Instant asset write-off crucial for SMEs, says ACCI

The Australian Chamber of Commerce and Industry (ACCI) is calling for parliament to reintroduce the instant asset write-off budget measure in this fortnight's sitting.

The business network noted the measure was originally announced in last year’s budget for the 2024–25 financial year before it was withdrawn from the Senate without warning.

ACCI CEO Andrew McKellar said the bill was still yet to be passed and tabling the legislation was the one thing politicians could do to help small businesses.

“We’re not asking a lot here. We are just asking for one thing – the measure as announced in the last budget to pass the parliament,” he said.

“The tabling and passing of legislation in parliament would give small business owners the certainty they needed to invest and grow their business.”

ACCI noted it was pushing for the legislation as it would allow small businesses to write off assets worth up to $20,000.

The business network also suggested that the $20,000 threshold be increased to $50,000 as part of its Agenda for Business, pre-election campaign.

According to the Tax Office, the instant asset write-off would enable eligible businesses to claim an immediate deduction for the business proportion of the cost of an asset in the year the asset was first used or installed ready for use.

The instant asset write-off could be used for multiple assets if the cost of each asset was less than the relevant threshold, as well as new and second-hand assets, the ATO said.

“For an asset for which you have claimed an immediate deduction under the simplified depreciation rules in a prior income year, small businesses can also immediately deduct an amount included in the second element (cost addition) of that asset’s cost.”

This would apply if the amount was the first deductible amount of the second element cost incurred after the end of the income year in which the asset was written off, less than $20,000 and incurred between 1 July 2023 and 30 June 2024.

McKellar said ACCI was also campaigning for the instant asset write-off measure to be a permanent feature of the Australian tax system.

This would help avoid the “ridiculous ritual” of having to wait for each budget to see if the measure had been included, McKellar added.

“We had the bizarre situation last year of legislation passing just weeks before it was due to expire and as a result there was little take up of the measure,” he said.

“To avoid this happening again, it’s time for parliamentarians across the aisle to agree to the instant asset write-off measure now for the sake of small businesses around Australia who are the backbone of the economy.”