Small businesses will get a 12-month reprieve and be able to instantly write-off another $20,000 in expenses, if Labor wins next month’s federal election.
Labor has moved to neutralised a similar Coalition policy but fell short of outright matching the opposition’s policy.
If elected, the Coalition would make permanent a $30,000 instant asset write-off for small businesses.
Prime Minister Anthony Albanese said the 12-month extension would allow businesses to buy new tools and upgrade their equipment and defended not making the tax incentive permanent.
“Because what you want to do is to encourage them to invest now,” he told ABC Radio Sydney.
“That’s the whole point, so that you create that economic activity and the multiplier that flows through immediately, rather than say, ‘oh well don’t worry, sometime in the future, forever, you can do this’.
“We want to encourage that economic activity now from small business and tradies.”
Mr Albanese and Opposition Leader Peter Dutton are campaigning in western Sydney, where they’re eager to win the support of cafe owners, tradies and other small business operators.
Mr Dutton used his budget reply speech to unveil the $30,000 commitment.
Policy would extend for the next financial year under Labor
Instant asset write-offs, of varying degrees, have been available for small businesses for years.
It means a business can purchase equipment and then deduct the cost from its taxable profit.
In the dying hours of parliament before the election, Labor managed to pass a 12-month extension for this financial year.
The new announcement would see the policy extended for the next financial year and available for businesses with an annual turnover up to $10 million.
Mr Dutton, campaigning in Western Sydney, said the government was merely trying to patch a problem of its own making.
“Let’s look at a local tradie in Western Sydney. Under Mr Albanese on budget night was told that you could have an instant asset write-off for a purchase but capped at $1,000,” he said.
“Now, the government doesn’t believe in this.
“What they have done now by flipping it to $20,000 is to try and patch up a problem of their own making to get them through the election and then I think it reverts back to $1,000.”
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