The Morrison Government has announced a $17.6 billion economic plan in response to the challenges posed by the coronavirus. A media release from the Prime Minister’s office yesterday explained the plan is to keep Australians in jobs, keep businesses in business and support households in the Australian economy.
The targeted stimulus has a number of elements focused on helping 3.5 million businesses across the country that employ more than 9.7 million employees, or three in every four workers.
Instant asset write-off threshold increase
The Government announced $700 million to increase the instant asset write-off threshold from $30,000 to $150,000. This increase has been extended to include businesses with an aggregated annual turnover of up to $500 million. The instant asset write-off increase and expansion is now in place and will be until June 30 2020.
As a result, many assets purchased from now until June 30 2020 that would have previously been depreciated over their effective life or in a small business pool, will now be written-off immediately. Here are some examples of assets that business owners will now be able to write-off:
- Industrial gantry cranes: $120,000
- Air-conditioning large office: $100,000
- Cool room in pub: $80,000
- Farmer tractors: $70,000
- Mechanic Spray booth: $50,000
15-month investment incentive
$3.2 billion was announced to encourage business investment by introducing a fifteen-month investment incentive set to expire June 30 2021.
The incentive will support business investment and economic growth by accelerating depreciation deductions for remaining assets not affected by immediate write-off changes. Businesses with a turnover of up to $500 million will be able to deduct fifty per cent of the asset cost, plus an additional amount of the standard depreciation on the remaining balance, in the year of purchase.
Business cash flow assistance
In addition to the depreciation and investment incentives, the Government has also announced funding to further support employment and businesses who employ apprentices and trainees.
$6.7 billion will be dedicated to boost cash flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. This tax-free cash flow boost will support businesses with a turnover up to $50 million that employ staff between 1 January 2020 and 30 June 2020.
$1.3 billion will be dedicated to support small businesses and the jobs of their apprentices and trainees. Eligible employers will be able to apply for a wage subsidy of 50 per cent of the apprentice’s and trainee’s wages from 1 January 2020 to 30 September 2020.
What the stimulus means for business owners
It’s clear that the Government is serious about supporting Australian business through the coronavirus pandemic. This stimulus will allow business owners to further maximise their cash flow with the immediate asset write-off increase and expansion, and by claiming higher depreciation deductions sooner.
To ensure they take advantage of the stimulus, business owners and tenants must have a comprehensive tax depreciation schedule. BMT Tax Depreciation has been the business owner’s choice for over the past twenty years. To learn more, Request a Quote or contact our expert team on 1300 728 726.