The government’s plan to increase the threshold for the instant asset write-off to $25,000 may fail to see the light of day as time runs out before the federal election.
‘No guarantees’ for instant asset write-off increase as election looms
In January, Prime Minister Scott Morrison announced that the government would increase the small business instant asset write-off to $25,000 from $20,000, to be applicable until 30 June 2020.
While the bill was introduced on 13 February, it has still not passed the House of Representatives and the Senate.
RSM senior analyst Kane Zaknich said that with only three sitting days for the House of Representatives and two sitting days for the Senate scheduled, doubts have been raised whether the bill will be passed.
“Interestingly, the Prime Minister’s proposal to fast-track the legislation remains a challenge, particularly considering the number of outstanding bills before the Parliament and the fact there are only two remaining sitting dates in April before Parliament is dissolved,” Mr Zaknich said.
The current threshold of $20,000 will revert to $1,000 on 1 July 2019, if the proposed bill fails to go through.
“Given the backlog of legislation before Parliament, there are no guarantees that the proposed bill will be passed during the final two sitting days in April,” Mr Zaknich said.
“If the proposed bill is not passed before Parliament has dissolved, the bill will lapse. Whether the proposed measure is re-introduced will be dependent on the newly elected government.”
The government’s decision to raise the threshold comes after Labor announced that it would introduce the Australian Investment Guarantee, a permanent feature which will allow businesses to immediately deduct 20 per cent of any new eligible asset worth more than $20,000.
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