The tax relief, which comes as part of the government’s $42 billion economic stimulus package announced last week, includes an investment tax break for all Australian businesses which is designed to help boost business investment, bolster economic activity and support jobs. Komatsu said that under the government’s plan which still has to pass through the Senate businesses such as civil contractors, quarries, plant hirers and owner-operators will be able to claim a bonus deduction of 30% for eligible assets. These include earthmoving and construction assets and other capital equipment costing $10,000 or more. To be eligible for the investment allowance, businesses must:acquire or start to hold the equipment under a contract entered into between December 13, 2008 and the end of June 2009; andhave it installed ready for use by the end of June 2010.For eligible assets purchased between July 1, 2009 and December 31, 2009, the bonus deduction drops to 10%. These deductions are on top of the usual capital-allowance deduction claimable for the asset as part of a business’s income tax return. As an example, under the 30% business tax break, a piece of equipment costing $200,000 will be eligible for a deduction of 30% of that $200,000 – or $60,000. At the standard company tax rate of 30%, that would equate to a reduction in tax for the 2008-09 financial year of $18,000. “The federal government’s 30% business tax break presents an excellent opportunity for contractors, plant hirers and quarry operators to purchase equipment, and gain significant reductions in their tax for this current financial year,” said Sean Taylor, general manager of construction for Komatsu Australia. Unions have also backed the stimulus package, with the ACTU criticising the Coalition’s opposition to the package. The ACTU said the $42 billion package would provide an immediate shot in the arm to business and consumer confidence, create and sustain employment, provide valuable infrastructure for schools and housing, and help reduce carbon emissions. But the latest stunt by Malcolm Turnbull puts all that at risk, ACTU president Sharan Burrow said. “The Coalition’s hasty rejection of the package threatens workers’ jobs in the name of political opportunism,” Burrow said. Representatives from the ACTU and the union movement last week called on the government to include labour market measures in a further stimulus package that required business to retain, retrain and upskill staff, including apprentices. Komatsu’s general manager said the stimulus package presented a very good stimulus for the industry at a much-needed time. “Therefore, customers who are looking to tender for infrastructure-related work in the coming months would be well-advised to look closely at this ‘one-off,’ short-term opportunity to purchase equipment and obtain a significant tax deduction,” said Taylor.
