The Morrison Government will deliver significant tax and investment incentives as part of their Economic Recovery Plan for Australia to create jobs, rebuild the economy and secure Australia’s future.
Dr Fiona Martin MP welcomed Treasurer Josh Frydenberg to one of Reid’s most iconic businesses, Pasticceria Papa in Five Dock, to discuss how the 2020-21 Budget will back local businesses.
“Around eight in every 10 Australians are employed in the private sector, so when we support our local businesses, we’re supporting job creation and economic activity,” Dr Martin said.
“Businesses like Papa’s are the engine room of our economy and backing them is a part of the Morrison Government’s plan to recover from the COVID-19 recession.”
Treasurer Josh Frydenberg said that Pasticceria Papa’s owner, Mr Salvatore Papa, typified the story of migrant business owners across Australia.
“Salvatore came to Australia in 1987 from Italy. As a baker, he set up a small business with just one staff member. Today, he employs more than 170 Australians and supplies more than 750 shops around the state,” Treasurer Frydenberg stated.
“This Budget delivers for Salvatore and it delivers for millions of small businesses right across the country.”
Building on the successful expansion of the instant asset write-off in their response to COVID-19, the Morrison Government will now allow 99 percent of businesses to write off the full value of assets they purchase.
Businesses with a turnover of up to $5 billion will be able to immediately deduct the full cost of eligible depreciable assets acquired from 7:30pm (AEDT) on 6 October 2020 and first used or installed by 30 June 2022.
“This will unlock investment, expand the productive capacity of the nation and create tens of thousands of jobs,” Treasurer Frydenberg said.
The Government will also temporarily allow companies with a turnover of up to $5 billion to offset tax losses against previous profits on which tax has been paid.
“Normally, businesses would have to return to profit before they can use their losses, however, these are not normal times,” Treasurer Frydenberg said.
“This will provide a targeted cash flow boost that businesses across Australia desperately need.”
Losses incurred to June 2022 can be offset against prior profits made in or after the 2018-19 financial year.
The Government is also providing $105 million in tax relief to expand access to a range of small business tax concessions by lifting the aggregated annual turnover threshold for these concessions.