Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Josh Frydenberg MP)General outline and financial impact
Amendments to Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019
The amendments to the Bill:
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- increase the threshold below which small business entities can access an immediate deduction for depreciating assets and certain related expenditure (instant asset write-off) from $25,000 to $30,000; and
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- enable businesses with aggregated turnover of $10 million or more but less than $50 million to access instant asset write-off for depreciating assets and certain related expenditure costing less than $30,000.
The amendments to the Bill complement the existing instant asset write-off. The instant asset write-off is currently available until 30 June 2019, and the Bill extends its operation until 30 June 2020.
Date of effect: The amendments apply from 7.30pm by legal time in the Australian Capital Territory on 2 April 2019.
Proposal announced: The amendments were announced on 2 April 2019 in the 2019-20 Budget and implement the measure, 'Increasing and expanding access to the instant asset write-off'.
Financial impact: The amendments are estimated to result in a reduction in revenue of $400 million over the forward estimates period comprising:
2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 |
- | -$200m | -$500m | $50m | $250m |
- Nil
Human rights implications: The amendments do not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.1 to 2.6.
Compliance cost impact: The amendments are estimated to result in annual regulatory savings for affected businesses.