Labor has announced that it will extend the $20,000 instant asset write-off if it wins the election – but adovcates say it’s too little, too late.
Industry groups like the Council of Small Business Organisations Australia (COSBOA) also criticised the fact that the pledge was simply a renewal of the write-off measure for another 12 months, rather than a move to make it permanent.
The $20,000 instant asset write-off scheme has never been made permanent by a Government, making it hard for small-business owners to plan business investments. Both Labor and the Coalition have now promised to extend the write-off if elected, but neither has so far committed to a permanent tax break.
Prime Minister Albanese said that the write-off extension would be temporary to encourage business owners to invest immediately.
“We want people to invest now,” he explained. “If you just leave it there, then there’s no incentive to go out there and make sure that you tool up your business, that you invest and you create that multiplier impact now.”
David Gandolfo, Advocacy Chair of the Commercial and Asset Finance Brokers Association of Australia, disagreed with the PM’s reasoning.
“The government’s Future Made in Australia ambition will never be achieved by incentivising businesses to buy coffee machines and hand tools,” Gandolfo argued. “Increased production capacity is only achieved by businesses investing in infrastructure assets that will increase production and create jobs.”
$20,000 figure “insufficient”
Another contentious issue is the threshold amount. Labor’s promise sticks to the $20,000 threshold of the past few years, while the Coalition has pledged to raise the incentive to $30,000 (which it previously sat at in 2019). But COSBOA CEO Luke Achterstraat thinks the threshold should be much higher than either party has planned.
“The $20,000 threshold needs to be significantly boosted to $150,000,” said Achterstraat. “The $20,000 is already insufficient and has been eaten away by inflation over the last decade.
“Major corporations don’t vote, but small business owners do, and both major parties need to lift their game to appeal to this major employer and critical electorate sector.”
