Asset Write-Offs, Business Concessions, Cash Handouts and Tax Cuts: the start of a slow climb to return to surplus
06 October 2020
The 2020 Budget has delivered a slew of stimulus measures for households and businesses as the Government prepares for the start of a slow climb to return the budget to surplus.
Mark Molesworth, Tax Partner at BDO Australia said Federal Treasurer Josh Frydenberg, had delivered a budget that went back to basics to deliver a boost to the economy which is in its first recession in almost 30 years.
“The Treasurer has delivered a budget with a focus on the ABCs:
- A is for Asset Write-Offs – businesses with a turnover up to $5 billion will be able to deduct the full cost of eligible new capital assets. For small and medium sized businesses, second-hand assets will also be covered.
- B is for Business Concessions - loss carry back provisions for businesses (up to $5 billion turnover) to offset current losses on to previous tax paid.
- C is for Cuts to Personal Tax Rates - personal income tax cuts will be backdated to July 1, 2020, putting $12 billion into the pockets of Australians; and
C is also for Cash Handouts – two lots of $250 payments (December 2020 and March 2021) to pensioners and some other welfare recipients to stimulate the economy.
“The budget has also brought good news for:
- Young Aussies looking for work - with the announcement of JobMaker, a hiring credit / direct wage subsidy to those under 35 and made to businesses taking on young Australians who have been forced on to JobSeeker during the COVID-19 pandemic.
- Innovative businesses - with a paring back of the changes to Research and Development Tax Incentives
- Inter-generational Families – with Capital Gains Tax concessions on Granny Flats.”
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2020-21 FEDERAL BUDGET