Interview with Money News, 2GB
JOURNALIST: Tax time is rapidly approaching, actually we are already a week into June. That means that time is running out for business owners to get their tax affairs in order, however, businesses looking to buy a big ticket item have now been given an extra six months to pull the trigger. That's because the Federal Government today announced it will extend the $150,000 instant asset write-off for six months until the 31st of December this year. So, what that means for business owners is that if they're thinking buying something like a new work ute or invest in some equipment that could be delivered by June 30, they now have got more time to instal it and get it up and running.
Senator Michaelia Cash is the Minister for Employment, Skills, Small and Family Business and she joins me this evening on Money News. Senator Cash, good evening.
MINISTER CASH: Good evening Scott and good evening to your listeners.
JOURNALIST: The June 30 deadline was a major hurdle because countless business owners are simply not in a position to be able to maximize that $150,000 instant asset write-off because of the coronavirus. Or, is it evidence that the Australian economy isn't quite in recovery mode just yet?
MINISTER CASH: Look, this is all about the government putting in place those measures, which will back small and family businesses, in particular, to recover as a result of COVID-19. We've received a lot of feedback in relation to businesses who didn't have the capacity now to utilize the instant asset write-off, but know over the next few weeks and months that they will have that capacity. It was really important that we supported them by the announcement today that we are extending the $150,000 instant asset write-off for a six month period through to the 31st of December, 2020.
JOURNALIST: How many businesses do you think are set to benefit from the extension of the scheme and how much will the extra six months cost the Government?
MINISTER CASH: Well, it's a $300 million cost to the government over the forward estimates, but we see that really is an investment in businesses. As you know, when someone invest in their business, they're able to prosper, grow and create more jobs for Australians. In terms of the figures, the latest data that we had is for 2017/18, and around 360,000 small businesses claimed a deduction in relation to the instant asset write-off back then. Of course, the asset threshold, then was $20,000 and it was for businesses with a turnover threshold of $10 million or less. So, we're still waiting the most recent data, but based on the feedback that we have received, there are many, many businesses out there who just need that additional six months to invest in the assets for their business.
JOURNALIST: So, you talk about the feedback that you're getting from business owners. How are handling this pandemic at the moment and how are they in the trenches, is there a chances that they will come out?
MINISTER CASH: Oh look, I am humbled every single day by the resilience in particular of small and family businesses. I mean, they are the backbone, as you and I know, of the Australian economy. And in particular, when you look at how many millions of Australians they employ. Of course, COVID-19 had a devastating impact on so many businesses in Australia, but that is why the government did put in place a comprehensive suite of measures.
In particular, the $70 billion JobKeeper payment. Just for your listeners benefit, around 800,000 businesses applied for the JobKeeper payment and that covers around 3 million employees, have had their applications processed. And I think more than $10 billion in payments have been approved. Of course we had the cash flow boost and that was, as you know, the tax free payments $20,000 and a $100,000. Over half a million businesses are now accessing them. So a comprehensive suite of policies, but that's why it was so important. Listen to the feedback, in particular, in relation to the instant asset write-off and support those businesses that had the ability to go out and purchase assets, but just can't do it by June 30 this year.
JOURNALIST: I understand that Senator. Now, childcare businesses we found out yesterday, they're going to not receive payments shortly, two months earlier than the original end date. Should other small businesses be concerned that JobKeeper could be taken off them, particularly if they have returned to profit?
MINISTER CASH: Okay. As I've always said, as the Minister for Small and Family Business, this has been legislated for six months. In relation to childcare, that is a separate $708 million transition payment. That will be accessible to every childcare service, not just with employees or those with employees are receiving JobKeeper. In relation to other small businesses, if you have qualified for JobKeeper, you will continue to get JobKeeper until September. It is a six-month program. Of course, Scott, as you know, we had always said there would be a review in June, and that is the right thing to do, to monitor the impact of the program on the ground. However, if you are a small and family business and you were listening today and you needed JobKeeper because your income it dropped by more than 30%, you will get JobKeeper until September. That is what the government legislated.
JOURNALIST: There's going to be a few people that will sleep well tonight on here. And the other good news today that would have made you happy, is that some of the dire unemployment figures that we saw in March and even into April, we're looking at somewhere between fourteen to seventeen percent. Today, there were some news that might be looking closer to eight or nine percent. That's going to be good news for business?
MINISTER CASH: Certainly, even in terms of the re-forecasting down of the JobKeeper payment. The fact that, you know, the original forecast was around 6.5 million Australians and the new forecast was it is going to support around 3.5 million. I mean that is good news, but it's still obviously very distressing news, for those Australians who have lost their job as a result of COVID-19. The government has made it very clear and our Prime Minister has made it very clear, there were two wars that we were waging. The first was in relation to the health impact of COVID-19. We have within reason successfully suppressed the virus. We now will need to live in that COVIDSafe economy, but the war we now fight collectively together is that war on unemployment. Treasury estimated, as you know that as we see those three stages of opening up the economy occur, we should say at least 850,000 people who lost their jobs, go back into employment. So the government has one focus getting as many people back into work as quickly as possible. That's my focus as the Employment Minister.
JOURNALIST: Senator Michaelia Cash, thank-you so much for joining me tonight.
MINISTER CASH: Great to be with you.