The ALP has pledged to extend the $20,000 instant asset write-off for small businesses for another financial year, if it retains power following the May federal election.
Recurring tax policy feature
Instant asset write-offs have been a recurring feature of tax policy for small businesses over the past decade, with both sides of politics using them to support economic activity and investment.
The proposed extension would apply to businesses with an annual turnover of up to $10 million.
The tax break allows small businesses to immediately deduct the cost of eligible assets – such as tools, machinery or equipment – from their taxable income.
Prime Minister Anthony Albanese defended the decision not to make the incentive permanent, saying it was designed to stimulate immediate investment.
"That's the whole point, so that you create that economic activity and the multiplier that flows through immediately," Albanese told ABC Radio Sydney.
“We want to encourage that economic activity now from small business and tradies.”
Western Sydney sweetener
The announcement was made as both major party leaders campaign in western Sydney, targeting that swing electorate’s small business owners, tradespeople and local entrepreneurs.
The Coalition says it will go further, promising a permanent $30,000 write-off if elected.
In his budget reply speech, Opposition Leader Peter Dutton criticised Labor’s policy as inconsistent.
“Under Mr Albanese on budget night [tradies] were told... the cap was $1,000,” Dutton said. “What they have done now by flipping it to $20,000 is to try and patch up a problem of their own making.”
The existing $20,000 write-off was extended by Labor in the final hours of the last parliamentary sitting for the current financial year.
The new commitment would see it continue through 2025-26.