Small business tax breaks extended until 2020
Small businesses will get an extra tax break with the Morrison government again extending the instant asset write-off to mid-2020.
The tax break will also be lifted immediately to cover assets worth up to $25,000, up from $20,000, Prime Minister Scott Morrison announced on Tuesday.
“Businesses who go out and invest today, whether it’s a vehicle, whether it’s a piece of plant or equipment, all of it, up to $25,000 immediate write down,” he told an audience in Brisbane.
“We are so serious about small and family businesses and we have put our money where our mouth is.”
This is the third year-long extension to the measure, which was set to finish at the end of the current financial year.
It allows firms with a turnover of up to $10 million a year to instantly claim tax deductions on all equipment purchases worth less than $25,000.
Mr Morrison said it would mean more than three million eligible small and family businesses could keep $750 million of their own money and reinvest it in their business and support the jobs and wages of their 5.7 million employees.
The change needs legislation, which the government intends to pass once parliament returns in February.
The National Retail Association has welcomed the change, saying it will make life easier for business owners and boost purchasing activity.
NRA chief executive Dominique Lamb said she expects this change to encourage business owners to make purchasing decisions that may have otherwise remained in the planning phase until the next financial year.
“[We] know that many retail businesses have taken advantage of the $20,000 instant write-off for business assets. We believe this increase will allow them to invest further in their business and support their staff with new systems and equipment,” Lamb said.
“This will be a very welcome boost to retail coffers in the coming months, and we encourage both sides of politics to lock in behind the increased limit and timeframe.”
The Australian Chamber of Commerce and Industry chief executive James Pearson said that, while an extension to 2020 is a good start, the measure should ultimately be made permanent – a change the Labor party has announced it would make if elected.
“Making the instant asset-write off permanent will encourage longer-term investment planning by small businesses and will support continuous and sustainable business growth,” Pearson said.