Government extends instant asset write off for six months to support businesses

The expansion of the Instant Asset Write-Off scheme was announced in the early days of the pandemic in March, in an attempt to help businesses survive through the crisis.

Businesses making up to $500 million per year will be allowed to continue writing off newly purchased assets worth up to $150,000 for the next six months.

Previously, the scheme was open to businesses making $50 million per year to write off purchases up to $30,000.

Treasurer Josh Frydenberg said the scheme, which was set to end on July 1, will now remain in place until the end of the year.

"We do know that there are businesses that are ready to invest right now," Mr Frydenberg said.

"When the restrictions are eased and people are back at work, our cafes and restaurants will be busy.

"Our hotels will have occupants again and our businesses will be able to export and import again, and they need the equipment and they need the machinery."

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Advertisement

High Interest Savings Account (<$250k)

Product Features

• Bonus rate for the first 4 months from account opening
• No account keeping fees
• No minimum balance

Total interest earned$499

4.00 % Base interest rate

5.45 % Max interest rate

Intro rate for

4

then

4.00%

More details

Without the scheme in place, businesses would have to deduct the depreciation of their purchased assets in their tax returns.

But with the scheme in place, eligible businesses can deduct the full cost of purchases, up to $150,000, from the tax they pay in the financial year they purchased the asset.

The Government said 3.5 million businesses would benefit from the scheme when they first announced the expansion, but Mr Frydenberg said it wasn't possible to provide information on the actual take-up of the scheme,

"Hundreds of thousands of businesses have taken up the program in its previous format," he said.

"We will see that level of take-up once the end of the financial year arrives."

Deputy Labor Leader Richard Marles told Sky News the extension was just common sense.

"The idea that this was going to stop at the end of June was always ridiculous, so it's good that the Government has seen sense here and that this is being extended through to the end of the year," Mr Marles said.

"It's a good step in the right direction and so the Government deserves to be applauded for it."

Federal Chamber of Automotive Industries (FCAI) Chief Executive Tony Weber also commended the decision and said the automotive industry was suffering greatly from the pandemic.

“New car dealerships in Australia employ more than 60,000 people nationally and are significant contributors to community and regional economic growth through employment, training, and philanthropy," Mr Weber said.

“It’s great to see the Federal Government’s support for these small businesses through a number of initiatives such as JobSeeker and JobKeeper, and now through the extension of the instant asset write-off program."