Instant asset write-off extended  but experts want the government to lock it in

Small business owners have been thrown a lifeline with the Albanese Government officially extending the $20,000 instant asset write-off until 30 June next year.

The legislation, which was passed on the last sitting day of parliament, is a win for any business owners looking to upgrade tools, buy new tech or replace old equipment without the complication of depreciation schedules.

Treasurer Jim Chalmers and Minister for Small Business Anne Aly said the changes will support confidence, encourage investment and help keep the economy ticking along.

“This will help small businesses to invest and grow, improve confidence in our markets and ensure a fairer energy market for Australian families,” the joint statement said.

Up to 4.1 million small businesses with turnover under $10 million are expected to benefit.

Cracking down on bad behaviour and cleaning up the system

The extension is part of a broader package, the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025, which also aims to tidy up some long-standing issues in the financial and energy sectors.

The government says the new laws will crack down on energy market misconduct, improve transparency around the ownership of publicly listed companies and strengthen oversight of charities to help maintain donors’ trust.

Meaning less shonkiness in the system and more clarity for everyday Aussies.

“Labor will always back in Australian small businesses, industries and workers, as part of our efforts to build a more productive and resilient economy,” the statement said.

Accountants: “Great news, but can we please stop doing this every year?”

While the extension has been broadly welcomed, the small business community is still stuck in the yearly wait-and-see cycle. Chartered Accountants Australia and New Zealand (CA ANZ) says that needs to change.

CA ANZ Tax and Superannuation Leader Susan Franks said the latest extension is helpful, but the ongoing uncertainty around the measure is wearing thin for business owners and advisers alike.

“This extension is a positive step, but the ongoing uncertainty around the instant asset write-off each financial year creates unnecessary uncertainty for small business owners,” she said.

Since 2015, governments of all stripes have tinkered with the write-off thresholds and timelines, often announcing changes at the eleventh hour. That leaves small business owners scrambling to decide whether to upgrade their laptops, replace the coffee machine or invest in software before June hits.

“It is encouraging that this latest extension for the 2025–26 financial year was able to pass in November, but a more concrete solution needs to be found,” Franks said.

Why accountants want it locked in permanently

Franks says making the write-off permanent would be the simplest way for the government to cut red tape, something it has repeatedly said it wants to do.

“The instant asset write-off allows small businesses with annual turnover under $10 million to avoid identifying what purchases under $20,000 need to be depreciated and, if they find any, working out how they should be depreciated,” she said.

That immediate tax relief can be a lifesaver for cash flow, especially for micro businesses operating on thin margins.

“The main benefit of this initiative is its immediate tax relief, which can help with cash flow. Making the instant asset write-off permanent would deliver certainty and reduce red tape for business, government and tax agents,” she said.

After years of back-and-forth, CA ANZ says it’s time to stop playing policy ping-pong.

“We’ve advocated, for some time, for policymakers to make the instant asset write-off permanent and with the government looking for ways to reduce red tape in the tax system for business, this would be a simple way to achieve this goal,” Franks said.

Small businesses now have another 12 months of breathing room. Whether the government chooses to put an end to the annual guessing game… well, we’ll all be watching next year’s Budget papers to see.

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