Both houses of Parliament have approved the federal government’s bill to lift the instant asset write-off for SMEs to $30,000.
The Coalition government’s Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 yesterday passed both the House of Representatives and the Senate, just days after the government announced its proposal in its 2019-20 budget.
The bill was designed to increase the instant asset write-off threshold from $25,000 to $30,000 and broaden the eligibility criteria to SMEs with an annual turnover of up to $50 million, up from $10 million.
In his budget address, Treasurer Josh Frydenberg noted the benefits of the reform for the small business community, which he described as the “engine room of the economy”.
“It will be increased from $25,000 to $30,000, and it can be used every time an asset under that amount is purchased,” he said.
“Allowing a café to get a new fridge or grill, a plumber to buy new tools or a courier a new van.”
He continued: “Already, more than 350,000 businesses have taken up the instant asset write-off. And now, even more will have the chance to do so.”
The government’s announcement was welcomed by industry stakeholders, including Australian Small Business and Enterprise Ombudsman Kate Carnell.
“We are pleased the instant asset write-off has been increased to $30,000 and expanded to businesses with a turnover of up to $50 million, but had hoped the threshold was higher to capture capital-intensive businesses, such as primary producers,” she said.
The passage of the bill comes amid research released in SME lender Scottish Pacific’s March 2019 SME Growth Index, which surveyed 1,257 Australian SMEs, finding that 24 per cent said continuing the asset write-off should be the top focus for SMEs.
The bill awaits ratification from the Governor-General.
[Related: Government to legislate commitments to SMEs]
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