BUDGET NEWS
asset boost
Businesses will be able to count the costs of buying and repairing depreciable assets as an expense up until June 30, 2022, under a new budget measure
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Left: The cost of some depreciable assets can be written off as a tax expense up until June 30, 2022, under the new policy
n extension of the instant asset write-off program was one of a series of generous business tax concessions made in this year’s budget. Treasurer Josh Frydenberg says the policy change will help kickstart activity in the private sector – expanding Australia’s productive capacity and creating new jobs. “Businesses with a turnover of up to $5 billion will be able to immediately deduct the full cost of eligible depreciable assets acquired from 7:30pm (AEDT) on 6 October 2020 and first used or installed by 30 June 2022,” he says. The policy, which does not cover mining businesses, has no limit on the value of assets eligible for full expensing.
The measure is estimated to apply to around $200 billion-worth of investment and will cover around 3.5 million businesses, which the government says is over 99 per cent of the businesses currently operating in Australia. This significantly builds upon the enhanced $150,000 instant asset write-off and the Backing Business Investment measures introduced on March 12, 2020 as part of the government’s response to COVID-19. Budget documents say the cost of improvements to existing eligible depreciable assets made during this period can also be deducted in full. Tractor and Machinery Association of Australia executive director Gary Northover says he is pleased to see a continuation of the instant asset write-off program, which he says has driven sales of agricultural equipment since it was announced earlier in the year. “Obviously the weather has been a big driver of the uptick in our industry in recent months, but the instant asset write-off has also had a major impact,” he says. “It looks very much like it will be good news for our industry.”
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