Instant asset write-off extended ahead of JobKeeper review outcomes

The Federal Government is continuing its support for small business by announcing the $150,000 instant asset write-off will be extended for another six months, to 31 December 2020.

Australian businesses with annual turnover of less than $500 million will be able to take advantage of the support to invest in assets that will aid business as the economy reopens and COVID-19 restrictions are eased.

The government expects these measures to aid over 3.5 million businesses. The instant asset write off is designed to help businesses stick to planned investments and encourage fast tracking investment to support economic growth in the near term.

The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000. Assets can be new or second hand and could include a truck for a delivery business among many other things.

Legislative changes will be made to give effect to this measure, which is estimated to have a cost to revenue of $300 million over the forward estimates period.

In addition, Treasurer Josh Frydenberg has confirmed the outcomes of Treasury’s wage subsidy review will be provided on 23 July 2020.

Following the announcement of a transitional agreement for the childcare sector in regards to JobKeeper, in a doorstop interview at Meccania Engineering in NSW, Mr. Frydenberg would not confirm or deny if JobKeeper would be wound back for other sectors.

He pointed out JobKeeper is legislated until September and highlighted the National Cabinet’s three stage process of easing restrictions which Treasury forecast to see 850,000 people back in work.

When asked by a journalist whether some sectors have bounced back in demand earlier than expected he pointed to construction, mining and agriculture.

“Well construction is one sector where we’re starting to see more activity. Mining has been working effectively through the crisis and again strong demand for our exports has been reflected in commodity prices. We’ve also seen agriculture be another sector,” Mr. Frydenberg said.

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