You are here: Home > News > Latest updates & news >
Read time:


hero image

By Helen Carter


Optometrists have responded quickly to order new equipment following the announcement in the Federal Budget of a 100 per cent tax write-off for small businesses purchasing assets under $20,000.

This should be a ‘win-win’ situation for optometric practices and suppliers, and will enable practices to improve cash flow, and update equipment and technology, ODMA says.

Optometry Australia also welcomed the government’s Jobs and Small Business Package.

From Budget night until 30 June 2017, small businesses with aggregate annual turnover of less than $2 million will get an immediate and full tax deduction for any individual assets they buy costing less than $20,000, up from the current threshold of $1,000.

The limit applies to each individual item and small businesses can apply this rule to as many individual items as they want. The tax benefit applies to assets they start to use or have installed ready for use, and will encourage businesses to invest in new assets.

Assets costing $20,000 or more can continue to be placed in the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year after that.

Optical Distributors and Manufacturers Association of Australia CEO Finola Carey told Australian Optometry that the $20,000 instant asset write-off was welcome news for ODMA and its independent eye-care practitioner customers in small business.

It will allow practitioners to quickly update technology and equipment to help them better compete in the toughest optical marketplace ever,’ Ms Carey said. ‘Although the previous limit was $1,000, which was recently reduced from $6,500, this news is a welcome turnaround.

‘Even though assets up to $20,000 could previously be claimed over a period of years by depreciation, being able to claim the full value of an asset in a single year will result in improved cash flow and potentially allow practitioners to spend some dollars improving their product offering as well.

‘The net result of this should be a win-win for practices and suppliers.’

Ms Carey said the signs were that the Budget would be approved quickly by the Senate and hopefully this would restimulate consumer confidence, resulting in a boost to spending in the entire market.

Cameron Loveless, optometry sales manager of Designs For Vision Australia, told Australian Optometry it was great news for Australia’s independent optometrists as most would be eligible as their annual turnover was under $2 million.

‘The average independent practitioner probably has annual turnover around $850,000 although this might range from $400,000 to over $1 million,’ he said.

‘While it doesn’t help them buy an OCT which starts at $50,000, we probably have 100 items of equipment under $20,000.’

Mr Loveless said it could be a boom for sellers of optical equipment.

‘It will encourage more optometrists to buy equipment now instead of later this year or next year,’ he said. ‘$1,000 to $20,000 is a big range. It’s going to make optometrists who were thinking about buying equipment in a year or two bring their purchases forward.

‘I even had one optometrist text me the night of the Budget and immediately order equipment they had been thinking about ordering.

‘However, it is a tax write-off so is useful only if your business is making a profit; it isn’t helpful for a start-up business.’

Other small business measures include reducing the tax rate for incorporated businesses with annual turnover of less than $2 million. Their company tax rate will reduce by 1.5 percentage points to 28.5 per cent.

The government will provide a five per cent tax discount to unincorporated businesses with annual turnover less than $2 million from July 2015, capped at $1,000 per individual in an income year.

The Fringe Benefits Tax will be abolished for work-related small electronic devices, small businesses will benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.

From July 2016, new start-ups will be able to immediately deduct professional costs, such as lawyers’ and accountants’ fees, associated with starting a business rather than writing them off over five years.

Business registration will be streamlined with a single online registration site.

Filed in category: Uncategorised

Acknowledgement of Country

In the spirit of reconciliation Optometry Australia acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.