COSBOA: Instant Asset Write-Off extension a welcome move, but permanent reform needed to drive productivity

The Council of Small Business Organisations Australia (COSBOA) says the Government’s confirmation of the Instant Asset Write-Off (IAWO) through to 30 June 2026 provides long-awaited clarity for small businesses and marks a positive step forward.

In line with the outcomes from the Economic Reform Roundtable, COSBOA continues to call for a durable, long-term investment framework that genuinely supports the sector, including a permanent Instant Asset Write-Off for purchases up to $150,000.

COSBOA Chair, Matthew Addison, said that locking in the incentive is welcome; yet the ongoing cycle of short-term extensions continues to frustrate small business owners, undermining confidence and planning.

COSBOA has consistently argued that small business policy only works when it is stable, predictable and aligned with real-world operating costs.

“The current $20,000 threshold falls well short of supporting meaningful upgrades in equipment, vehicles, technology and digital tools,” said Mr Addison.

“Small businesses want to invest in machinery, digital systems and equipment that improves how they operate. We therefore need a threshold that enables genuine productivity investment, not token purchases. COSBOA maintains that a permanent $150,000 write-off is the policy setting that will deliver real economic impact.”

Mr Addison acknowledged that the extension provides useful clarity for this financial year but reiterated that enduring certainty remains essential. “Investment incentives shouldn’t be decided year-by-year. It’s time to finish the job and make the Instant Asset Write-Off permanent.”

He said a higher, permanent threshold is not just a tax measure, it is a productivity, innovation and competitiveness strategy.

“When small businesses invest, they hire, innovate and digitise. They become more efficient and more resilient. And because many of these assets are purchased locally, the benefits flow through manufacturers, suppliers and service providers.”

Mr Addison said uncertainty surrounding the IAWO has repeatedly held back investment across the sector.

“Each time this measure is left unresolved until halfway through the year, or later, businesses delay or cancel purchases. That hesitation affects productivity, growth and confidence. A permanent framework would remove this uncertainty and allow small businesses to plan properly.”

As part of the broader productivity agenda, Mr Addison said investment incentives must also be complemented by meaningful tax reform. The Productivity Commission has recommended reducing the small business company tax rate to 20%, a proposal COSBOA strongly supports. “Lowering the tax rate for small business would directly strengthen investment capacity and economic growth,” he said. “It’s an important next step that would work hand-in-hand with a permanent Instant Asset Write-Off.”

COSBOA’s long-standing position, reflected in submissions to Treasury, the Productivity Commission and multiple consultations, is that small business needs:

• A permanent Instant Asset Write-Off

• A threshold aligned to real operating costs (at least $150,000)

• Clear and timely communication from Government

• Predictable, long-term policy settings that support investment and planning

Mr Addison said delivering stability in this area would recognise the broader importance of small business to Australia’s economic performance.

“Small businesses employ more than five million Australians and contribute hundreds of billions to the economy,” he said. “If we want a stronger, more competitive economy, we need to give small business the confidence to invest. A permanent IAWO is one of the simplest, most effective steps the Government can take.”

COSBOA will continue working with Government, Treasury and MPs to ensure long-term, reliable investment incentives remain front and centre in the policy agenda.

For more information on COSBOA, visit: cosboa.org.au.

-ENDS-

For media enquiries or interviews, please contact Matthew Addison, Chair, COSBOA on chair@cosboa.org.au or call +61 (0) 421 553 613.

About COSBOA

Established in 1979, The Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.