If you woke up one day and saw that you were in considerable debt, how would you approach setting your budget for the next couple of years?
I would imagine the smart approach would be to take some tough decisions, make sacrifices and get yourself back on track slow and steady. You would not want to spiral out of control into a place you can not recover from.
This is exactly the situation Australia is in and thankfully this budget has taken some measures to improve the present situation.
The media loves the negative stories because unfortunately we’ve become conditioned to them. I am a big believer in the power of positivity and I am going to choose to find the positives in this budget. As an entrepreneur this is how you find opportunities to capitalise on.
If there was one theme throughout the budget, it was that we are all in this together and we need to work together to move forward effectively and for a positive outcome. This article is not about supporting one political party over the other – it’s about spending energy on getting to grips with the facts rather than spending time complaining about what we don’t like about it.
Here are seven reasons to see the budget in a positive light:
Company tax rate cut to 28.5%
Obviously this one is close to my heart. Small companies are the employers of our nation and are also the next big companies which can drive the future growth of Australia. It is in everyone’s interests to make it easier for business to be conducted. Conditions that make it increasingly non-commercial for many businesses to keep operating ultimately means potential job losses or having to move more and more business functions offshore.
No unemployment benefits for under-30s for six months
Removing this “safety blanket” will force people who become unemployed to take action quickly, look for new work or to put themselves in the best position to gain employment. It has been proven that the longer you are out of the workforce the harder it is to get back in, so it is important to take early action. As a guy under 30, there is even more reason to try to get under 30’s back into the workforce quickly because I believe we are the future leaders of the nation and there is an incredibly large amount of wasted brain and brawn power out there at the moment. Forcing people to work for the dole will give people a sense of purpose (which is extremely important) and also help improve the country. My favorite quote from Joe Hockey on the budget was this: “If you have the capability to work – we need you.”
Deregulation of university fees
People will instantly start thinking that only the rich will be able to afford to go to university. I do not believe this will be the case. Free markets improve efficiency and quality due to competition. This will make Universities try to improve their learning experience and hopefully we can create some learning institutions similar to what they have in the US, like Stanford and Harvard.
$7 GP co-payment
One of my biggest pet hates is the inefficiency of the GP business, and I believe this is often due to people abusing our great medical system. Increasing costs are often the only way to force change in behaviour and, more importantly, create innovation. The medical industry is ripe for innovation over the next few years. Businesses will see the opportunity to capitalise on people’s sensitivity to these increased costs to make them look at alternatives to going to their normal GP. There are already ways where you can access GPs internationally from your comfort of your home via the internet at a lot lower cost. There are also devices which are being made to combine with your iPhone which can diagnose most of the conditions that you normally would see your GP for. Watch this space.
New medical research fund of 20bn
Finally we are starting to think a little bit long-term rather than trying to plug the problem right now. Of course it is important to help people in need today, but the only way we made drastic improvements in medical treatments in the past was by taking a longer-term view and spending time on research towards cures, treatments, and ideally prevention. This fund could potentially find a cure for Alzheimer’s or cancer. Can you imagine what this would do for Australia’s economy and reputation around the world?
Extra money being spent on infrastructure
Something lacking in our country over the last couple of decades has been a focus on infrastructure. I like to think of it as the backbone of our country. If we want to keep living in the conditions that we have become accustomed to, then we need to think and plan for the future and determine what changes we need to make now to ensure that we can keep growing at a sustainable rate. Infrastructure projects are generally very large and go on for a number of years simultaneously increasing the number of jobs available.
$10,000 incentive to hire employees over the age of 50
I recently read that people who become unemployed between the age of 50 and 55 end up looking longest for their next job. In my eyes, 50 is the new 40 and there is an incredible amount of knowledge, skills and experience being wasted if these people do not find employment. I believe once businesses realise the value this generation can add to their business then this will change – and it will be enabled by providing an incentive to encourage people to take a risk and try something new. I can see a business opportunity in helping organisations determine where they could hire an older employee instead of a younger one, and then ensuring they are integrated effectively into the business in order to get the best value out of them.
These are just some of the ways you can find positives in this budget. It can be unhelpful to focus on things that may directly affect you when you can’t control them. Instead, try to find ways to potentially pivot your business – or launch a new one – to capitalise on the opportunities always created when new legislation is approved. It is also very important to have your personal situation reviewed as you may need to change your financial plan and investment strategy to adapt to the new changes.
After each budget at Wealth Enhancers we spend time developing new strategies to optimise our clients’ and members situations, this time is no different.
Finn Kelly is the CEO and co-founder of Gen Y financial and business advisory firm, Wealth Enhancers, along with parent company, private wealth management firm, WE Private. In 2013 Finn represented Australia at the G20 Young entrepreneurs’ alliance Summit in Moscow, has been named twice as a ‘Top 30 under 30’ entrepreneur, and winner of the Money Management’s 2012 Fund Manager of the year, young achiever award. He is a respected finance commentator and shares his views on a variety of topics at his website, The Finn Review.