Political Stalemate Leaves Small Businesses in Limbo
A significant policy designed to benefit millions of small businesses remains stuck in the House of Representatives, leaving many owners frustrated and uncertain. The amendment to the instant asset write-off provision, which would increase the tax break amount from $1,000 to $20,000, has been caught in a political tug-of-war between the major parties.
Tasmanian cafe and hotel owner Rachel Power, who was initially excited about the higher threshold, now finds it too late to benefit from the promised tax break. The current limit of $1,000 is hardly worth the effort of claiming, according to many small business owners.
The bill, introduced in September 2022, has bounced between the Senate and the House of Representatives several times. The sticking point is the asset price threshold, with the Coalition and Greens wanting to increase it to $30,000, while Labor insists on keeping it at $20,000.
This political gridlock has left many small businesses in limbo, unable to plan their investments with certainty. The ABC understands the Coalition will ultimately agree to the $20,000 threshold, but the delay means the bill might not be passed until the final week of June, leaving many businesses without the promised support.
Small Business Council CEO Luke Achterstraat believes both sides of politics have mishandled the situation, creating unnecessary uncertainty for small businesses. Veteran budget commentator Chris Richardson agrees, calling the political gamesmanship a "dumb example" that hurts good decision-making by small businesses.
This year's federal budget offers to extend the $20,000 instant asset write-off for another 12 months, but again, it requires parliamentary approval. Given the concerns about inflation, the political stalemate might have inadvertently prevented a surge in business spending that could have further fueled inflation.