$20,000 instant asset write-off pushed back, yet again
Legislation that would have extended the $20,000 instant asset write off for another year was abandoned in Parliament’s last-minute rush to pass dozens of bills before the Christmas break.
Legislation that would have extended the $20,000 instant asset write-off for another year was abandoned in Parliament’s last-minute rush to pass dozens of bills before the Christmas break.
The decision means the fate of a key small business tax incentive is, once again, up in the air.
But with a federal election looming, both major parties seem likely to turn the write-off into a key component of their election campaigns.
Schedule 7 of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 would have given effect to the $20,000 write-off, announced by the Labor government in its 2024-2025 budget.
However, as the federal government, the opposition, and the crossbench negotiated the passage of 32 bills through the Senate on the final sitting day of the calendar year, Schedule 7 was scrubbed from the Bill before it passed in Parliament.
The decision means the tax break, covering the current financial year, will go without legislative backing until February 2025 at the earliest.
Small businesses reliant on the tax break are familiar with those delays: legislation underpinning previous write-off extensions came perilously close to the end of the financial year in both 2023 and 2024.
This time around, small businesses have a federal election to contend with: Australians are due to head to the polls by the end of May, meaning debates over the write-off are set to become part of each party’s election platform.
That debate could be heated.
Labor will be unlikely to reverse course on the $20,000 limit it established in the recent federal budget.
However, the Coalition argues it should be expanded to cover assets worth $30,000 and be made permanent, ensuring the write-off does not become a political hot potato each year.
Business advocates say the last-moment legislative backdown is disappointing for entrepreneurs banking on the tax incentive.
“Small businesses operate on forward investment schedules and many will feel like it’s Groundhog Day,” said Luke Achterstraat, CEO of the Council of Small Business Organisations Australia, in a statement provided to SmartCompany.
The delay marks a “painful reminder of last financial year when the legislation was only passed a matter of days before the window for applications was due to expire”.
“The annual bickering and finger-pointing has become tiring,” he added, referring to recriminations from both sides of the political divide over who is responsible for the write-off’s parliamentary woes.
Australian Chamber of Commerce and Industry CEO Andrew McKellar said the delay is a “real poke in the eye for small business”, creating “more uncertainty for business owners wanting to invest in new assets”.
The withdrawal of Schedule 7 is a “wasted opportunity”, he added.
While uncertainty once again shrouds the instant asset write-off, several key measures affecting small businesses and startups were passed into law in the last-minute legislative flurry.
Laws enshrining buy now, pay later as a form of credit were passed in the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024.
Separately, landmark merger reforms, laws giving SMEs more time to amend their tax statements, fresh cybersecurity reporting rules, and the teen social media ban all passed into law.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.
Comments