Threshold set to drop significantly in three months
Small and medium-sized enterprises (SMEs) aiming to take advantage of the $20,000 instant asset write-off now have until June 30 to purchase and install equipment after the policy was scrapped in the 2025 Budget.
Without further government action, the threshold is set to drop back to $1,000 from the next financial year, potentially impacting capital investment plans.
ScotPac chief executive Jon Sutton (pictured above) highlighted the uncertainty caused by the decision, noting that it could create challenges for SMEs that had factored the write-off into their capital expenditure plans.
“Businesses have come to rely on the write-off rules in recent years to help upgrade or replace essential assets like vehicles and trailers, computers and printers, and power tools and equipment,” Sutton said.
ScotPac’s latest SME Growth Index Report revealed that 59% of Australian SMEs intend to invest in their businesses in the six months leading up to August 2025. However, Sutton warned that the Budget’s changes to the write-off scheme could derail these plans, especially as SMEs already grapple with rising wages, superannuation costs, and other compliance expenses.
Research conducted by ScotPac after the write-off cap was reduced to $20,000 in July 2023 found that 61% of SMEs adjusted their spending plans immediately, while another 20% delayed investments by six to 12 months. Similarly, a report from non-bank lender Banjo Loans indicated that nearly half of SMEs have been postponing planned investments due to ongoing inflation and cashflow challenges.
Sutton encouraged SME owners and operators to revisit their capital expenditure strategies with their advisors in response to the Budget changes.
“SMEs planning major asset purchases should carefully consider all available funding solutions so they don’t miss a critical investment opportunity,” he said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
