This bill is currently before Parliament.
Budget, tax & economy
Companies turning over less than $1 billion could use losses from 1 July 2026 to reclaim tax paid in either of the previous two years.
The government said letting companies reclaim earlier tax would improve cash flow during temporary downturns and encourage investment. It expected the measure to benefit up to 85,000 companies each year, mostly small businesses. It said the permanent asset deduction could help up to 4.1 million businesses and cut paperwork costs by around $32 million a year. The PNG Chiefs Limited exemption was intended to support Papua New Guinea's own tax break and help its new rugby league team attract talent.
Before this bill, Australia had used temporary loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. rules in 2020–21, 2021–22 and 2022–23, while the small-business $20,000 instant asset write-offAn immediate tax deduction for an eligible business asset. was not permanent and PNG Chiefs employees remained exposed to Australian income tax. The 2026–27 Budget proposed a two-year refundable loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. for companies under $1 billion turnoverThe total revenue a business earns before expenses., a permanent $20,000 write-off and a retrospective PNG Chiefs employment-income exemption, which the government introduced in Parliament on 25 June 2026.
The evidence pack does not contain an opposition or crossbench debate speech, so no criticism of the bill can be established from the supplied material.
Hon Dr Jim Chalmers MP introduced this bill. Supportive speeches so far have come from Labor.
Did it become law?
Not yet
Final passage
No final vote yet
The bill has not yet completed passage through Parliament.
Days since introduction
43 days
Updated 07 Aug 2026.
Meaning
Companies turning over less than $1 billion could use losses from 1 July 2026 to reclaim tax paid in either of the previous two years.
Companies using this option could receive a cash refund. It cannot exceed their earlier tax or unused tax credits recorded for shareholders.
Small businesses could immediately deduct each eligible asset costing under $20,000. The permanent limit rises from $1,000 and applies from 1 July 2026.
Small businesses buying assets worth $20,000 or more could deduct 15 per cent initially, then 30 per cent each later year.
Small businesses that leave the simpler asset-deduction system could rejoin without waiting five years until 30 June 2027.
PNG Chiefs Limited players and staff would pay no Australian income tax on work income from 1 July 2025 to 30 June 2035.
A corporate tax entity can choose to “carry back” a tax loss it had for an income year against the income tax liability it had for either or both of the previous 2 income years. The entity gets a refundable tax offset as a proxy for the tax the entity would save if it deducted the loss in the income year(s) to which the loss is “carried back”. The refundable tax offset: (a) is capped at the entity’s franking account balance; and (b) is only available if the entity is not a significant global entity for the loss year.Treasury Laws Amendment (Tax Reform No. 2) introduced text
160‑10 Amount of loss carry back tax offset (1) The amount of the entity’s *loss carry back tax offset for the *current year is the lesser of the following amounts: (a) the sum of the *loss carry back tax offset component for each *eligible carry back year; (b) the entity’s *franking account balance at the end of the current year.Treasury Laws Amendment (Tax Reform No. 2) introduced text
Income Tax Assessment Act 1997 1 Section 328‑170 Omit “$1,000”, substitute “$20,000”. 2 Section 328‑180 (heading) Omit “$1,000”, substitute “$20,000”. 3 Paragraph 328‑180(1)(b) Omit “$1,000”, substitute “$20,000”. 4 Paragraph 328‑180(2)(a) Omit “$1,000”, substitute “$20,000”. 5 Paragraph 328‑180(3)(a) Omit “$1,000”, substitute “$20,000”.Treasury Laws Amendment (Tax Reform No. 2) introduced text
Up to 4.1 million businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2026. The $20,000 threshold will continue to apply on a per-asset basis so small businesses can instantly write-off multiple assets. Assets costing $20,000 or more can be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.Minister's second reading speech
Income Tax (Transitional Provisions) Act 1997 16 Section 328‑180 (heading) Omit “2026”, substitute “2027”. 17 Subsection 328‑180(1) (paragraph (b) of the definition of increased access year) Omit “2026”, substitute “2027”.Treasury Laws Amendment (Tax Reform No. 2) introduced text
2 At the end of Division 51 51‑130 PNG Chiefs Limited employment (1) An amount of your *ordinary income or *statutory income is exempt from income tax if the amount is included in your ordinary income or statutory income for the 2025‑26 income year or any of the next 9 income years and: (a) if the amount is ordinary income—the amount is derived from PNG Chiefs Limited in respect of your employment, or former employment, with PNG Chiefs Limited; or (b) if the amount is statutory income—the amount is from PNG Chiefs Limited in respect of your employment, or former employment, with PNG ChiefsTreasury Laws Amendment (Tax Reform No. 2) introduced text
Context
Before this bill, Australia had used temporary loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. rules in 2020–21, 2021–22 and 2022–23, while the small-business $20,000 instant asset write-offAn immediate tax deduction for an eligible business asset. was not permanent and PNG Chiefs employees remained exposed to Australian income tax. The 2026–27 Budget proposed a two-year refundable loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. for companies under $1 billion turnoverThe total revenue a business earns before expenses., a permanent $20,000 write-off and a retrospective PNG Chiefs employment-income exemption, which the government introduced in Parliament on 25 June 2026.
Australia uses temporary loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. rules
Temporary loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. rules applied for these three income years, but the measure was not a continuing tax setting.
Treasury Laws Amendment (Tax Reform No. 2) explanatory memorandum ↗Proposed PNG Chiefs tax exemption is backdated
The bill would exempt employees and former employees of PNG Chiefs Limited from Australian income tax on employment-related income, including salaries, match fees and bonuses, for this period.
Treasury Laws Amendment (Tax Reform No. 2) explanatory memorandum ↗Budget proposes tax relief for businesses
The 2026–27 Budget announced reforms to help businesses manage losses and permanently increase the small-business instant asset write-offAn immediate tax deduction for an eligible business asset. to $20,000 from 1 July 2026.
Australian Taxation Office ↗Treasurer introduces the bill
Hon Dr Jim Chalmers MP introduced the government bill in the House of Representatives and moved its second reading to begin parliamentary consideration.
Hansard ↗Proposed loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. and asset write-off begin
For relevant tax years, eligible companies would be able to carry back revenue losses by up to two years for a refundable offset, while eligible small businesses would receive the permanent $20,000 immediate deduction.
Treasury Laws Amendment (Tax Reform No. 2) explanatory memorandum ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Referred to Committee (25/06/2026): Senate Economics Legislation Committee; Report due 13/08/2026
Report due 13 Aug 2026
APH bill page notesKey criticism
The evidence pack does not contain an opposition or crossbench debate speech, so no criticism of the bill can be established from the supplied material.
The available government speech described the measures as supporting business investment, cash flow and resilience. It also said the PNG Chiefs Limited exemption would help Papua New Guinea's tax arrangements work as intended.
Further sources
Votes
No recorded votes have been found yet for this bill.
Parliamentary debate
Start here — lead voices
Jim Chalmers supports the bill, saying it will back Australian businesses by making loss carry-backUsing a current company loss to reclaim tax paid in an earlier profitable year. and the $20,000 instant asset write-offAn immediate tax deduction for an eligible business asset. permanent, reducing compliance costs and encouraging investment.
Read in Hansard ↗All speeches by bloc
1 speaker · 1 support
“It's what our plan to create a more productive economy, to cut $10 billion of red tape, to grow GDP by $13 billion by working with the states and to encourage innovation and risk-taking is all about as well. We are proud of this bill, and we are proud of our ambitious tax reform package, and that's why we commend this bill to the House.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate Economics Legislation Committee
Report due 13 Aug 2026
Referred to Committee (25 June 2026): Senate Economics Legislation Committee; Report due 13 Aug 2026
APH bill page notes