# Economic stimulus package announcement by the Prime Minister and Treasurer



## Jack Malarkey (Jan 11, 2016)

https://www.pm.gov.au/media/economic-stimulus-package
MEDIA RELEASE

12 Mar 2020

Prime Minister, Treasurer

Extract:

Delivering support for business investment

$700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.

$3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

These measures start today [Thursday 12 March 2020]...

Jack Malarkey comments:

These changes will require legislative amendments. We can expect that passage of the amending legislation through Parliament will be expedited.

Parliament is due to sit from Monday 23 March 2020 to Thursday 26 March 2020 ahead of a recess until Tuesday 12 May 2020 (Budget day): https://www.pmc.gov.au/sites/default/files/publications/parliamentary-sittings-2020-final-2.pdf.

The Government has relevantly advised:

'PACKAGE IMPLEMENTATION

'The Government will move quickly to implement this package. To that end, a package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament's urgent consideration and passage.

'Following passage of the Bills through Parliament, the Government will then move to immediately make, and register, any supporting instruments'.

(https://treasury.gov.au/sites/defau...view-Economic_Response_to_the_Coronavirus.pdf)

For the increase in the instant asset wrriteoff threshold to $150,000, keep in mind that the car depreciation limit of $57,581 (for 2019-20) still applies: https://www.ato.gov.au/Business/Dep...tions/?page=3#Car_cost_limit_for_depreciation.

Of interest will be additional detail of the assets eligible for the investment incentive. Previously, the eligibility requirements for investment allowances in Australia have excluded passenger motor vehicles and have applied only to new (not second-hand) assets.

See also https://treasury.gov.au/sites/defau...view-Economic_Response_to_the_Coronavirus.pdf.


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## Jack Malarkey (Jan 11, 2016)

The car depreciation limit also limits GST credits: https://www.ato.gov.au/Business/GST...-and-transport/GST-and-motor-vehicles/?page=2.


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## Jack Malarkey (Jan 11, 2016)

The proposed amendments were introduced into the House of Representatives on Monday 23 March 2020 in the Coronavirus Economic Response Package Omnibus Bill 2020:










(https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results?__VIEWSTATEGENERATOR=20B6B7A5&st=2&sr=0&q=Coronavirus+Economic&ito=1&expand=False&drvH=7&drt=2&pnu=46&pnuH=46&f=02/07/2019&to=23/03/2020&pf=dd/mm/yyyy&pto=dd/mm/yyyy&bs=1&pbh=1&bhor=1&pmb=1&g=1&ps=10)

Bill: https://parlinfo.aph.gov.au/parlInfo/download/legislation/bills/r6521_first-reps/toc_pdf/20044b01.pdf;fileType=application/pdf#search="legislation/bills/r6521_first-reps/0000"

Explanatory memorandum: https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r6521_ems_84ea9dda-1a44-44b8-878b-68c376cbed56/upload_pdf/734816.pdf;fileType=application/pdf#search="legislation/ems/r6521_ems_84ea9dda-1a44-44b8-878b-68c376cbed56"

The proposed amendments to the instant asset write-off are in Schedule1 (with explanation in chapter 1 of the explanatory memorandum).

The proposed amendments to introduce the investment incentive are in Schedule 2 (with explanation in chapter 2 of the explanatory memorandum).

The investment incentive does NOT exclude passenger motor vehicles (unlike previous investment allowances) but it DOES exclude second-hand assets.

Paragraph 1.11 of the explanatory memorandum states:

'From 1 July 2020, the instant asset write-off is due to revert to $1,000...'.

It will be of interest whether the Government at some point foreshadows an extension of the instant asset write-off with a high threshold beyond 30 June 2020.

Usually, that kind of announcement would form part of the annual Budget in May but the Budget will now be delivered in October 2020.

I expect there will be some form of extension but this can't be guaranteed. The Government is likely to delay making any such announcement as it is trying to have taxpayers make capital investments in depreciating assets this financial year rather than next.


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## Jack Malarkey (Jan 11, 2016)

The Bill has passed the House of Representatives and is now before the Senate.


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## Jack Malarkey (Jan 11, 2016)

The Bill has been passed by both Houses and will become law once it receives Royal Assent, which is expected very soon.


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## Krusty (Jan 26, 2018)

Father Christmas is out of a job.


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## Jack Malarkey (Jan 11, 2016)

These measures are now law, having received Royal Assent.


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