Welcome to the May issue of Lendcorp News.

In this Issue

	The Small Business 30% - 50% Tax Break Boost
	Budget 2009 - The Big Picture
	Federal Government's Car Industry Support Package
	Assistance for customers affected by the economic downturn

In Other News

Lendcorp Finance welcomes our 2 new Brokers, Brad Holmes and David Reid, to the team.

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The Small Business 30% - 50% Tax Break Boost

The “Small Business & General Business Tax Break” Bill was passed by both houses of Parliament on Thursday the 14th of May 2009.

The Investment Allowance applies to most types of NEW plant and equipment, including New motor vehicles that are used for business purposes

The Benefits

For Businesses with a turnover of less than $2 Million

• The Investment Allowance enables customers to claim an ADDITIONAL 50% tax deduction on eligible items purchased between 13th December ’08 and 31st December 2009 and delivered / installed before 31st December 2010.
• Businesses can only claim on NEW equipment for $1,000 or above.

For Businesses with a turnover of greater than $2 Million

• The Investment Allowance enables customers to claim an ADDITIONAL 30% tax deduction on eligible items acquired between 13th December 2008 and 30th June 2009 and delivered and installed before 30th June 2010.
• The Investment Allowance enables customers to claim an ADDITIONAL 10% tax deduction on eligible items acquired from 1st July 2009 to 31st December 2009 and received by 31st December 2010.
• Businesses can only claim on items greater than $10,000 in value.

Important to note

The Investment Allowance provides a bonus tax deduction – it is not a rebate or a refundable tax offset.

The Finance Facility used by the borrower is critical in relation to the ability to claim the tax deduction.

• Finance Lease - the Financier is the owner of the goods and therefore claims the tax deduction – not the borrower
• Chattel Mortgage - the borrower is able to claim the deduction as the borrower is the owner of the goods.

Some items such as Computer Software are ineligible.

Examples of eligibility

Ben operates a courier service. He also meets the definition of a small business entity. He orders and takes delivery of a new, more fuel efficient delivery van in June ’09 at a cost $30,000. Ben will be eligible for a bonus tax deduction of $15,000 in his 2008-09 tax return.

Bob runs a small Bobcat/Earthmoving business and meets the definition of a small business. He decides to upgrade his Bobcat to a New Model at a cost of $40,000 and orders the machine on the 19th of September 2009. Bob takes delivery of the new Bobcat on the 20th of October ‘09. Bob will be eligible for a bonus tax deduction of $20,000 in his 2009-10 tax return.

Whilst the “Investment Allowance” provides any excellent opportunity for “Self Employed” individuals to gain Tax incentives whilst purchasing “Business Use” goods, we advise our clients to contact us or their financial advisor before making any decisions.
 

Budget 2009 - The Big Picture

It is important to remember that Australia went into the Global Financial Crises (GFC) in great shape - strong banking system, large budget surplus, no government debt, the shortage (ie) not over-supply of homes, and companies with strong balance sheets.

There were some positive items of note to come out of the Treasurer’s May 12 Budget  speech.

- Australia has $68 Billion in the Bank.
- Australia has the lowest debt of any major country.
- Inflation is expected to be 1.75% in 2009-10 keeping rates down.
- First Home Owners Grant to be continued until December 2009.
- New Paid Parental Scheme to be introduced effective from 2011.
- Tax cuts from July 1 2009.
- The Reserve Bank expects interest rates to remain low.
- Small Business Tax breaks.
- Increase to Pension payments.

Source; Commsec – “Economic Insights” – May 12, 2009.

Federal Government's Car Industry Support Package

Late last year both General Motors Acceptance Corporation (GMAC) and GE Automotive Financial Services (GE) withdrew from the Australian car finance market due to the effects of the Global Financial Crisis. This affected 400 dealers across the country.

Recently, Ford Credit Australia has had difficulty raising the liquidity required to continue providing its 230 dealerships with the funding required for operation.

In response to this situation the Federal Government has set up a $550 Million facility titled “Ozcar” which will enable these affected dealers to access the funds required to maintain their businesses and ultimately limit job losses within the industry.

Source; Treasury Dept.,Press Release 13/5/09.
 

Assistance for customers affected by the economic downturn

Many customers, through no fault of their own, find themselves to be victims of the economic downturn.

Esanda Finance has always supported customers facing economic hardship, doing so in the following ways –
Providing easy access to the hardship team via the toll free hotline 1800 838 100.
Offering varying arrangements, including reduction or suspension of payments.
Providing assistance via independent financial counsellors.

That’s all for this months edition.

We hope you have enjoyed this issue and encourage you to contact us if you require any assistance.

From the Team at Lendcorp