2026
The Tax Institute welcomes move to make instant asset write-off permanent
SYDNEY, 11 May 2026: The Tax Institute welcomes the Treasurer’s announcement ahead of the Federal Budget 2026-27 that the instant asset write-off (IAWO) will be made a permanent feature of the tax system, describing it as a practical and long-overdue step to support business investment and productivity.
The Tax Institute has long-advocated for the IAWO to be a permanent measure. The Tax Institute’s Head of Tax & Legal, Julie Abdalla, says, “for many years, small and medium-sized businesses, and their advisers, have endured uncertainty about whether the measure will be extended for another year. Often enabling legislation has been enacted too late in the year to do anything more than confirm anticipated tax treatment of decisions already made by taxpayers rather than encourage investment.”
“We are pleased that the Government has committed to moving away from ad-hoc extensions of the IAWO. Doing so will provide certainty to small and medium-sized businesses by removing the ongoing cycle of temporary extensions that has created uncertainty and compliance complexity in recent years.”
Making the measure permanent is an important first step, with further refinements needed over time.
“Increasing the threshold and expanding eligibility over time should remain a priority to ensure this measure keeps pace with business needs and broader economic conditions”, Abdalla says.
The Tax Institute has tirelessly advocated for the need to make the IAWO permanent across a range of its policy and advocacy work, including:
- Pre-Budget 2026-27 media release, urging Government to take action on tax reform and deliver measures that support productivity and growth.
- November 2025 Submission to the Senate Standing Committees on Economics as part of its inquiry into the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025, with recommendations on the IAWO cited in the Committee’s Report.
- October 2025 Self-initiated submission to the Board of taxation: Tax simplification - Cutting through the red tape, which advocated for simplifying the tax system and easing compliance burdens for businesses
- July 2025 Submission to the Productivity Commission inquiry into creating a more dynamic and resilient economy, outlining the crucial role tax system plays in shaping Australian business landscape and key changes that can be made to foster investment and productivity growth;
- Incoming Government Brief: June 2025, which emphasised the importance of stable, predictable tax settings and reducing reliance on temporary measures that create uncertainty for business environment;
- The Case for Change, 2021 tax reform discussion paper which noted that the IAWO has been implemented as temporary stimulus measures, highlighted the complexity caused by repeated changes, and recommended moving toward making the measure a permanent feature to provide certainty and reduce compliance costs.
Ms Abdalla said that making the measure permanent will go some way to reduce compliance costs, support cash flow planning, and encourage businesses to invest in assets that improve efficiency and competitiveness.
“Certainty in the tax system is crucial for business confidence and economic growth. A permanent IAWO will enable businesses to make investment decisions with greater clarity and reduce unnecessary administrative burden.”
The Tax Institute looks forward to continuing to work with the Government to progress broader tax reform that supports a more productive, resilient, and competitive economy.
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- 2026
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