$150,000 instant asset write-off, codes protecting SMEs in COSBOA budget wishlist

The federal government should expand the instant asset write off to cover assets worth $150,000, and shield small businesses from prosecution if they abide by new codes of conduct, the Council of Small Business Organisations Australia (COSBOA) says in its 2024 pre-budget submission.

The submission, released over the weekend, serves as a wishlist from the lobby group representing the interests of more than three dozen member organisations and many hundreds of individual businesses.

Front and centre is a call to alter the instant asset write-off, letting small businesses immediately deduct the value of new workplace assets worth $150,000 from their tax bill.

After several years of six-figure instant asset write-off allowances — and the pandemic-era temporary full expensing scheme, which allowed businesses to instantly deduct the full value of any eligible purchase — the federal government intends to install a $20,000 limit for the 2024-2025 financial year.

The federal government says the $20,000 limit, which is still subject to legislation, will provide useful cashflow support without sparking excess inflation.

COSBOA sees it differently, arguing small businesses need greater support and certainty, while indirectly battling inflationary pressures.

“This initiative would support greater business investment and small business productivity,” COSBOA CEO Luke Achterstraat told SmartCompany on Monday.

“Productivity is the key to driving down inflation.”

Expanded codes of conduct

Pivotal to the COSBOA submission is the request for “right-size regulations” that do not “provide onerous compliance costs on small business”.

“Many small businesses are reporting that compliance costs have risen to the point where more than 30% of their time is absorbed, and they do not have the budget to outsource this or absorb it through an internal dedicated HR or finance function,” the submission says.

COSBOA has called for federal funding to establish a “triage” service, where policy experts can consider the ramifications of new policy proposals on small businesses before they are brought into effect.

“In recent times the regulatory impact statements have been inadequate and have not considered small business,” it says.

Additionally, the lobby group has suggested the creation of new compliance codes, which, if abided by, could protect small businesses from prosecution if they breach incoming regulations.

The proposal is modeled on the voluntary compliance code being developed in support of new wage theft criminalisation rules.

Under the first tranche of the Closing Loopholes legislation, small businesses that comply with the code will be shielded from the harshest punishments if they are found to have unintentionally underpaid staff.

The same framework could be applied to incoming policies, Achterstraat said, circling other industrial relations reforms, changes to the Privacy Act that will expose more small businesses to penalties, Respect@Work changes, and cyber security rules.

Tax, payment times, AI, and more

Looking beyond the latest Stage 3 tax cut tweaks, COSBOA has joined other industry bodies in calling for more holistic tax reform, including the end of the “invidious” payroll tax “that hurts productivity, wages, and jobs”.

While the payment times regulator is naming and shaming big businesses that fall foul of their reporting duties, COSBOA is calling on lawmakers to establish a maximum 30-day payment time between big businesses and their smaller partners.

Small businesses should be introduced to the multifaceted world of artificial intelligence through “concise guidelines” and the provision of resources to help SMEs test their AI capabilities.

“Budget 2024-25 provides government an opportunity ensure small business owners are supported to be more productive, rather than deterred from employing others and increasing their productivity,” the submission reads.