The instant asset write-off scheme will cover purchases worth $30,000 and expand to medium-sized businesses, according to amendments passed in the Senate that significantly expand upon a plan put forward by the Albanese government.
Under its proposed tweak to Treasury laws, the Labor government intended to set a new instant asset write-off threshold of $20,000 for 2023-2024, instead of allowing it revert to $1000 at the start of the financial year.
But on Wednesday afternoon, the upper house backed an amendment from Liberal Party Senator Jane Hume to boost the threshold to $30,000.
Additionally, the amendment will see businesses with an aggregated turnover of less than $50 million become eligible for those write-offs, as opposed to the current limit of $10 million.
Small Business Minister Julie Collins said the planned $20,000 limit, announced in the 2023-2024 federal budget, was intended to provide cashflow support to small businesses without stoking inflation.
Yet the Coalition revealed its plans to push for a higher limit late last year, with Shadow Treasurer Angus Taylor declaring the expansion a “modest measure” intended to help businesses in a “cost of living crisis”.
The expanded eligibility criteria will see approximately 26,500 more medium-sized businesses become eligible for the scheme, the Coalition said.
Beyond the instant asset write-off, the bill also underpins the Albanese government’s bonus tax deductions for small businesses that invest in energy-efficient upgrades.
The bill will return to the House of Representatives for a final sign-off before passing into law.
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.
