Farming leader calls for instant asset write-off to be extended in perpetuity

The nation’s peak farming body is calling for the instant asset write-off to be raised to $150,000, after an extension for this year was passed in Canberra on Wednesday.

Australia’s peak farming body is calling for the instant asset write-off scheme to be increased to $150,000.

The $20,000 instant asset write-off for small business entities was extended to cover the current financial year until June 30 in parliament on Wednesday - but any indication of a subsequent extension was missing from Tuesday night’s federal budget.

National Farmers Federation president David Jochinke said this election the NFF would be calling for all parties to extend the write-off and raise the asset threshold to $150,000.

“This measure is an exceptional incentive for farmers to invest in the equipment they need to improve productivity and make their workspaces safer and less labour-intensive,” he said.

“We will keep pushing parties to recognise these benefits and reinstate the measure.”

The write-off allows eligible businesses can claim an immediate deduction for the business portion of the cost on an asset in the year the asset is first used or installed ready for use.

Grain Producers Australia southern region director Andrew Weidemann said the write-off was not only important for farmers in terms of building hay sheds and grain storage to help buffer weather patterns, but also for small businesses.

“The government is talking about wanting to build all these houses, but it’s taking the rug out of the building industry in one fell swoop,” he said.

“It’s just taking the confidence out of the building and small business sectors.”

GPA southern region director Andrew Weidemann. Picture: Supplied

The instant asset write-off level will fall back to the default level of $1,000, which is currently fixed in legislation, if no other extension is granted.

Agriculture and Small Business Minister Julie Collins was asked in parliament on Wednesday to confirm if the write-off would fall to $1000 in the next financial year, but did not directly answer the question, instead referring to the $290m announced for small businesses in last year’s budget.

The Coalition has said it will increase the write-off to $30,000 and enshrine it in legislation should they win the election, while other MPs and senators have called for it to be increased even further.

Independent MP Zali Stegall called for a permanent increase to $50,000 earlier this year, while ACT Senator David Pocock said the next parliament “will need to do the work of making it permanent, providing certainty and raising it to at least $30,000.”

“$20,000 was where we were in 2013-14 when we started discussions (on the write-off), but $30,000 is probably more realistic in the current economy,” Mr Weidemann said.

“Most people can buy a small silo for $15,000-$30,000 so that would cover that. The cost of living and doing business has increased exponentially in the past decade.

“It should be legislated in perpetuity.”