Proof it works: Instant Asset Write-Offs drive investment
3 March 2026
The Australian Food and Grocery Council (AFGC) says the food and grocery manufacturing sector’s recent investment performance demonstrates how effective targeted tax incentives can be in driving business investment, as the Government considers corporate tax reform options ahead of the May Budget.
Recent reports indicate the Government is exploring a permanent and expanded Instant Asset Write-Off (IAWO). The AFGC has consistently called for a significant expansion of the IAWO, including in its Pre-Budget Submission and Productivity Playbook, to boost productivity and competitiveness in the sector.
From 2020-21 to 2022-23, food and grocery manufacturers accelerated capital investment under enhanced asset write-off settings, including the Temporary Full Expensing (TFE) measure, which expanded the scope of the IAWO and allowed businesses to immediately deduct the full cost of eligible capital assets. Recent AFGC analysis shows this period coincided with a 38.7% increase in gross fixed capital formation, rising from $3.1 billion in 2019-20 to $4.3 billion in 2022-23.
Source: AFGC State of the Industry data
AFGC CEO Colm Maguire said the data shows that when tax incentives are predictable and commercially meaningful, businesses act.
“Across 2020-21 to 2022-23, food and grocery manufacturers brought forward significant investment,” Mr Maguire said.
“That investment strengthened production capacity, improved efficiency, and supported regional jobs.”
“This is not theoretical; the data shows that enhanced asset write-off measures drive real economic activity.”
“This sector has demonstrated it is ready to invest and grow. With the right settings, we can accelerate towards our 2030 target.”
Food and grocery manufacturing is one of Australia’s largest and most regionally-dispersed manufacturing sectors, underpinning essential supply chains, and supporting hundreds of thousands of jobs.
“The AFGC is excited to champion growth, advocate for settings that unlock investment, and secure a brighter future for Australian food and grocery manufacturing.”
Media Contact:
Ingrid Cruz
media@afgc.org.au
