Published 11-06-2020
| Article appears in June 2020 Issue

INSTANT ASSET WRITE-OFF EXTENDED

10-06-2020

The Federal Government has extended its Instant Asset Write-Off scheme for a further six months in response to the coronavirus pandemic.

The scheme, in which businesses that earn up to $500 million per year can write off new asset purchases worth up to $150,000, was due to end on July 1, but will now remain in place until the year’s end.

Treasurer Josh Frydenberg says the scheme will help recovering businesses weather necessary purchases as they return to work.

“(Businesses) will be able to go and purchase equipment or machinery tools up to a value of $150,000, as many times as they want, and then write it off,” he says.

“We’ve flattened the curve and people are getting back to work, and we want businesses to get back to doing what they do best – growing, innovating and hiring people across the economy.”

Businesses would be forced to deduct their assets’ depreciation over subsequent tax returns in the absence of the scheme.

The success to-date of the scheme is unable to be measured until tax returns are filed.

Chief executive of the national employer association Ai Group Innes Willox has praised the extension as “a sensible forward-looking measure”.

“Business investment has been inhabited in recent months both by the drain on cash inflows and the general level of uncertainty and the extension of this measure so that businesses have longer to put investment plans in place makes clear sense,” he says.

It’s hoped write-off extension will give an immediate potential boost to business investment over the next six months, particularly for businesses that had put investment plans on hold or are looking to reposition in the wake of the COVID crisis.

“The extension of the instant asset write-off provisions, together with the more generous investment incentives announced earlier in the year, will provide a welcome boost to business investment at a time of lagging productivity growth,” Willox says.

The move comes after Australia’s economy shrank 0.3 per cent in the March quarter, officially placing the country in a recession.

A more dramatic fall is expected for the June quarter.

RELATED NEWS

  1. The Waste Management and Resource Recovery Association of Australia (WMRR) has welcomed the Queensland government’s announcement that it will ban plastic microbeads, polystyrene packing peanuts and plastic-stemmed cotton buds by 1 September 2023, unveiling its proposed five-year roadmap to phase...
  2. To meet growing demand for Industrial IoT solutions, RS Components launched another 300 products in their RS PRO IoT range in June.
    Some of the products in the range are IO-link sensors, data cables and HMI displays, including antennas and network testing equipment. The company now offers over 8,...
  3. Clover Fields started in 1983 as a boutique business in the Blue Mountains and grew into a thriving factory and design centre which is now based an hour west of Sydney. It was the first company in Australia to replace animal tallow-based soaps with a pure vegetable base, striving to remain at the...