Recently announced, the Government’s $17 billion stimulus package will include tax breaks and subsidies for businesses over the next four years, including a massive expansion of the Instant Asset Tax Write-off.
Potentially the most important news for small-to-medium business owners is the expansion of the Instant Asset Tax Write Off. This has been raised from $30,000 to $150,000 and will now be available for businesses with a turnover of up to $500 million instead of $50 million, meaning much larger companies will now be able to access the concession.
The Instant Asset Tax Write-off is considered a critical stimulus initiative and an important component to assist businesses prepare for increased demand when the economy inevitably bounces back.
For most small and medium businesses this will effectively reduce the cost of an investment in machinery by 27.5% by way of a direct tax benefit.
The Government has also set a range of initiatives to assist businesses, with the aim of keeping at-risk workers employed.
Chief among these employees are apprentices and trainees, for whom the Government will offer up to $7000 per quarter to businesses that support them.
These subsidies are expected to reach around 117,000 junior workers and will total around $1.3 billion. Beyond this, businesses with of turnover of less than $50 million will also receive a tax-free payment of between $2000 and $25,000 to ease predicted cash flow problems. This is likely to help keep the doors open for 700,000 small-to-medium businesses, keeping more than 7.5 million workers employed.