Small and medium businesses look set to benefit from an expanded instant asset write-off scheme announced by Treasurer Josh Frydenberg during last week’s Coalition Budget Announcement.
Mr Frydenberg said the Government was increasing the instant asset write-off threshold from $25,000 to $30,000 per asset.
Director of Operations at leading businesses for sale portal AnyBusiness.com.au, Mary Tamvakologos, said purchasing big-ticket items such as cars, computers and other essential office equipment had until now been a significant financial burden for small businesses.
“The instant asset write-off incentive should be a permanent addition to the taxation system to ensure all small businesses are able to purchase necessary assets when needed,’’ Mrs Tamvakologos said.
Eligibility for the scheme has also been expanded from small businesses (up to $10 million in annual turnover) to medium-sized ones (up to $50 million).
In addition, up to 80,000 new apprenticeships are expected to be introduced over the next five years, according to Mr Frydenberg.
Apprentices, including bakers, bricklayers, carpenters and plumbers, will receive a $2000 payment, with incentive payments to employers doubling to $8000 per placement.
Mrs Tamvakologos said the $8000 apprentice placement fee was a fantastic opportunity for small businesses to expand.
“The funding will almost certainly ease the pressure of the additional wages and training associated with putting on a new staff member and will assist small businesses to maintain production/activity throughout the induction process,” she added.
This will cost the Government $400 million over the next four years.
The Upshot for Individual Taxpayers
The ‘win’ for small to medium businesses comes on top of the Government spruiking $158 billion in additional tax relief for taxpayers.
Taxpayers earning up to $126,000 per year are set to receive immediate tax relief — if the Coalition stays in government and it can secure the support of the Senate.
The maximum amount of the low-income tax offset will increase from $530 to $1080 annually, and the base also increases from $200 to $255.
Labor has been supportive of tax benefits for lower income earners, so this has a good chance of passing Parliament, according to experts.
More than 10 million Australians will benefit, though only 4.5 million will receive the full amount.
High-income earners are also set to benefit under a separate change, albeit far into the future.
All taxpayers earning between $45,000 and $200,000 could have their tax rate reduced from 32.5 per cent to 30 per cent.
That means 94 per cent of taxpayers would pay no more than 30 cents in the dollar.
Microscope on ‘Big’ Business
The Government will tighten the screws on ‘big’ business with $3.6 billion in extra revenue from multinationals and high-wealth individuals expected from a billion-dollar investment in the Tax Avoidance Taskforce.
This investment means the taskforce can increase its scrutiny of specialist tax advisers and intermediaries that promote tax avoidance schemes and strategies.
The Government will also provide $42 million over four years to the Tax Office to increase activities to recover unpaid tax and superannuation liabilities.