Zali Steggall (Warringah, Independent) Share this | Hansard source

I move:

(2) Schedule 7, page 132 (line 1) to page 132 (line 13), omit the Schedule, substitute:

Schedule 7 — instant asset write-off for small business entities

Income Tax (Transitional Provisions) Act 1997

1 Section 328-180 (heading)

Omit "to 30 June 2025".

2 Subsection 328-180(1) (definition of increased access year )

Repeal the definition, substitute:

increased access year: an income year is an increased access year if any day of the year occurs on or after 12 May 2015.

3 Subsection 328-180(4)

Omit "Temporary increase", substitute "Increase".

4 Paragraph 328-180(4)(d)

Omit "$20,000", substitute "50,000".

5 Paragraph 328-180(4)(d)

Omit "and on or before 30 June 2025" (wherever occurring).

6 Paragraph 328-180(5)(e)

Repeal the paragraph, substitute:

(e) were a reference to $50,000, if the amount is so included at any time on or after 1 July 2023.

7 Paragraph 328-180(6)(e)

Repeal the paragraph, substitute:

(e) were a reference to $50,000, in relation to a deduction for an income year that ends on or after 1 July 2023.

This amendment is in relation to schedule 7, in relation to the instant asset write-off, which was first introduced as a stimulus measure some years ago. It is a practical way to boost cash flow and support investment, but, over the years, it has become a vital business planning tool. The problem is there's no ability for business to actually plan with this tool because there is no consistency. Each year it's implemented it is prey to politicking and becomes a political football. And it has changed over time. Usually it is for a limited time, and the thresholds keep changing. It's now at $20,000. When it was originally introduced, it was actually $150,000, but now it's back to $20,000 and is drip fed with the legislation every 12 months to extend the measure.

The amendment I move is to make this instant asset write-off permanent so that businesses can in fact have the certainty of knowing they can invest in their business, in innovation and efficiencies, ahead of time. The amendment increases it to an amount that is actually meaningful for small businesses to allow them to actually invest and boost their productivity. We know that nearly four million small businesses rely on this, and they want this. They want this to be at the $50,000 mark, and they want it to be permanent.

According to MYOB, who assist so many small businesses, nearly 60 per cent of small business would support a permanent instant asset tax write-off because the uncertainty undermines the confidence small businesses need to invest in their business. So if the government were genuine in their desire to assist small business, it would accept this amendment, because we have been calling on the government to make this instant asset write-off permanent for sometime. In the last two parliaments, we've seen this kicked around like a political football, and the people paying the price are small businesses. They are the ones who cannot invest in their business with certainty because they don't know whether the legislation will ultimately pass. In the last term of parliament, it passed on pretty much the very last sitting day, which was only a short period of time before the end of the financial year and which meant there was no ability for a business to genuinely look to this measure to invest in their business and boost their productivity.

There is a high-stakes roadmap. At a time when Australia needs policy settings that help to boost productivity and growth, we should be looking at ways to enhance investment by local businesses. The proposal to extend this doesn't provide the certainty that businesses need. When the amendment was before the House in the 2023-24 financial year, leading professional bodies, including the CPA, the Tax Institute of Australia and the Mortgage and Finance Association of Australia, all called for the instant asset tax write-off measure to be made permanent. Permanency would reduce red tape for business, government and tax agents. While the government deserves credit for continuing the scheme, it's time to stop treating this as a temporary fix. Small businesses need long-term certainty.

Also, the current $20,000 threshold does not provide the economic stimulus needed for small businesses to have confidence to grow and invest. That's why my amendment seeks to make the instant asset write-off permanent and increases the threshold to $50,000 so that businesses have got a meaningful ability to invest in their businesses. I commend the amendment to the House.

See this speech in context