31 Jan 2023
One of the key Australian federal government initiatives for the small to medium-sized enterprise (SME) sector in the 2020 budget was the expanded asset write-off scheme.
The scheme aimed to, and has, supported businesses through the COVID pandemic by driving investment - allowing eligible businesses to claim an immediate deduction for the cost of an asset in the year it is first used or installed.
“My advice to any business looking to purchase an asset in this financial year is not to leave it until June. Get in early to avoid disappointment”
This scheme is set to expire at the end of this financial year. As 30 June approaches and supply chains open again for many asset classes, SMEs have a great opportunity to invest in their businesses and take advantage of the tax benefit.
Asset finance can help SMEs free up cash to drive other elements needed to grow the business, such as recruiting more staff, purchasing more stock or investing to improve agricultural yields. Whether it is a new van or fridge, header or tractor, asset investment can enhance to day-to-day operations into the future, not just a tax time.
Recent Australian Bureau of Statistics economic data indicate capital expenditure plans for 2023-2024 show an 11 per cent increase year on year confirming many SMEs intend taking advantage of the federal government package.
Demand for new motor vehicles in Australia remains strong despite interest rate rises. Car dealers say they continue to take more orders than they have vehicles to deliver. While there is a growing acceptance around waiting times for new cars, it does seem delivery delays have begun improving. As a result, there are also signs the second-hand vehicle market is starting to normalise.
Most new cars reported as sold in 2022 were ordered months, in some cases years, prior to delivery, as the global automotive industry continued to struggle with unprecedented demand in the wake of the pandemic.
Industry analysts say electric and hybrid cars will continue to experience rapid sales growth in Australia over the rest of the decade as more models become available, giving consumers a broader choice. Electric vehicles accounted for 3.1 per cent of total sales in the December quarter of 2022 and hybrid vehicles accounted for 7.6 per cent total sales for the year.
At ANZ we are supporting our customers to invest in their businesses and help them to manage the transition towards a low-carbon economy by partnering with Clean Energy Finance Corporation. The program is aimed at helping our customers invest in crucial assets to help them grow their business, in a sustainable way.
For the past five years ANZ has partnered with Clean Energy Finance Corporation (CEFC) to help support Australian businesses invest in emission reducing infrastructure that will be resilient to a changing climate.
ANZ’s small to medium sized business customers have access to a 0.50 basis point discount on their asset finance rate for eligible energy efficient related assets and projects.
This partnership is part of ANZ’s commitment to support its customers transition to net zero emissions by 2050.
Business interested in finding out whether their asset is eligible for discounted finance can find out more here: https://www.anz.com.au/business/loans-finance/buy-vehicles-equipment/
We are seeing many of our customers changing the way their businesses operate, moving towards a more sustainable future. Whether it be an electric truck or solar panels, we want to give Australian businesses access to finance, services and advice to invest in equipment which will help them decarbonise, shifting to low carbon business models that put them on a path to net zero emissions.
My advice to any business looking to purchase an asset in this financial year is not to leave it until June. Get in early to avoid disappointment the equipment may not be available in time or to leverage any available taxation benefits.
Cosi De Angelis, Head of Specialist Product at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
31 Jan 2023
12 May 2021