Opposition leader pledges huge boost to instant asset write-off for small businesses

Opposition Leader Angus Taylor has one-upped the treasurer on a popular small business measure that would allow tradies to immediately write off a new ute on tax.

Despite concerns housing-related tax reforms would hurt an already struggling construction industry, Treasurer Jim Chalmers' decision to make the $20,000 instant asset write-off permanent for businesses with a turnover of less than $10 million was widely welcomed by the business community on Tuesday night.

After several one-year extensions, the shift was praised for giving businesses and their accountants certainty the limit wouldn't suddenly return to the old $1000 limit.

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Last night, amid a budget reply promising an immigration crackdown and tax reform for lower earners, Taylor went further with an implicit pitch to tradespeople, more than doubling the limit to $50,000, bringing some utes into the picture as potential write-offs.

"Investment lifts the economy's speed limit. It drives up jobs, real wages and real income, and it strengthens the budget to pay for the safety net and to pay down debt," Taylor said.

"Investment is a vote of confidence in our country with compounding benefits.

"For example, when a builder invests in a ute, he can do more jobs, take on a new apprentice, grow his business and service more of his community, to lift confidence in our country and encourage business investment."

Business NSW came out quickly in support of the significant boost to the limit, which it argues better matches the real cost of doing business.

"Our members have been telling us for years that the instant asset write-off needs to reflect today's costs, not yesterday's," he said. 

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"A permanent $50,000 threshold would give business owners greater confidence to invest, plan ahead and improve productivity."

Most of drive.com.au's top 10 best utes come in well above the limit but the Ford Ranger, Kia Tasman and KGM Musso all start below $50,000. The base-model Mazda BT-50, Toyota Hilux and Isuzu D-MAX would also qualify based on current pricing.

Simply making the $20,000 limit permanent had already won Chalmers plaudits from many business advocates and some analysts for giving businesses greater certainty.

"For many years, small and medium-sized businesses, and their tax advisers, have endured uncertainty about whether the Instant Asset Write-Off will be extended for another year," the Tax Institute head of tax and legal Julie Abdalla said.

"Often, extensions have been announced too late for planning business investment, which meant small businesses simply had to roll the dice. 

"This added certainty will be well-received."

But there's unlikely to be much pushback from those same groups or the business people they represent to an even more generous deduction.

Accountants say assets costing more than the limit can still be placed into the small business simplified depreciation pool and depreciated under the existing rules.

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