Parliament passed the small business tax bill on 19 August — is the $20,000 write-off permanent now?

You have been putting off the ute, the second oven, the new set of tools. Every time you asked, the answer came with a caveat attached: the $20,000 instant asset write-off was announced in the May Budget for the year starting 1 July 2026, but announced is not legislated, and nobody sensible builds a purchase around a bill. As of yesterday that caveat has almost entirely gone.

What happened on 19 August

The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 was introduced on 25 June 2026 and then sat still for most of the winter. The House of Representatives agreed to it at third reading on 18 August 2026, the Senate did the same on 19 August, and Parliament's own record for the bill now shows a status of Passed Both Houses, with 19 August 2026 against the line 'finally passed both Houses'.

Three measures travelled inside it. It permanently extends the $20,000 instant asset write-off from 1 July 2026. It lets a corporate tax entity that is not a significant global entity carry a tax loss back against tax paid in either or both of the two preceding income years and take a refundable offset instead of a deferred deduction. And it adds an income tax exemption for income earned from employment with PNG Chiefs Limited — narrow enough to skip unless it happens to be you.

The step that has not happened yet

Update, 27 August 2026: that step has now happened. The bill received Royal Assent on 26 August 2026 and is Act No. 71 of 2026. When this was written the position was that it had passed both Houses but was not yet on the statute book; it is now law, and the distinction described below is no longer live for this measure.

It also changes nothing about the return most small businesses are lodging at the moment. The $20,000 threshold for the 2025–26 year — 1 July 2025 to 30 June 2026 — was already law, locked in separately by the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025. This week's news is about the year you are trading in, not the year you are reporting on.

What 'permanent' does and does not mean

Permanent here has a specific and fairly unexciting meaning: the threshold stops being re-legislated one year at a time. For several years running the limit has been set by a short extension that lapsed each 30 June, which is why the answer to 'what is the limit next financial year' kept depending on whether a bill had passed. From 1 July 2026 the $20,000 sits in the income tax law as the ongoing position, and the annual cliff-edge goes away.

It does not mean the number grows. $20,000 is a fixed figure, not indexed to inflation or anything else, so a $23,000 machine is no closer to a one-off deduction than it was in June. It does not widen who qualifies either — the eligibility line is exactly where it was.

The three tests the bill did not touch

The write-off still requires aggregated turnover under $10 million and the use of the simplified depreciation rules. It is still tested per asset rather than per year, so several items each under $20,000 each qualify on their own. And it is still the business-use portion of the cost, measured GST-exclusive if you are registered for GST, claimed in the year the asset is installed ready for use rather than the year you paid for it.

An asset costing $20,000 or more is not lost — it goes into the small business pool and is deducted at 15% in the first year and 30% each year after. The deduction is the same size in the end; only the timing differs. We set all of this out in more detail in the earlier piece on the write-off, and none of it moved on 19 August.

The other half of the bill

Loss carry back applies to income years commencing on or after 1 July 2026, which means the first losses it can reach are the ones being made right now. In his second reading speech the Treasurer put the expected reach at up to 85,000 companies a year, mostly small businesses, concentrated in construction, manufacturing, professional services, finance and insurance, and wholesale trade.

Whether it is worth anything to a particular company is decided by three things that can be checked today rather than next June: whether company tax was actually paid in one of the two preceding years, what is left in the franking account after any dividends, and whether the returns are all lodged. We wrote that one out in full last week, and the mechanics described there are the ones that just passed.

What to expect over the next few weeks

Published guidance lags legislation, and that is normal rather than a warning sign. As at 27 August 2026, the day after assent, the ATO's instant asset write-off page was still last updated on 27 May 2026 and still describes the 2025–26 position, with $20,000 framed as the limit for that year. It will catch up. Until it does, a page that has not been rewritten yet is not evidence that something went wrong in Parliament.

The other thing to expect is the word permanent being quoted loosely. It is a statement about how long the $20,000 lasts, not about how large it is or who can use it.

This is general information current as at 20 August 2026, not advice about your business. If you deferred a purchase in July because the position was not settled, the practical question now is not whether the rule exists but whether the asset will be installed ready for use inside this income year, and whether its cost sits under $20,000 on the correct GST basis. If your company is instead heading for a loss, the useful work is on the franking account and the lodgment history, well before the return is prepared. Both of those are the kind of thing our companies, trusts and bookkeeping service is built to keep in order.