Speaking to Accountants Daily, Sequel CFO chief executive David Boyar said the instant asset write-off is “a gadget benefit”, where businesses walk into retailers and buy gadgets with the write-off
Further, Mr Boyar noted that any well-run business will have a cash flow forecast that has a certain amount of capital expenditure budgeted.
“If you spend $20,000 cash now, you get tax deductions – so 30 percent of that now instead of over three or four years. Most businesses, unless they plan for it, don’t have that cash flow to go with that, and just blow on fixed assets,” Mr Boyar said.
“It’s great for retailers. I don’t know how good it is for small business.”
A recent KPMG report measuring sentiment from mid-market firms regarding certain issues before the federal budget found that 69 per cent hadn’t utilised the increased instant asset write-off threshold.
Twenty per cent said they invested their savings into new equipment or technology, while 5 per cent said they invested the savings on improvements to the premises.
Another 5 per cent said they hadn’t invested the savings back into the business.
Instead, Mr Boyar said he would rather see the upcoming federal budget address actual pain points of business owners revolving around keeping up with PAYG and superannuation payments as they grow.
“Why not allow pre-approved funding for tax payments while businesses are growing? Why not give them a hiatus on some of the payments that they need to make while the business is growing?” the CEO suggested.
“Because that’s what actually causes them to fail, not a lack of fancy new computers.”