The small businesses tax benefit will be extended for six months when the Morrison Government promises $300 m to enable companies to invest.
With the parliament resuming on Wednesday, the government will introduce changes that will prolong the existence of a law that enables small companies to write off the value of properties of up to $150,000 per object indefinitely.
Small businesses affect the economy
It is the latest in a series of announcements of smaller economic stimulus measures, including last week’s $688 million package offering grants to eligible individuals and couples planning to build or renovate homes – a plan that Labor vowed to scrutinize in the forthcoming parliamentary session.
The government reports that as many as 3.5 m firms have an average turnover of less than $500 m and are thus into benefit from the expansion of the immediate asset write-off . Even if it is uncertain how many would ultimately benefit from it.
Assets will either be in use or active ready to use by 31 December – extending the cut-off of 30 June. Which was part of one of the first major stimulus packages that came out in March. Trucks and tractors are among examples of qualifying properties.
The treasurer, Josh Frydenberg, said the expanded timeline would enable businesses to invest in infrastructure. To sustain their company as the economy resumed and safety pressures on coronavirus began to ease.
“They designed them to support businesses that stick to the investment they had planned. Also encourage them to move forward with investment to support economic growth in the near term”. Frydenberg in a joint statement with the Minister of Employment, Michaelia Cash said.
They also said the move – to cost $300 m over the budget cycle. It would also help improve corporate cash flow by making tax deductions come forward.
Over the fortnight parliament the government is also likely to face questions over its decision. To reintroduce childcare fees from July 13. In the wake of worries over a potential drop-off in enrollment once the rates are up.