Second Reading SpeechMr ROBERT (Fadden-Assistant Treasurer)
That this bill be now read a second time.
This government is continuing to back business by helping them to invest and grow by increasing and extending the instant asset write-off. This bill will increase the instant asset write-off threshold from $20,000 to $25,000 and extend it until 30 June 2020. The increased threshold applies from announcement on 29 January 2019.
Across Australia, there are over three million small businesses with an annual turnover of less than 10 million that are eligible to access the $25,000 instant asset write-off. These small businesses employ around 5.7 million Australians or employees.
The government has built on the very successful $20,000 instant asset write-off first introduced by the government in the 2015-16 budget. The government's $25,000 threshold will improve cash flow by enabling business to immediately deduct purchases of eligible assets, each costing less than $25,000.
There is no limit on the amount of assets that a business can purchase. Assets valued at $25,000 or more can be placed into the small business simplified depreciation pool and depreciated at a rate of 15 per cent in the first income year and 30 per cent each year thereafter. The pool itself can also be immediately deducted if its value falls below $25,000 at the end of the financial year.
To facilitate access to this measure, the lockout rules that stop small businesses that elect out of the simplified depreciation regime from re-entering for five years will continue to be suspended until 30 June 2020. This bill will benefit small businesses, improving their cash flow and bringing forward investment. The 25,000 instant asset write-off also reduces red tape for small businesses as they no longer need to track the annual depreciation for assets that are written off immediately or maintain detailed records substantiating their depreciation claims. It will boost small-business activity and encourage more small businesses to re-invest in their operations and replace or upgrade their tools and equipment.
I call on all members and senators to give this measure their fullest support. Full details of the measure are contained in the explanatory memorandum and I commend the bill to the House.