An extension of previous policy, small and medium businesses can now avail themselves to the $30,000 asset write-off, up from $20,000 for FY19 (and a further improvement on the Coalition’s announcement in January of their intent to increase the threshold to $25,000). In short:
The policy has also been expanded to businesses with up to $50 million turnover – previously it was limited to turnover of $10 million or less.
The write-off applies on a per asset basis and hence can be applied to multiple assets.
A small business that spends $40,000 on two new assets (cost of $20,000 each) will receive a tax benefit of $11,000 at year-end.
The intent is to keep business spending at a time where business investment has been subdued. As Frydenberg noted, it allows “a cafe to get a new fridge or grill, a plumber to buy new tools or a courier a new van”. This is all well and good, but if business doesn’t have access to capital then it is a moot point, and following the Royal Commission there has been a moderation in lending to small and medium enterprise.
Short of making this policy a permanent fixture, this is available to business from now until 30 June 2020.