Senate votes for $30,000 instant asset write-off, expanded eligibility for SMEs

The instant asset write-off scheme will cover purchases worth $30,000 and expand to medium-sized businesses, according to amendments passed in the Senate that significantly expand upon a plan put forward by the Albanese government.

Under its proposed tweak to Treasury laws, the Labor government intended to set a new instant asset write-off threshold of $20,000 for 2023-2024, instead of allowing it revert to $1000 at the start of the financial year.

But on Wednesday afternoon, the upper house backed an amendment from Liberal Party Senator Jane Hume to boost the threshold to $30,000.

Additionally, the amendment will see businesses with an aggregated turnover of less than $50 million become eligible for those write-offs, as opposed to the current limit of $10 million.

Small Business Minister Julie Collins said the planned $20,000 limit, announced in the 2023-2024 federal budget, was intended to provide cashflow support to small businesses without stoking inflation.

Yet the Coalition revealed its plans to push for a higher limit late last year, with Shadow Treasurer Angus Taylor declaring the expansion a “modest measure” intended to help businesses in a “cost of living crisis”.

The expanded eligibility criteria will see approximately 26,500 more medium-sized businesses become eligible for the scheme, the Coalition said.

Beyond the instant asset write-off, the bill also underpins the Albanese government’s bonus tax deductions for small businesses that invest in energy-efficient upgrades.

The bill will return to the House of Representatives for a final sign-off before passing into law.