Daily Bulletin

Men's Weekly

.

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

In its latest move to spur business investment, the government will extend its $150,000 instant assets write-off until the end of the year.

The six-months extension, which will be legislated, will cost $300 million in revenue over the forward estimates.

As part of the government’s pandemic emergency measures, in March it announced that until June 30 the write-off threshold would be $150,000 and the size of businesses eligible would be those with turnovers of under $500 million.

Read more: Free childcare ends July 12, with sector losing JobKeeper but receiving temporary payment

The government is battling a major investment slump. Bureau of Statistics capital expenditure figures show non-mining investment fell 23% in the March quarter and 9% over the year to March.

Spending on plant and equipment fell 21%, spending on buildings and equipment plunged 25%.

Apart from giving businesses generally more time to claim the write-off, the government says the extension will help those which have been hit by supply chain delays caused by the pandemic.

The write-off helps businesses’ cash flow by bringing forward tax deductions. The $150,000 applies to individual assets – new or secondhand - therefore a single enterprise can write off a number of assets under the concession.

With rain breaking the drought in many areas, farm businesses are getting back into production, so the government will hope the extension will encourage spending on agricultural equipment.

About 3.5 million businesses are eligible under the scheme.

Read more: Morrison's coronavirus package is a good start, but he'll probably have to spend more

The instant asset write-off has been extended a number of times over the years, and its (much more modest) thresholds altered.

On the government’s revised timetable, from January 1 the write-off is due to be scaled down dramatically, reducing to a threshold of $1000 and with eligibility being confined to small businesses – those with an annual turnover of below $10 million.

But there will be pressure to continue with more generous arrangements, to head off the danger of a fresh collapse in investment.

In a statement, treasurer Josh Frydenberg and small business minister Michaelia Cash said the government’s actions “are designed to support business sticking with investment they had planned, and encourage them to bring investment forward to support economic growth over the near term”.

Businesses get extension for instant asset write-off Commonwealth Government

Authors: Michelle Grattan, Professorial Fellow, University of Canberra

Read more https://theconversation.com/businesses-get-extension-for-instant-asset-write-off-140289

Business News

How to Extend the Lifespan of Your Conveyor System

It’s easy to forget your conveyor is even there, until it stops. And when it does, you’re in a world of delayed orders, unexpected downtime, and one very expensive headache. But the good news is tha...

Daily Bulletin - avatar Daily Bulletin

Virtual CFO Hiring Checklist: 10 Expert Tips in Australia

Hiring a Virtual CFO (VCFO) is no longer just reserved for large corporations. In today’s business environment, where agility, compliance, and strategic foresight are essential, Australian startups...

Daily Bulletin - avatar Daily Bulletin

Top Mistakes to Avoid When Hiring Office Removalists in Perth

Moving a workplace is more than shifting workstations and computers; it is a complex project that can affect staff morale, customer service and revenue if it goes off-track. Perth’s commercial prope...

Daily Bulletin - avatar Daily Bulletin

LayBy Deals