MYOB’s most recent SME snapshot found 60 percent of respondents thought the asset write-off was the number one priority for their business out of the Budget.
As widely tipped, the Government has elected to keep the $20,000 instant tax deduction in place for one more year – and the number of businesses that can access it has increased.
Instead of having the asset depreciate over a number of years, small businesses are now able to write off the depreciation immediately.
It means that small business are more likely to buy new equipment or technology, which can make them more efficient and help them grow.
In announcing his Budget to the Parliament, Treasurer Scott Morrison said this was about rewarding small businesses.
“Small business owners are out there fighting for growth in their businesses every day. They deserve our respect and support,” he said.
The definition of a small business has also changed to include businesses with a turnover up to $10 million. This vastly increases the number of businesses that can access the write-off.
While it would have been great to see the write-off extended beyond one year, it’s good that Australian small businesses can invest with some degree of certainty.
Accountants and advisors are also big fans of the write-off measure.
Before the Budget, The Pulse got in touch with three peak bodies about what their members (and their clients) would like to see out of the budget.
In short, they ranked the asset write-off highly.
“That policy was very good for SMEs, and I think there’s a good business case for it to be extended in the very least,” CPA’s Head of Policy, Paul Drum, told The Pulse.
“There was an injection into purchases and claims into businesses in that category, so there was a good economic flow-on.”
The policy was also applauded by The Institute of Public Accountants.
MYOB agrees that it’s definitely a policy that helps create more business success in Australia – but it would be great to see it made permanent.