Richard Colbeck (Tasmania, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Government is continuing to back business by helping them 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 3 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 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 small businesses 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 income 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 'lock-out rules' that stop small businesses that elect out of the simplified depreciation regime from re-entering it for five years will continue to be suspended until 30 June 2020.

This Bill will benefit small business, improving their cash flow and bringing forward investment.

The $25,000 instant asset write-off also reduces red-tape for small business 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 reinvest in their operations and replace or upgrade their tools and equipment.

I call on all Members and Senators to give this measure their full support.

Full details of the measure are contained in the Explanatory Memorandum.