Small business let down by short-term sweeteners

COSBOA and CAFBA call for permanent and increased threshold for Instant Asset Write-off (IAWO)

Industry groups have issued a subdued response to the government’s announcement to extend the Instant Asset Write-off (IAWO) for a further 12 months.

As an election sweetener, Labor has committed to the tax-driven investment incentive for small business until June 2026.

But Council of Small Business Organisations Australia (COSBOA) CEO, Luke Achterstraat said the IAWO should have been made permanent in the budget. “Small businesses need certainty and are fed up with the annual game playing regarding the program. The $20,000 threshold needs to be significantly boosted to $150,000. The $20,000 is already insufficient and has been eaten away by inflation over the last decade.”

Commercial and Asset Finance Brokers Association of Australia (CAFBA) Advocacy Chair, David Gandolfo OAM, agrees adding, “This is cynically announced as an election grab instead of in the budget papers where it should be.”

In their respective pre-budget submissions to Treasury, both COSBOA and CAFBA lobbied for an increase to $150,000 and to make the measure permanent.

Challenging the Prime Minister’s comments that “We want people to invest now”, and “If you just leave it there, then there’s no incentive”, Gandolfo said, “The government’s Future Made in Australia ambition will never be achieved by incentivising business to buy coffee machines and hand tools. Increased production capacity is only achieved by businesses investing in infrastructure assets that will increase production and create jobs. The tax foregone in one fiscal year is recovered with greater productivity in subsequent years, along with stronger GDP and employment growth.”

Assets purchased under the IAWO are generally bought within Australia, significantly stimulating sales in the manufacturing sector. Those increased sales are taxable at full company rates. Additionally, the accounting and compliance cost of depreciating low-value assets will also decrease – a practical benefit for small businesses and their advisers.

“Major corporations don’t vote, but small business owners do, and both major parties need to lift their game to appeal to this major employer and critical electorate sector,” Achterstraat concluded.

For more on COSBOA small business policy, visit: cosboa.org.au.

-ENDS-

For media enquiries or interviews, please contact Luke Achterstraat, Chief Executive Officer, COSBOA on ceo@cosboa.org.au or call +61 (0) 433 644 097.

About COSBOA

Established in 1979, The Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.

For more information, visit www.cosboa.org.au