Legislation confirming a $20,000 instant asset write-off for the 2023-2024 financial year is likely to pass into law, as the Coalition backs away from contentious plans to expand the scheme.
The write-off, which allows small businesses to claim an instant tax deduction on the value of eligible purchases, must be legislated by June 30 for it to cover the 2023-2024 financial year.
If the bill is not passed by then, the purchase threshold will drop to $1,000 for 2023-2024, dramatically limiting the instant write-offs available to SMEs.
Despite those time constraints, the federal government and the Coalition have stoushed over the asset write-off scheme for months, delaying its passage into law.
The Coalition pushed for it to cover purchases worth $30,000 and apply to a greater number of businesses, and secured Senate support for those amendments in March.
But those changes were knocked back by the House of Representatives, putting the legislation in limbo as the cut-off date drew closer.
On Sunday, Shadow Treasurer Angus Taylor said the Coalition will support the bill in its $20,000 guise, as the final Parliamentary sitting week before the new financial year ticks down.
“The Coalition will support the bill if it is brought on for debate this week,” he announced in a statement.
“It is a shame it is left to the Coalition to be the grown-ups in the room on supporting small business – which should be above politics,” Taylor added.
Shadow Minister for Small Business Sussan Ley suggested the hold-up was caused by Labor’s unwillingness to back a larger write-off in Parliament.
“Small businesses should have never been put in this position,” with many businesses making spending decisions without legislative backing, she said.
Minister for Small Business Julie Collins has previously dismissed suggestions the government is to blame for the delay, describing the Coalition as inconsistent regarding the precise shape and scope of the tax measure.
The federal government did not back the $30,000 proposal over fears further small business support could be inflationary, and Collins has described the $20,000 threshold limit as appropriate given the ongoing economic environment.
Throughout the debate, small business advocates have called for the bill’s quick passage.
“We’re hearing from confused small businesses who just want certainty,” Australian Small Business and Family Enterprise Ombudsman Bruce Billson said in May.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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