford’s production line created booming business
This is a time to push the renewal button on your business assets and structure – what billionaire Grant Cardone calls ‘going to zero’. It’s essmeitally an imaginary safety switch that sets you up to weather the economic storm out to the other side with the best possible outcome.
Historically, the key to success in a crash has always been finding a smart way to expand and produce efficiently. Whether that’s content, Innovation, or in demand products, production giants have always come out on top.
From Henry Ford to entire nations and seasoned business veterans, it’s the makers that have survived and thrived through even the worst of times.
With state-of-the-art advanced manufacturing equipment readily available for financing, your business is able to take advantage of efficiency that Ford could only have dreamed of. This smart machinery cuts costs, runs reliably, and allows for more revenue maximisation than ever before – something every modern business needs in the current climate.
How to take advantage of the Government incentives
In our interview with equipment finance broker Dennis Horne, he goes into the value of the stimulus packages for business. A veteran of the 2008 GFC, Dennis led us through the ins and outs of the financial aid offered, and why it’s spending, not saving, that will likely set you up for success on the Australian stage.
To start with, there are actually two stimulus packages on offer for upgrading your machinery:
- One through to June 2020 and
- One through to June 2021
The June 2020 Stimulus package
This package gives you a 100% write off for ANY machine worth up to $150,000, or any group of machines in that value range.
You can finance these for up to five or six years as long as they’re installed and producing accessible revenue before June 30. 2020. This gives you an entire two months to reap the benefits of brand new machinery that can lower your costs!
To give you an idea of what you can purchase at this price point, an upgrade for your waterjet pump to our Greenjet Evo, or one of our CMS Bridge Saw machines is on the cards. These are premium pieces of equipment that yield highly efficient solutions over the long-term, letting you cut costs. Paired with accessories like an ITALMECC water filtration system, the future costs are cut to a fraction of those produced by outdated machinery, making an upgrade very worth your while.
CMS Waterjet – Green Jet intensifier pump
CMS Venkon 5 axis Brigesaw
CMS Itamecc Water Filtration system
The June 2021 Package
This is a separate stimulus package intended for any machine over $150,000, with a write-off of 50% from the total value able to be claimed. You have a longer period of time to claim this package – until the end of June 2021, to be exact. This could afford you extra future-proofing within the upgrade.
The benefit of this particular package is that it creates a new depreciation value for the next tax year and minimises the amount of tax you’ll need to pay – something we all want to hear.
Both of these packages are for businesses earning over $500 million in revenue – which is basically 99% of all Australian companies out there. Most manufacturing is comfortably within this threshold, and well poised to profit from both packages.
If you’re in the stone business, our CMS Bridge Saw and Speed Series CNC are cutting-edge choices that pair perfectly with the latest extra efficient Waterjet for a full suite of high-tech production.
We’ve seen major growth and demand for Glass and advanced materials machines, especially throughout the Coronavirus crisis. Our CMS Mx5 and Antares have been hard at work cutting plastic and foam parts for medical equipment across Australia and New Zealand throughout the outbreak. We’re honoured to be able to play a crucial role in the current climate and welcome every opportunity to make a positive difference throughout the pandemic.
CMS Vertical Profile
CMS Easyline 5 Axis waterjet
CMS Speed 4 axis CNC
Wage savings could increase your spending threshold
More efficient machinery means less wage spending. Across the board, the best business model is to keep wage spending at about 20% or less throughout your total manufacturing cost. If your business can beat these expenses, you could unlock an even greater level of funding from the government, as Dennis Horne advises us:
“If a customer can save $10,000 per month in wages, they can instantly borrow up to $545,000 as a result and repay it over 5 years.”
With this in mind, your business has enormous potential to expand, and even respond to the current climate by going into new fields. While it may mean an initial loss of staff, the acquisition of new machinery will eventually mean growth, which will likely result in a need for more hours for your current employees, or even an expansion in your workforce. It’s a time to be shrewd with your decision-making and hold the future squarely in your sights with your vision of success at its core.
What taking advantage of the Australian Government stimulus packages means for your business
Frankly, investing in machinery now could save your business and carry it through until the end of the crisis.
With the opportunity to re-equip your whole production setup and reap the benefits for the next 5 years, it’s a smart risk to take.
Even if you already have the latest equipment to work with certain materials, there’s room to branch out and create a more stable base for thriving business. As many companies across the country have recently seen, being able to pivot from the production of ‘non-essential’ products to sought-after ‘essential’ items at the drop of a hat has saved them, and could well be a strength for you, too.
Advanced manufacturing has the particular advantage of being able to operate like clockwork, with minimal labour needed to work it. Many of our machines actually run remotely, which means that our clients only need to be on-premise at certain times.
It doesn’t always mean that you’ll have to let employees go as a result of the upgrade – but it does mean that you can work smarter, rather than harder.
When we look back on history, after every depression, business boomed. The sales generally don’t disappear; they just go on ice and emerge stronger than ever.
With the Australian Government’s help, you’ll be contributing to an even greater, stronger nation of producers than ever before. We’re here to get you through the best and the worst of times, and want to see you set for the resurgence of a new economy.
Reach out to us today and take the opportunity to prosper through production.