Taxes
investment allowances timing
Assumption:
7.5 per cent of capital expenditure would be brought forward over the costing period.
Justification:
The increase in depreciation deductions available in the first year after purchasing a new asset would provide an incentive for businesses to bring forward investment.
Assumption:
2.5 per cent of capital expenditure that would have occurred in the two years prior to the start date would be delayed until after the start date.
Justification:
Businesses would receive higher tax deductions in the first year after purchasing a new asset if these are purchased after the policy’s start date.
Assumption:
Investment in eligible assets would increase by 0.5 per cent, substituted from ineligible assets.
Justification:
Businesses would have an incentive to shift discretionary investment from ineligible assets to assets that would qualify for the relatively more generous depreciation deductions.
Costing:
PER347 (published 19/06/2019)