Senate

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:

•

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

•

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:

- 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.