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The broker association and COSBOA have slammed Labor’s decision to temporarily extend the instant asset write-off by one year, calling for it to be made permanent.
Industry bodies have blasted the Albanese government’s one-year extension of the instant asset write-off (IAWO) scheme, calling for it to be increased and made permanent.
After receiving criticism for its decision not to reinstate the $20,000 IAWO in its federal budget for the financial year 2026, Labor last week committed to extend the scheme for another year should it win the upcoming federal election.
However, industry associations have said that Labor’s extension does not go far enough, with the Commercial and Asset Finance Brokers Association of Australia (CAFBA) joining with the Council of Small Business Organisations Australia (COSBOA) to call on the government to increase the $20,000 threshold and make the scheme permanent.
In a joint statement, the two organisations said Labor’s one-year commitment meant small businesses would be “let down by short-term sweeteners”.
In their respective pre-budget submissions to Treasury, both COSBOA and CAFBA lobbied to increase the IAWO to $150,000 (as was the case during the peak pandemic years 2020–23) and to make the measure permanent.
Commercial broker and CAFBA advocacy chair David Gandolfo expressed disappointment that the government had not included mention of extending the scheme in its federal budget last month: “This is cynically announced as an election grab instead of in the budget papers where it should be.”
Meanwhile, COSBOA CEO Luke Achterstraat said: “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.
“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.”
Push for further reforms
The calls echoed those made by the Mortgage and Finance Association of Australia (MFAA), which had recommended the scheme be made permanent in its pre-budget submission.
On Friday (4 April), it described Labor’s extension as “good news for small businesses”.
However, the association favoured the Coalition’s pledge to make the write-off permanent and raise the cap to $30,000 for businesses with an annual turnover of up to $10 million, saying it could “make a difference for small business planning and investment”.
“On the instant asset write-off, while Labor’s pledge is a nice one, we’re backing the Coalition’s move. A permanent scheme gives small businesses the certainty they need, and a $30,000 cap provides a meaningful incentive to invest and grow,” it said.
Prior to the Albanese government’s announcement, the Coalition had strongly criticised Labor for not including the write-off extension in the federal budget, saying that it would fall to just $1,000 from 1 July 2025 unless further action was taken.
Deputy Opposition Leader and shadow minister for small and family business, Sussan Ley, had described Labor’s handling of the measure as “inexcusable.”
“In stripping back the instant asset write off last night, Labor has raised a new tax on small businesses at the worst possible time,” Ley said last month.
“Our iconic cafes and restaurants have been hammered by Labor’s high-cost economy, and we have lost one in ten hospitality businesses as a result.”
[Related: Labor commits to instant asset write-off extension if re-elected]
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