In the midst of the current global economic downturn, the Australian Government is providing significant stimulus to the domestic economy by providing some attractive incentives and initiatives for businesses in Australia.
These incentives and initiatives are as follows:
- $4.7 Billion Nation Building Package
The Government has announced a $4.7 billion nation building package to strengthen the Australian economy and create Australian jobs. The package is a timely investment in road, rail, and education infrastructure. The three key infrastructure elements in the package are to inject $1.2 billion in new funds into the Australian Rail Track Corporation, bring forward $711 million in road spending to current and next financial year, and invest $1.6 billion in critical university and TAFE infrastructure.
- Additional investment allowance
Australian businesses are eligible for an additional tax deduction of 30 per cent for new eligible assets acquired before 30 June 2009 and installed ready for use before 30 June 2010. For new eligible assets acquired between 1 July 2009 and 31 December 2009 and installed ready for use before 31 December 2010, the businesses are eligible for an additional tax deduction of 10 per cent.
Small businesses (with turnover of less than $2 million a year) will be able to claim the additional tax deduction for eligible assets costing $1,000 or more, while for non-small businesses, a minimum expenditure threshold of $10,000 applies. This investment allowance will stimulate capital investment by businesses.
- Australian Business Investment Partnership
The Government, in consultation with the four major Australian banks, will set up a $4 billion Australian Business Investment Partnership (which can expand to $30 billion), whereby the banks will provide $2 billion and the Government another $2 billion. These funds will provide financial support for major commercial property projects, including shopping centres and factories where foreign banks are refusing to rollover their finance to those projects.
Australian Business Investment Partnership will stimulate the confidence of the investors who have interests in commercial property projects by minimising refinancing risk.
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