Budget bonus a boost for small business
SMALL business hasn't exactly been in the headlines when it comes to coverage of the Prime Minister's latest rescue package.
But the good news is that the Federal Government has pledged an investment tax break worth $2.7 billion for all Australian businesses.
A small business that buys and installs a $2000 computer before the end of June can claim an additional $600 deduction in its 2008/9 tax return.
A business that buys and takes possession of, say, a $60,000 backhoe, by the end of June can claim an additional $18,000 deduction in its tax return.
Small businesses can claim an additional 30 per cent tax deduction for eligible assets costing $1000 or more that they acquire from December 13, 2008, to June 30, 2009, and install by June 30, 2010.
For eligible assets costing $1000 or more that they acquire from July 1 to December 31, 2009, they can claim an additional 10 per cent deduction where they are installed by December 31, 2010.
To benefit from this tax break a small business must have a turnover of $2 million a year or less.
Federal Small Business Minister Dr Craig Emerson has explained the new policy.
“If a small business spends more than $1000 on some office equipment or factory equipment, then in addition to the depreciation they can claim, they can claim a 30 per cent tax deduction. That reduces the cost of buying that equipment,” he said.
“It's designed to therefore encourage more investment by small businesses; maybe bring some forward; maybe do some things they otherwise wouldn't have.
“That means more cash in the pockets of those business owners and more support for the employees working with them.”
The Minister has also welcomed moves by the Westpac and Commonwealth banks to reduce business lending rates.
“This is a positive move at a time when small businesses are really looking to stay viable and retain staff. I strongly urge other banks to do the same,” Mr Emerson said.