Small Business Needs Certainty

The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, is urging Federal Parliament to give certainty to small business about two crucial tax breaks announced in last year’s budget.

“Time is running out with just six weeks until the end of the financial year for small business to claim these deductions, but they still don’t know if they’re allowed to make the claims,” Mr Billson said.

“We’re hearing from confused small businesses who just want certainty.”

“I encourage the Parliament to act swiftly to guarantee these small business tax incentives.”

The two measures relate to the instant asset write-off and a tax-incentive for energy efficiency upgrades.

The legislation would set the instant asset write-off at $20,000 for businesses with a turnover of up to $10 million, allowing them to deduct up to that amount for eligible assets between 1 July 2023 and 30 June 2024.

(The Treasurer announced in this week’s budget the scheme would be extended to 30 June 2025.)

Without legislation authorising the change, small businesses can only write-off $1000 for eligible assets and then apply general depreciation rules.

Similarly, the small business energy incentive worth up to $20,000, announced in April 2023 ahead of last year’s budget, will provide an additional 20 per cent depreciation for eligible assets that support electrification and more efficient use of energy by small businesses.

The bonus will be available to businesses with an annual turnover of less than $50 million and is aimed at helping them save on energy bills by making investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

“The scheme requires eligible assets or upgrades to be first used or installed ready for use between 1 July 2023 and 30 June 2024, but with the legislation still not passed time is fast running out for small businesses to meet that deadline,” Mr Billson said.

“This uncertainty has highlighted the need for predictability and certainty so a small business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business.

“Right now, we need to be energising enterprise. We need to be giving more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success of that enterprise and the livelihoods that depend upon it.

“Having that encouragement to invest in new kit, new plant and equipment, new technology is really an important signal, but what’s needed is the certainty that these tax breaks are real.”

The instant asset write-off is an ongoing incentive with the amount and threshold set each year. The energy incentive is a one-off scheme that ends in six weeks.

Concerned small businesses should seek advice from their accountant, bookkeeper, tax agent or trusted adviser and refer to for more information.

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