About the study
Money conducted an independent survey of 261 Australian businesses – 88% of which are SMEs. It sought to find out whether, before COVID-19, businesses planned to invest in capital in FY21, how much they planned to invest, and which asset categories they would invest in.
Money surveyed businesses across a range of sizes: micro (1-10 employees), small (11-50 employees), medium (51-200 employees) and large (more than 200 employees).
Will businesses be making capital purchases in FY21?
The survey revealed that two in three businesses (66%) were planning to invest in equipment, vehicles or other capital in FY21. A greater proportion of small businesses were likely to invest in capital: 88% of large businesses, 91% of medium businesses and 92% of small businesses. However, only 41% of micro businesses planned to make capital purchases in FY21.
Across the States, more WA businesses (78%) are likely to be purchasing capital in the upcoming financial year. This compared with 43% of ACT businesses and 61% of businesses in Victoria.
How much are businesses planning to invest in FY21?
A quarter (26%) of businesses were planning to invest in assets of up to $50,000, 40% in assets of up to $100,000 and three-quarters (74%) in assets of up to $150,000 – the new and temporary purchase threshold of the Government’s instant asset write-off scheme.
Among businesses intending to invest this financial year, four in five micro businesses (85%) planned to invest up to $100,000, compared with half (50%) of small businesses, 34% of medium-sized businesses and 37% of large businesses intending to do the same.
Across the states, three in four (77%) Victorian businesses planned to invest up to $100,000 in the upcoming financial year, compared with two in three (64%) of those predominantly based in South Australia, and more than half (55%) from Queensland businesses.
What will businesses be investing in?
When asked which asset categories they would invest in, nearly half (48%) of businesses said they planned to invest in vehicles and trucks. Small businesses were most likely to invest in this category than any other size organisation, at 53%. This compared with just 42% of micro businesses.
Nearly a third (30%) of businesses said they would invest in equipment and machinery, and 25% said they would invest in furniture.
Eligibility, thresholds, and changes to the instant asset write-off scheme
The instant asset write-off threshold – a cash flow benefit which allows businesses to immediately deduct purchases of eligible assets (cars, equipment etc) – was increased from $30,000 to $150,000 in March as part of a coronavirus support measure for businesses. As part of this, it opened up access to businesses with an aggregated turnover of less than $500 million, previously $50 million.
However, the new thresholds only apply until 30 June. From 1 July, the criteria will change again to be applicable to purchases of up to $1000 and available only to small businesses with a turnover of less than $10 million.
Looking for more Australian business statistics? Read our extensive guide for industry-by-industry breakdowns, lending data and more.
