Last night the Coalition Government announced Federal Budget 2019-20.
With a strong focus on supporting tax incentives for medium-income earners and small business Treasurer Frydenberg has set the party's tone for the upcoming election.
What does this mean for businesses?
- The instant asset write-off rules have been given another face-lift. In January the government announced an increase to the instant asset write-off for SBE’s (Turnover less than $10m), to change the value of a loss-cost asset from $20,000 to $25,000, however, this has not been passed through parliament and therefore not yet legislated.
If legislated, businesses can claim assets “first used or installed ready to use” between January 29 to 7:30PM on 2 April 2019 under the $25,000 cap and then claim assets under the $30,000 cap for assets “first used or installed ready to use”after 7:30PM 2 April 2019 to June 30 2020.
Medium-sized businesses (Turnover greater than $10m but less than $50m) would only be able to claim eligible assets from 7.30pm 2 April 2019 until the 2020 cut-off.
- The suspension of interest rate rise equals job creation. This will hopefully curb the stagnation of the property market. The suspension of rates will also assist the proposed government infrastructure spending and job creation in the construction sector.
- One question we have is where the money is coming from? With proposed tax cuts and cash incentives, Frydenberg is projecting a surplus, where is the money coming from to pay for these stimulus incentives? One part of this equation does not belong. One possible source could be from the disability sector. With the slower growth in the disability sector, the Budget may be reallocating projected budget.
The Budget details a solid plan for economic stimulus but most of the actions need the Coalition to be seated for another two terms. In essence, the Budget sits as an election pitch and still needs to pass through both houses of parliament before being real for business owners.
On a closing note, we recommend you chat with your accountant regarding how these proposed incentives as we head into the new financial year 2019-20. If you need a good one, give us a call.
*We did ask Mel to comment on last night's budget... her answer: "I don't watch the budget, that's nerdy. I read the reports afterwards." If you missed out, you can book in to see one of our team for an update.
"I don't watch the budget, that's nerdy. I read the reports afterwards."
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