Election 2025: Anthony Albanese on back foot over ‘underwhelming’ small business tax breaks

The Prime Minister has defended the duration and size of Labor’s promised small business tax break.

Anthony Albanese in Blacktown, western Sydney. Picture: Jason Edwards / NewsWire

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Anthony Albanese has defended the duration and size of Labor’s promised small business tax break, arguing the 12-month measure will encourage firms to “invest now” and is appropriate given the constraints on the federal budget.

The policy, which marks a one-year extension of Labor’s existing “instant asset write-off”, enables businesses with a turnover up to $10m to claim the cost of new assets such as machinery, plant and equipment worth up to $20,000. But the announcement has been branded as “underwhelming” by the small business sector, a key constituency during the election campaign.

“Quite frankly it’s a day late and a dollar short,” said Andrew McKellar, the chief executive of the Australian Chamber of Commerce and Industry.

Pointing to the last two years where the temporary tax break passed parliament more than six months after it was initially announced, Mr McKellar pressed for the measure to be made a ­permanent feature of the tax ­system.

“If the government really wants to support small business, it would make the instant asset write-off permanent,” he said. “Treating a measure which dictates how small businesses make decisions to invest in capital as a year-to-year proposition just doesn’t measure up.”

Australian Chamber of Commerce and Industry chief Andrew McKellar. Picture: NewsWire / Martin Ollman

Asked on Friday why Labor’s policy wasn’t as generous as the opposition’s proposal, the Prime Minister argued the government’s stance would be more ­effective.

“It’s not permanent because we want people to invest,” he said in western Sydney. “If you just leave it there, then there’s no incentive to go out there and make sure that you tool up your business.

“We think $20,000 is a fair amount for businesses. We have to balance up our fiscal ­responsibility.”

The instant asset write-off has previously proved popular among builders and other tradespeople, who have taken advantage of the tax offset to purchase vehicles such as utes and SUVs.

Master Builders Australia chief executive Denita Wawn supported Labor’s plan to extend the tax break, but advocated for the $10m turnover threshold to be raised as elevated construction costs meant more small businesses were excluded.

“We are seeing in the industry more and more small businesses who are no longer eligible for relief despite rising business costs,” Ms Wawn said.