An instant asset write-off for new business investment and an immediate tax deduction for losses are key measures in the federal budget.
The asset write-off is an expansion of the scheme announced earlier this year during the COVID-19 emergency.
Treasurer Josh Frydenberg said small businesses with turnover of up to $5 billion would have access to the write offs until June 2022.
It will mean businesses can claim an immediate tax deduction for investments, rather than over time through depreciation.
Mr Frydenberg said it would unlock investment.
“It will dramatically expand the productive capacity of the nation and create tens of thousands of jobs,” he said.
“A trucking company will be able to upgrade its fleet, a farmer will be able to purchase a new harvester and a food manufacturing business will be able to expand its production line.”
There was also a big change to how businesses could claim back tax deductions for losses.
Ordinarily the losses would be deducted against future profits over an extended period.
But now, businesses will be able to deduct the losses against prior profits.
“Normally, businesses would have to return to profit before they can use these losses,” Mr Frydenberg said.
“But these are not normal times.
“In order to keep their workers, these businesses need our help now.
“They cannot wait years for the tax system to catch up.
“So tonight I am announcing companies that have been doing it tough throughout this crisis will be able to use their losses earlier.
“Losses incurred to June 2022 can be offset against prior profits made in or after the 2018‑19 financial year.”
CPA Australia endorsed the instant asset write off extension, although the association noted many smaller businesses may not be in a position to take advantage of the measure.
"We also support the introduction of a tax loss carry back, which will provide much-needed cash to previously profitable businesses that are now making losses due to COVID-19," the association said.
Accelerated depreciation has been used in other countries to encourage investment, including in a 2017 tax reform package in the United States.
