The Federal budget not only affects all Australians but also foreigners wanting to either work or invest in Australia.
The labour-intensive horse industry relies on energetic workers from abroad to assist at Stud farms, racing stables and on the track. Unfortunately, it seems the 457-visa regime has been largely rebranded and could see employers across Australia in all industries pay $1.2 b more over four years for visas for temporary foreign workers.
Rest assured Thoroughbred Breeders Australia are working very hard to try to influence the political landscape concerning foreign workers. A number of stringent changes were also announced relating to foreign investment in Australia, mainly specific to residential property.
We see this as a boost to the thoroughbred industry as many internationals want exposure to Australian assets, thoroughbreds being a legitimate, alternative asset class. For some time now Australia has enjoyed increased participation from global horse conglomerates partly because of the quality of our bloodstock and robust prizemoney and healthy industry generally. Investors from America, Europe and Asia are having an increased, permanent presence in Australia. There is also a bit in this Federal Budget worth noting for the locals in the horse industry, including extension of the $20k immediate deduction for acquisition of plant and equipment. It is also very pleasing to see the Research & Development (R&D levy) for thoroughbreds is to recommence on 1 July 2017 and to be formally announced in this week’s Budget.
Again, Thoroughbred Breeders Australia should be commended for ensuring this much needed levy becomes a permanent investment (approximately $1m per annum) to assist the thoroughbred industry to mitigate risks and improve productivity. Finally, the overall economic outlook appears positive but so it should after a decade of lacklustre growth and opportunity. In a universe not that far away, the Australian thoroughbred industry has boasted very strong growth since 2009. If we take Australia’s 3 majors (AEYS, MMGC and MPYS) gross revenue from the main yearling sales this year of approx.. $298m (2009: $179m), with an average selling price this year of $210k (2009: $138k). The industry appears to be very resilient, albeit polarising at the high middle and top end. If you need advice on any measures announced in this Budget Summary, please contact Stable Financial.