The government’s instant asset write-off expansion was passed through the Senate yesterday afternoon and is expected to be voted on in the lower house later today.
Part of a post-budget blitz that saw 28 bills passed by the Upper House on Wednesday, the passage of the reforms will put the coalition in a stronger position with small business ahead of the federal election.
Treasurer Josh Frydenberg announced an expansion of the instant asset write-off in the 2019-20 budget on Tuesday, proposing a cap increase from the legislated $20,000 to $30,000.
Medium-sized firms with revenue up to $50 million annually will now also have access to the scheme, which allows businesses to immediately depreciate eligible asset purchases through to June 30, 2020.
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There was uncertainty over whether the government would pass the measures before the election, with Minister for Small and Family Business Michaelia Cash yesterday saying they intended to take the budget to the election.
However, by making amendments to a February bill to increase the cap from $20,000 to $25,000 in the Senate yesterday afternoon, the government was able to pass the reforms.
Businesses who purchased assets “first used or installed ready to be used” before budget night (April 2) will only be able to claim under the $25,000 cap, but eligible assets purchased after that point will be eligible for the $30,000 cap.
The legislation will now revert back to the House of Representatives today where it is expected to be passed.
Labor has supported the bill, effectively incorporating the coalition policy into its own framework alongside the Australian Investment Guarantee, which focuses on assets valued above $20,000.
The government’s $2 billion business securitisation fund legislation, which is designed to improve small business access to finance, also passed through the Senate yesterday with support from the opposition.
The latest extension of the write-off is expected to save SMEs $700 million over the next few years and was the most significant new measure for small business introduced in the budget earlier this week.
Small businesses have responded positively to the move ahead of the election, although the government has again shot back calls to make the scheme permanent.
There has also been concern about the communication and accessibility of the scheme, with the government convening an advisory group to review the state of business.gov.au.
The advisory group will make recommendations to government about the operation of the information website and its function as a one-stop-shop for small businesses looking to get better information about government policy.
Improvements to the functionality and usability of the site are expected, while the possible creation of a mobile application is being considered.