Labor Targets Small Businesses with New Tax Hike
The Australian Labor Party has cemented its status as the enemy of small business by axing the Instant Asset Write Off, increasing taxes on small business.
This is bad economic policy and will hit small business cash flow by tens of thousands of dollars.
It also means Anthony Albanese and Jim Chalmers will go to the Federal Election proposing higher taxes on small businesses at a time when insolvencies continue to surge.
The Instant Asset Write Off – which currently allows small and medium-sized businesses to instantly depreciate assets worth $20,000 – will not be extended into the 2025-26 financial year. Labor’s failure to budget for it means that the asset threshold will drop to just $1,000 from July 1, 2025.
Labor actions will hit small businesses, kill cash flow and put more jobs at risk.
In the 2024 budget reply, the Leader of the Opposition Peter Dutton committed the Coalition to make the instant asset write off permanent at an asset cap of $30,000 for small businesses with turnover of up to $10 million.
The contrast could not be clearer, Australian small businesses will get a permanent $30,000 Instant Asset Write Off under a Dutton Coalition Government or just $1,000 under another three years of this economically incompetent Albanese Labor Government.
Deputy Leader of the Opposition and Shadow Minister for Small and Family Business, Sussan Ley, said Labor’s decision to kill the Instant Asset Write Off is inexcusable and will push more small businesses to the wall.
“In stripping back the Instant Asset Write Off last night, Labor has raised a new tax on small businesses at the worst possible time,” the Deputy Leader said. “Anthony Albanese is a weak leader with the wrong priorities – as a direct consequence of his economic failures, 29,000 businesses have gone bust since Labor took office. Countless other businesses, only just surviving, will be hit by this tax increase.”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. We cannot afford three more years of Labor”
Shadow Treasurer Angus Taylor said Labor’s Budget is a plan for an election, not one for our country’s future prosperity and the axing of the Instant Asset Write off is a clear example of that.
“Australia’s small and family businesses are the lifeblood of our communities but Labor’s Budget has abandoned them,” Mr Tayor said.
“Labor’s big spending, big government agenda is building bureaucracies but not businesses.
“Making the Instant Asset Write Off permanent means 98 per cent of businesses will no longer have to deal with depreciation schedules for investments under $30,000. This will free up cash for businesses to invest, take risks and create jobs and opportunities for all Australians
“We need more small businesses, and we need more small business growing into bigger employers.”
The Instant Asset Write Off was introduced by the Coalition in the 2015 budget and has been extended on an annual basis every year since. It allows small businesses to immediately write off investments up to a capped value. This both incentivises investment, reduces small business tax liability, increases small business cash flow, and saves compliance costs, meaning small businesses do not have to deal with the complexity of depreciation schedules.
https://www.liberal.org.au/2025/03/26/labor-heads-to-election-with-new-small-business-tax-increase