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The shadow minister has promised to deliver a permanent instant asset write-off threshold at $30,000 if elected, slamming Labor’s approach to the measure as “unacceptable”.
Howarth reaffirms Coalition support for instant asset write-off measure
28 March 2025
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8 minute read
Shadow assistant treasurer and shadow minister for financial services, Luke Howarth, has criticised Labor’s decision to exclude the instant asset write-off (IAWO) measure from the 2025–26 federal budget, and confirmed that the Coalition will implement a permanent IAWO threshold at $30,000 if elected to power.
Speaking at a recent IPA event, Howarth said the fact that the government had left the IAWO measure out of the budget for the 2025–26 financial year was “unacceptable”.
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“We will make it permanent at $30,000 [if elected]. During Covid it was unlimited and we saw some really good outcomes,” Howarth said at the IPA and Canberra Business Chamber’s Budget Review event.
The $20,000 instant asset write-off threshold for the current 2024-25 income year was passed by the Senate late on Wednesday, as part of the Treasury Laws Amendment (Tax Incentives and Integrity) Bill.
This leaves businesses with roughly only three months to use the increased threshold before it potentially drops to $1,000 after 30 June.
The shadow minister also promised businesses that the Coalition would look to cut red tape, lower compliance costs and reduce taxes by restoring the cap on taxes back to 23.9 per cent.
Many of independent MPs also wanted to see the instant asset write-off set at a higher threshold permanently to enable small businesses to plan investments for their business.
In a parliamentary motion on Wednesday, Senator David Pocock said that small businesses were the backbone of the Australian economy and stressed that Parliament must deliver reforms that give small businesses the confidence to invest in their own productive capacity and to grow.
“Business insolvencies are at record highs and the government has so far failed to deliver certainty to small businesses regarding the instant asset write-off and a policy environment that promotes growth,” Pocock said.
Pocock also said small businesses wanted to see a simpler tax system with permanent supports that gave them certainty, rather than the “annual politicking around instant asset write-offs that have so far defined the Government’s approach to small business policy”.
ScotPac chief executive Jon Sutton said the uncertainty created by the budget decision to exclude the measure would deliver a capital expenditure headache for thousands of SMEs that were planning to invest in productivity boosting assets.
“Businesses have come to rely on the write-off rules in recent years to help upgrade or replace essential assets like vehicles and trailers, computers and printers, and power tools and equipment,” Sutton said.
New data from ScotPac’s SME Growth Index Report found that 59 per cent of Australia’s SMEs were planning to invest in their businesses in the six months to August 2025.
“However, the instant asset write-off change in the Budget will throw those plans into jeopardy, particularly when SMEs are already feeling the cash flow pinch of higher wages, superannuation and other compliance costs,” Sutton said.
Previous research from ScotPac following the reduction in the instant asset write-off cap to $20,000 from July 2023 found that the expenditure plans of 61 per cent of SMEs were immediately impacted. A further 20 per cent said they would delay investment by 6–12 months.
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