SMEs planning to take advantage of the $20,000 instant asset write-off threshold only have until June 30[1] to purchase and install equipment after the policy was abandoned in this week’s 2025 Budget.

Unless a fresh commitment is made to extend write-off rules over the next three months, Australian businesses now face the prospect of the threshold dropping back to just $1,000 from next financial year.

ScotPac CEO, Jon Sutton said the uncertainty created by the Budget decision would deliver a capital expenditure headache for thousands of SMEs who were planning to invest in productivity boosting assets.

“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,” Mr Sutton said.

“New data from ScotPac’s SME Growth Index Report found that 59 per cent of Australia’s SMEs are planning to invest in their businesses in the six months to August 2025.

“However, the instant asset write-off change in the Budget will throw those plans into jeopardy, particularly when SMEs are already feeling the cash flow pinch of higher wages, superannuation and other compliance costs.”

Previous research from ScotPac following the reduction in the instant asset write-off cap to $20,000 from July 2023 found the expenditure plans of 61% of SMEs were immediately impacted. A further 20% said they would delay investment by 6-12 months.

Mr Sutton urged SME owners and operators to sit down with their key advisors and reassess their capital expenditure plans and priorities in the wake of this week’s Budget.

“SMEs planning major asset purchases should carefully consider all available funding solutions so they don’t miss a critical investment opportunity,” Mr Sutton said.

“ScotPac has been supporting Australian businesses and their brokers to plan and fund essential asset purchases for more than 35 years.

“We take pride in delivering the certainty and confidence business owners need when it comes to making capital investment decisions.

 

 

For more information contact:

Todd Hayward, Mob: 0412 205 151

 

[1] In its 2024–25 Federal Budget, the Government announced that it would extend the $20,000 instant asset write-off threshold for one year until 30 June 2025. For reference, it is yet to be legislated for this financial year.