This article is more than 1 year old

This article is more than 1 year old

The Coalition has promised a $400m expansion of the small business instant asset write-off on top of incentive payments of $2,000 to new apprentices in a bid to boost business investment and skilled employment.

Delivering his first budget as treasurer, Josh Frydenberg promised to create 80,000 apprenticeships in industries with skills shortages by doubling incentive payments to employers to $8,000 per placement.

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Frydenberg presented the measure as “a new $525m skills package” although just $55m of the package is new money, with the vast majority ($463m) the result of reallocating Skilling Australians Fund money unspent because Queensland and Victoria did not sign up to the scheme.

The instant asset write-off threshold will be increased from $25,000 to $30,000 and small business will be allowed to make a deduction every time an asset under that amount is purchased.

The scheme will be expanded beyond small businesses with a turnover of $10m to medium-sized businesses with a turnover of $50m, an additional 22,000 enterprises.

Together the asset write-off measures cost $400m over the forward estimates, on top of $750m already committed for changes in January that lifted the threshold from $20,000 to $25,000.

Frydenberg said this would allow “a cafe to get a new fridge or grill, a plumber to buy new tools or a courier a new van”.

The government will also provide $60m more for export market development grants, Frydenberg said.

The Australian Industry Group chief executive Innes Willox said the instant asset write-off will encourages business to spend and invest which is “very important for an economy which is quite clearly slowly and in some parts of the economy stagnating” with declining business and consumer confidence.

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The Australian Chamber of Commerce and Industry chief executive James Pearson was similarly positive about the “boost for business” provided, labelling it a “shot in the arm”.

While small and medium sized businesses are expected to benefit from the asset write-off, multinationals and high wealth individuals are in the government’s sights.

The budget papers state the Australian tax office will receive $1bn to extend its tax avoidance taskforce, a measure estimated to raise $3.6bn over four years, or $2bn in underlying cash balance terms, because of a “delay between revenue liabilities raised as a result of the compliance activity and the subsequent cash collections”.

The vocational education and training package consists of:

$200m in apprenticeship incentives for trades with skills shortages

$132m to establish a national skills commission to reform vocational education

$67.5m to trial 10 national training hubs for school-based vocational education in places with high youth unemployment

$62.4m on literacy and numeracy skills for at-risk workers; and

$20m to help better identify emerging skills needs.

Budget papers say the package responds to an as-yet unpublished review by former New Zealand tertiary education minister Steven Joyce, which was handed to the government last week.

Frydenberg announced the government will provide a two-year $453m funding extension for early childhood education.

He said it will enable “350,000 children to receive 15 hours of quality early learning per week in the year before school” – indicating four-year-olds will continue to receive taxpayer funding for preschool but the Coalition will not expand the scheme to three year olds, as proposed by Labor.

“We will continue to work with the states and territories to support a longer-term plan,” Frydenberg said.