Tasmanian small businesses may pay less tax sooner – but only if Labor supports the government’s tax legislation.
Prime Minister Scott Morrison has announced legislation will be introduced in the next session of parliament to fast-track business tax relief for more than three million businesses.
“This will mean more investment, more jobs and higher wages,” Mr Morrison said.
However, Labor’s Treasury spokesman Chris Bowen said Labor would consider the legislation and how it should be funded.
“The Government is not paying for this, they have nothing, they have absolutely no way of paying for this.
“We have rightfully expressed concerns that they may make further cuts to schools and hospitals. When we respond to this policy announcement will do so with the health of the Budget in mind, bearing in mind of course the importance of certainty for the small business sector.”
Tasmanian Small Business Council chief executive Robert Mallett described the tax cut announcement as “excellent.”
“It will not be a cost to the budget but an investment in Tasmania’s future and could see small businesses employ more people,” Mr Mallett said.
“The amounts are small and staggered but gradually we are working toward a tax rate which makes it more attractive for businesses to not only stay in business but seek opportunities to grow.’”
However, Mr Mallett said only 30 per cent of small businesses would benefit from reducing the tax rate because it only applied to small businesses which were companies and not to sole traders, partnerships and trusts who paid tax based on personal income.
Tasmanian Liberal Senator Eric Abetz said more than 37,500 Tasmanian businesses would benefit from the move five years earlier than planned.
“With more than 100,000 Tasmanians working in small business, this important reform will help to turbo-charge the small business sector in our state,” he said.
Senator Richard Colbeck said a small business, such as an independent supermarket or a hotel, that made $500,000 profit, would have an additional $7,500 in 2020-21 and $12,500 in 2021-22 to invest back into the business or staff, or help to manage cash flow.