The Coalition are today calling for the government to support Coalition amendments to Treasury legislation that will extend the Instant Asset Write Off to 26,500 medium businesses and extend the value of assets eligible to $30,000.
This will simplify depreciation for Australia’s 3.6 million small and medium businesses, cutting red tape while boosting investment in productive assets to improve their businesses, lower their costs, and in turn lower prices.
This will drive productivity at a time it has experienced an historic collapse under Labor, which will drive economic growth to fund the essential services Australians deserve.
Following temporary and targeted extensions during the COVID-19 pandemic, the government have ignored calls from business groups and lowered the Instant Asset Write Off thresholds to levels not seen since the 2018-2019 financial year.
The Coalition’s amendments restore the Instant Asset Write Off to the levels introduced in the 2019-20 budget. This aligns the eligibility with the 25 per cent small business company tax rate threshold, and Labor’s Small Business Energy Incentive measure.
The Coalition understands that when business owners can keep more of their own money, they are able to invest back into the business, boost productivity, grow the economy and create new and local jobs.
The Coalition’s amendments mean:
- 26,500 businesses with aggregated turnover of up to $50 million will be eligible to use the Instant Asset Write Off.
- The asset threshold will increase from $20,000 to $30,000 – allowing businesses to claim accelerated depreciation on a wider range of assets.
- Businesses can invest in productive assets without putting pressure on inflation.
Shadow Minister for Industry, Skills and Training, Small and Family Business, Sussan Ley said that Australia’s 3.6 million small businesses generate one third of GDP, make up 98 per cent of all businesses and employ around half of the private sector workforce.
“Australia’s small businesses owners have been failed time and time again by a distracted Anthony Albanese. Labor are compounding cost increases by cutting the instant asset write off, imposing anti-competitive workplace laws, and overseeing massive increases in power bills. .
“The Coalition is calling on Labor to do the right thing and increase access to the Instant Asset Write Off to the 26,500 medium businesses who would otherwise have it taken away.
“As our economy shudders thanks to Labor’s failing economic management this would give a much needed shot in the arm to our manufacturers, farmers, and logistics businesses helping to increase productivity and bring down prices for Australian families.
Shadow Treasurer Angus Taylor said the Coalition’s proposal will support businesses to invest, to grow, and to drive productivity which will help bring down prices.
“Like households, Australian small and medium businesses are struggling under Labor’s cost of living crisis.
“The cost of everything going up doesn’t just hurt families, it hurts businesses. Yet Labor have set the thresholds at levels that ignore recent price rises and leave medium businesses cut out of vital tax relief.
“Labor have overseen an historic collapse in labour productivity over the last 15 months, with policy settings putting pressure on business costs. With insolvencies increasing to eight-year highs, this modest measure puts small and medium businesses on a positive footing to drive productivity in their businesses and get through this cost of living crisis.
“Small and medium businesses deserve the support of the Government. Labor have broken promises on taxing franking credits, on taxing super, and this is just another example of Labor being distracted from the issues that matter to Australians.” Mr Taylor said.
The Coalition’s amendments to increase and extend the instant asset write-off build on the Coalition’s record of backing tax relief small and medium businesses and the approximately eight million Australians they employ. The Coalition in government:
- Reduced the small business company tax rate from 30% to 25% for businesses with turnover of up to $50 million;
- Restored the Small Business Income Tax Offset to support sole traders – and increased the offset to 16%
- Simplified small business tax administration by simplifying the BAS, streamlining ATO reporting requirements, and implemented Single Touch Payroll;
- Restored, and extended, the Instant Asset Write Off;
- Put in place tax deductions to support small and medium businesses to invest in cybsersecurity, einvoicing, cloud computing, and training employees.