Greens push for change to $20,000 instant asset write-off to encourage SMEs to embrace renewable energy
Tuesday, June 26, 2018/
In an unexpected move, the Australian Greens party have attempted to push an amendment to the highly popular instant asset write-off for small businesses through the House of Representatives, seeking an additional write-off scheme with a higher expenditure limit for clean energy assets.
As part of debate last week on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018, Greens member Adam Bandt moved an amendment to the bill that would seek to “give extra support to businesses wanting to cut pollution”.
“One of the best ways that businesses can take steps to cut pollution is by investing in new assets, and one of the best ways that Parliament can support that is by giving targeted tax breaks to industries and businesses that decide to do that,” Bandt said in parliament.
The amendment would have seen a new write-off scheme introduced with a $30,000 expenditure limit, to be used when small businesses spent capital on assets relating to clean energy or energy efficiency. This would be in addition to the existing $20,000 tax break, which was extended for another 12 months in this year’s budget.
Furthermore, this new write-off scheme would be permanent, in contrast to the government’s practice of extending the $20,000 instant asset write-off in yearly increments.
Despite the potential benefits for Australian small business owners, the Greens’ amendment was negatived. The bill is currently set to be debated in the Senate this Thursday to approve its extension into the 2018-19.
Speaking to SmartCompany, Bandt said the Greens had introduced the amendments because he believes the government should be doing more to encourage small businesses to switch over to renewable energy sources.
“The government has no energy policy for small businesses, and there are a few areas where there should be incentives. One is fuel switching, the government should give small businesses an incentive to switch away from fossil fuels,” he says.
“We think businesses should get a greater level of government support if they’re investing in energy efficiency or switching from fossil fuels to renewables, so the instant asset write-off should be increased to support this.”
Bandt says many small businesses are already using the current $20,000 write-off to invest in solar power for their business, and an additional, permanent $30,000 scheme would help SME owners look into the future and plan for renewables long-term.
The Greens will continue to push for the changes, with Bandt hopeful the government will be open to implementing them, considering they did not speak against the amendment in Parliament.
COSBOA supports renewables push
The $20,000 instant asset write off was first introduced in 2015, and since then the government has continued to extend the legislation each year as part of its budget announcements.
Speaking to SmartCompany, Council of Small Business Australia (COSBOA) chief executive Peter Strong believes the government has been reluctant to make the scheme permanent, as yearly extensions mean it continues to have good news for small business to announce each budget. He believes its a “bit odd” the latest extension still has not passed through the Senate but expects it will with bipartisan support.
“The government makes the same announcement every year, and every year we all say how happy we are. Once they make it a permanent fixture, they think we’ll start asking for more, which is probably true,” he says.
Strong supports the Green’s move to for a scheme with a higher expenditure limit for renewable assets but is concerned it could add additional complexity into the process for small business owners. Strong would prefer to see the limit raised to $30,000 for all assets.
He’s also pushing for a larger, once-off write-off provision for business owners who want to get a tax break for more than $20,000 worth of assets, and says COSBOA is happy to work with the government to improve the popular scheme.
Social media mishaps: Why businesses should think twice before cracking jokes online Catriona Pollard CP Communications founder
An ‘opportunity-hunting’ generation: Here's what millennial workers need and want Karen Gately Corporate Dojo founder
Spilling the beans: Why inviting someone to 'grab a coffee' is disingenuous and unnecessary Sue Parker DARE Group founder
The 10 most unemployable job titles on LinkedIn Ian Whitworth Scene Change co-founder
How Emily McWaters manages her Sydney-based business from Kangaroo Island Emily McWaters The Hamper Emporium chief
Why 'Orwellian' performance monitoring is crucial to building an ethical company culture Michael Kodari Kodari Securities chief