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$20,000 instant asset write-off extension welcomed, but calls for broader support grow
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$20,000 instant asset write-off extension welcomed, but calls for broader support grow
The Australian government's decision to extend the $20,000 instant asset write-off into the next financial year has been met with approval from business leaders. However, there are growing calls for more comprehensive support measures to address ongoing economic challenges faced by small-to-medium businesses (SMBs).
$20,000 instant asset write-off extension welcomed, but calls for broader support grow
The Australian government's decision to extend the $20,000 instant asset write-off into the next financial year has been met with approval from business leaders. However, there are growing calls for more comprehensive support measures to address ongoing economic challenges faced by small-to-medium businesses (SMBs).
Ian Boyd, General Manager for Australia and New Zealand at GoCardless, expressed his support for the extension, highlighting its importance in the current economic climate. "We have been big advocates of the $20,000 instant asset write-off for years, so we’re very happy to see it extended into next year. For as long as inflation remains sticky, initiatives like this are key to providing businesses the breathing room needed to keep their financial situation steady," Boyd said.
Despite this positive step, Boyd emphasised the need for a more extensive support strategy for SMBs. He pointed out that the current measures are insufficient to address the financial pressures businesses face. "What is needed in addition to the write-off is a more comprehensive long-term support strategy for small-to-medium businesses. We need to encourage patrons to support local businesses and to ease the pressure of slow cash flow and escalating overheads," he stated.
Boyd also addressed the issue of payment surcharges, arguing that the proposed ban on card surcharges does not adequately address the financial burden on businesses. "We need a full review of all payment surcharges to ensure businesses aren’t being overburdened with unavoidable costs that impact the bottom line and harm customer relationships," he said.
Furthermore, Boyd highlighted the challenges businesses face in recouping outstanding payments, citing findings from GoCardless's Pursuing Payments report. "Our latest Pursuing Payments report revealed that more than 1 in 3 businesses have turned to credit facilities because late payments have impacted their cash flow. Clearly, the $20k instant asset write-off isn’t enough for businesses to keep their heads above water," he explained. Boyd advocated for greater incentives for businesses to adopt automated payment solutions, such as Direct Debit and PayTo, to improve cash flow management.
Rob Dunn, General Manager for Benefits and Superannuation at Employment Hero, echoed Boyd's sentiments regarding the importance of the instant asset write-off for small businesses. "This legislation is critical for small businesses. By easing cash flow pressures and reducing the tax burden, it frees up capital for owners to invest in better tools, expand their services and hire more staff," Dunn stated.
Dunn also highlighted the challenges posed by rising employment administration costs due to regulatory changes, such as the upcoming Payday Super laws. "It’s especially important in an environment where we continue to see the cost of employment administration rising for small businesses due to constant regulatory change and new compliance obligations, such as the Payday Super laws commencing on 1 July 2026," he said.
While the extension provides some relief, Dunn called for more permanent solutions to support small businesses in the long term. "But we can’t keep relying on one-year-at-a-time extensions. Annual changes force employers to operate in uncertainty when they should be planning ahead," he argued. Dunn stressed the need for stable tax settings to enable businesses to invest confidently in their operations and workforce. "In a rapidly changing economic environment, small businesses need a permanent instant asset write-off. When employers can rely on stable tax settings, they invest more confidently in their operations and, most importantly, in their people," he concluded.
The extension of the $20,000 instant asset write-off is a welcome development for small businesses, providing them with some financial relief amid ongoing challenges. However, as Boyd and Dunn have highlighted, there is a pressing need for more comprehensive and permanent support measures to ensure the long-term sustainability and growth of SMBs in Australia.
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