COSBOA is very positive about the Opposition leader Bill Shorten’s announcement today on the proposed Australian Investment Guarantee where all businesses in Australia would be able to immediately deduct 20 per cent of any new eligible asset worth more than $20,000, with the balance depreciated in line with normal depreciation schedules from the first year.
Peter Strong, CEO of COSBOA said “Labor’s announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.”
COSBOA is aware that the average annual investment of Australian businesses (big and small) is around $25,000 which means that the associated average annual tax saving to business owners will be in the order of $6,000 per year.
Mr Strong added “This would be a very welcome move, any extra money can be invested into the business or in jobs. Our members look forward to hearing more about Labor’s total approach to business taxation, including extending the recent small business tax cuts to bigger businesses, many of whom buy products and services from small businesses. It should be noted we do not consider this proposal to be a substitute for tax cuts for all businesses.”
Mr Strong further added “on the issue of the withdrawal of the cash payments resulting from dividend imputation, the members I have spoken to are more concerned about the complexity of the current system and the attack on self-managed super funds that are often used by the self-employed. If nothing else the focus from Labor on negative gearing, capital gains tax reform, fiddling with discretionary trusts, and putting a cap on the deductibility of managing tax affairs along with cash payments through dividend imputation shows we need to confront tax reform not fiddle around with confusing and abstruse tax complexities.”
Further information on the Australian Investment Guarantee can be found HERE
Further information on the ending cash refunds for excess imputation can be found HERE