Small businesses will be free to claim immediate tax deductions under the $20,000 instant asset write-off scheme, and seek a bonus 20% deduction on energy-efficient upgrades, after a contentious and long-delayed bill passed in Parliament on Tuesday night.
The Treasury amendment bill, which underpins the instant asset write-off renewal and the $314 million Small Business Energy Incentive scheme, will grant small businesses access to both schemes for the 2023-2024 financial year.
In a statement, Minister for Small Business Julie Collins declared the bill’s passage a win for the entrepreneurial community.
“We’re focused on delivering responsible, practical assistance to small businesses so they can continue to invest and grow,” she said.
“The passage of legislation delivers on this. ”
Assistant Treasurer Stephen Jones said the Small Business Energy Incentive will help small businesses become more sustainable.
“Our plan will help small businesses electrify their heating and cooling systems, and upgrade to more efficient appliances, while saving money on their energy bills,” he said.
Small business advocates have welcomed both policies, given the tough financial circumstances faced by entrepreneurs nationwide.
But a Coalition-led effort to expand the size and scope of the tax write-off, and government opposition to that proposal, delayed its passage until four days before the new financial year.
Small business advocates are concerned the delay may have watered down the effectiveness of the Small Business Energy Incentive scheme, with its postponement discouraging businesses from making major energy-conscious investments.
While the Coalition ultimately dropped its efforts to expand the write-off in this piece of legislation, the House of Representatives on Tuesday heard arguments that future iterations should be made permanent.
The federal government, which also pledged to extend the $20,000 threshold level for another 12 months in the 2024-2025 budget, argues that temporary extensions are appropriate as they permit lawmakers to respond to the needs of economy of the time.
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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.
