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Proposed amendments to increase the instant asset write-off and make it permanent have been voted down in the lower house.
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Crossbenchers push for $50k instant asset write-off threshold
11 February 2025
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8 minute read
Debate on Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024 continued in the House of Representatives yesterday, with both the Coalition and independent member Zali Steggall putting forward amendments to the bill.
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The bill removes deductions for general interest charge (GIC) and shortfall interest charge (GIC) amounts and also tightens the definition of a fuel-efficient vehicle under the Luxury Car Tax Act.
The Labor government also added an additional schedule to the bill for the $20,000 instant asset write-off measure, after removing the measure from the Responsible Buy Now Pay Later and Other Measures bill last year.
The additional schedule implements a $20,000 threshold for the instant asset write-off off for the 2024-25 income year only.
Independent member for Warringah Zali Steggall called for the instant asset write-off should be increased to a $50,000 threshold and made permanent to enable businesses to plan ahead.
Shadow assistant Treasurer Luke Howarth put forward similar amendments for the measure to be made permanent but at a lower $30,000 threshold.
Both sets of amendments failed to pass, despite support for the changes from the Greens and independent MPs.
Greens MP for Ryan Elizabeth Watson Brown said the Greens supported increasing and extending the instant asset write off.
"The Greens understand how important small businesses are to our community and the broader community," said Watson Brown.
Stegall said that businesses were still under pressure from late payments from customers, increasing inflationary pressures, rental increases, higher insurance premiums and lower consumer spending.
"We need to do more to stand up for small business," she said in an address before Parliament.
"The instant asset write-off is an important feature of the tax system and should be made permanent," she said.
"The move to increase it to $50,000 will assist with the rising cost of goods and services and the urgent need to stimulate growth in productivity."
Steggall said the rise of cyber security will see a significant cost impact on small businesses. She also noted that there had been a 20 per cent increase in the cost of goods since the pandemic.
"For construction businesses, building costs have risen 40 per cent since 2020. Costs of commercial vehicles have increased 104 per cent since January 2020," she said.
"All of these issues explain how $20,000 whilst a good start, is simply not sufficient to genuinely help small business so increasing it to 50,000 will provide that extra room for companies to provide wage increases and employ more casual and part time workers.
"It will make a difference when we are looking at the challenges small businesses face."
Howarth also made an amendment to remove the schedule 2 of the bill, which will deny deductions for the general interest charge and the shortfall interest charge. This amendment also failed to pass the lower house.
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