Instant asset write-off should not have become an election issue
Content Summary
- CPA Australia supports promise to make instant asset write-off permanent
- Business community should not be stuck in the middle of political fight
- First home buyer super access plan is misguided.
CPA Australia today welcomes Opposition Leader Peter Dutton’s promise to make the instant asset write-off permanent and increase the limit to $30,000 if it wins the federal election but says it should never have become a political football.
The announcement comes after the government failed to address the future of instant asset write-offs in Tuesday night’s federal Budget. As it stands the current $20,000 measure, which was passed by the Senate late last night, will expire on July 1 and revert to just $1000 for businesses with revenue up to $10 million a year.
CPA Australia Chief Executive Officer Chris Freeland says the Coalition’s pledge to make the instant asset write-off threshold permanent at $30,000 is the right call for small business, but the business community should not be stuck in the middle of a political fight.
“The instant asset write-off provides a vital opportunity for small businesses to invest and grow,” Mr Freeland said.
“As a temporary measure only, it has not been utilised as much as it could have. Small businesses in particular need policy certainty to make informed investment decisions, especially when they involve significant financial commitments.
“The practice of legislating this measure annually has created uncertainty and has discouraged investment at a time when many businesses are keen to take advantage of such incentives.
“The instant asset write-off has been a low-hanging fruit that small businesses have been hoping to utilise – but many have resisted because of the fear that it would be taken away. Businesses cannot operate like this.
“The instant asset write-off should have been made permanent in the federal Budget – instead the business community was left to sit and wait even longer. This shouldn’t have become a political football.”
Mr Freeland also welcomed the Opposition’s plan to cut fuel excise in half for the 2025-26 financial year but said politicians need to move aware from short-term election sweeteners and focus on substantive long-term reforms to the tax system.
“The promise to reduce the fuel excise will be welcome news for many sole traders and businesses with high transport expenses,” he said. “Helping to cut costs in the supply chain would also have a positive flown-on effect to other small businesses and consumers.
“Whether it’s modest income tax cuts or a temporary reduction in fuel excise, both sides appear stuck in a cycle of short-termism, but we need fundamental tax reform to make a substantive difference to economic growth and prosperity in the long term.”
Mr Freeland also supports the Opposition’s pledge to cut regulation where there is duplication, but warns against allowing first home buyers to access $50,000 from their superannuation.
“This first home buyer measure will not resolve structural housing affordability issues,” said Mr Freeland. “This is more likely to worsen the problem than solve it.”
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