Winning Group is hoping businesses will start buying flatscreen TVs, fridges and new ovens after treasurer Joe Hockey on Tuesday night announced a $5.5 billion package for small enterprises which included included a number of tax cuts and concessions to get them spending.
Winning Group CFO Aaron Links told Business Insider it was probably a bit early to tell if small businesses were taking advantage of immediate tax write-offs up to $20,000, rushing out to buy a flat screen or a new bar fridge for their offices. Links said the company was, however, expecting a bit of extra interest in electronic items.
“In terms of immediate benefits it’s too early to quantify… Ultimately you’re going to end up with additional interest in computers or phones, more of the business related items,” he said.
“In this day and age there are more people using screen technology in their business for dashboards and KPIs. The flat screen side of things, it might encourage them to get an extra one if required or even get one.”
An uptick in the restaurant industry is what Winning will be on the lookout for as upgrades to refrigeration or cooking flows straight through to their key market.
Early market reaction to the federal budget has been largely positive. The day after it was released, shares in a bunch of retailers were on a tear. JB Hi-FI, Harvey Norman and Dick Smith all recorded significant gains on Wednesday.
But it’s consumer reaction which companies like Winning Group, the organisation which has consumer white goods and electronics site Appliances Online, will be looking out for.
The first real-time read we get on consumer confidence post the budget will be on Tuesday with ANZ’s survey.
Links told Business Insider he’ll be watching closely which budget measures are passed, including the ability to immediately write-off assets, by the senate. But he said anything which bolsters consumer sentiment was good for business.
“Anything that helps consumer sentiment is a positive step forward and obviously there are some different policy changes around accelerated depreciation and tax cuts and so on, all of those help small business and also potentially drive an interest in electronic equipment,” Links said.
“We’re hopeful that the changes will get through and all these measures can go towards improving consumer sentiment.”
A lift in consumer sentiment directly impacts spending and thus the bottom line of companies like Winning and JB Hi-Fi because when people are comfortable with their position, they’re more likely to spend money.
“It encourages small businesses to invest and invest in their businesses. There may be different things that they have been holding off on due to the cost of them and this will give the opportunity to ‘have a go’ as the slogan says,” Links said.
“It’s probably something that has been neglected over the past couple of years.”