Capex Allowance Expanded to Institutional Enterprises
(24 November 2020 – Australia) Institutional enterprises will now also be eligible to access the Australian government’s ‘instant expensing’ capital expenditure (capex) measure as it seeks to kick start business investment, reduce unemployment and speed up the recovery in GDP following the COVID 19 pandemic.
Under the new provision, assets must be acquired after 25 November 2020 and be first used by eligible firms before the end of financial year 2021/22. Assets covered by existing depreciation rules are covered and buildings remain excluded. It now covers 3.5 million enterprises, employing 11.5 million workers, A$200 billion worth of investment and importantly 80 percent of investment in depreciable assets by non-mining firms. SMEs with annual turnover under A$10 million will be allowed to deduct the balance of their simplified depreciation pool at the end of the financial year under full expensing provisions.
“This change will provide businesses with more flexibility in respect of these measures, removing a potential disincentive for them to take advantage of these incentives. It will unlock investment. It will dramatically expand the productive capacity of the nation and create tens of thousands of jobs” stated Treasurer Josh Frydenberg.
"This will boost the order books of the nation. Every sector of our economy, every corner of our country, will benefit. This is how we will get Australians back to work” added Mr Frydenberg.
Fieldwork is currently underway for East & Partners Asset & Equipment Finance program, capturing forward dated asset finance growth expectations, product usage and broker experiences across ten asset types.