While the Federal Government announcement of an investment allowance is welcome, the 10% is too low to change business behavior and increase spending. As I blogged in October and November, stimulus for small business has to be bold – as much as a 40% investment allowance. A 40% investment allowance would change business infrastructure spending and this is what the government says it wants.
This support is needed more because the Government and others have told businesses that they should be in the doldrums, not because they are actually in the doldrums.