Senate committee backs the $20,000 instant asset write-off — while Coalition senators push for $50,000

Every senator on the committee backed passage. There was no dissenting report. The argument at the time was not over whether the measure would happen, but how big the number should be. Coalition senators wanted $50,000. The Act that received royal assent on 26 August 2026 left the threshold at $20,000.

What the committee actually said

Recommendation 1: the bill be passed.That's the whole of it, and there was no dissent.

The committee said it was encouraged by the level of support for the measure, and noted the package is broadly revenue-neutral over the forward estimates. It also recorded — without acting on — three sets of calls it heard:

• —to raise the $20,000 threshold
• —to lift the eligibility ceiling from $10 million to $50 million in turnover
• —to index the threshold, and to abolish the simplified depreciation lock-out rule outright

Coalition senators filed additional comments. They support passage, but say Schedules 1 and 2 “do not go far enough”, and recommend amending the Bill to lift the instant asset write-off threshold to $50,000.

Additional comments carry no procedural force, and no amendments were formally circulated. A major party recommending $50,000 meant “passes exactly as announced” was not the only outcome on the table. In the event, the Act passed with the $20,000 threshold unamended.

What the inquiry heard

The submissions pushed harder than the Coalition's $50,000.

COSBOA and the Commercial & Asset Finance Brokers Association both argued for a $150,000threshold. Skye Cappuccio, COSBOA's Chief Executive Officer, told the committee on 27 July that at the current level the concession “supports a new laptop, a new coffee machine, perhaps a trailer, but it falls far short of the new vehicle or equipment that enables a tradie to support an additional staff member.”

That matches what we see in applications. Twenty thousand dollars doesn't buy an excavator, a prime mover, or a delivery van. The assets that genuinely change what a small business can do mostly sit well above the line, which makes the write-off's practical reach narrower than the headline number suggests.

CPA Australia, the Urban Development Institute of Australia and the Housing Industry Association separately argued the threshold should be indexed. COSBOA's standing position is that $150,000 should be indexed to inflation.

What nearly everyone agreed on is the part that matters most: making it permanent. The annual guessing game over whether the concession survives another Budget has been the real problem, more than the number itself.

Why the delay matters

Because the fallback isn't a smaller write-off. It's a much smaller one.

As the Parliamentary Library's Bills Digest put it at the time, absent this amendment the threshold would have reverted to $1,000from 1 July 2026. Not $20,000. Not last year's settings. One thousand dollars.

That was a twentyfold difference, and it landed on decisions operators were making then. A business buying a $19,000 machine in September would have been making a very different call depending on which threshold applied.

The 2025-26 income year was unaffected. Those settings were legislated separately and were already law. It was this financial year that was unresolved, until royal assent on 26 August 2026.

Two smaller pieces of the same Act are now also law. The small business pool write-off threshold is $20,000. And the suspension of the simplified depreciation lock-out rule runs through to 30 June 2027.

The timeline

Also in the Bill: loss carry-back

This has had almost no coverage. The same Act lets companies(corporate tax entities that aren't significant global entities) carry a tax loss back against tax paid in either or both of the two previous income years, as a refundable tax offset.

Two things to know before you get excited. It's capped at the company's franking account balance at the end of the loss year. And it's restricted to corporate tax entities — so ordinary family trusts, ordinary partnerships and sole traders are out. There are also lodgement requirements covering the current year and the five preceding years.

If you're incorporated and you've had a difficult year following two profitable ones, it's worth raising with your accountant.

What to do now that it is law

The bit most coverage skips: you don't have to pay cash

This is what we get asked about most, and it's genuinely misunderstood.

The write-off is based on the asset's costand when it's first used or installed ready for use. It isn't based on how much you've paid the supplier out of your own pocket.

Buy a machine under a chattel mortgage, put down a deposit, have it installed and running before year end, and you're generally claiming on the asset's cost — not on the deposit. The loan and the deduction are separate questions.

Two limits on that. The interest isn't part of the cost — finance charges are deductible separately over the term, not written off up front. And the deduction is limited to the business-use portion: if the asset is 70% business, so is your claim.

Finance leases work differently. Under a lease the lessor holds the asset, so there's no depreciation for you to claim and no write-off. You still deduct the lease rentals — you lose the timing benefit, not the deduction entirely. We've set out the differences in our guide to hire purchase, chattel mortgage and lease.

We'll keep this updated

The Bill received royal assent on 26 August 2026. The $20,000 threshold was not amended. Our instant asset write-off guide has the current rules, including the low pool value threshold and the lock-out suspension through to 30 June 2027.

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