Describing the private sector as the "engine of the Australian economy", Mr Frydenberg said the temporary tax incentive announced in Tuesday's budget would "expand the productive capacity of the nation and create tens of thousands of jobs".

It builds on the expansion of the Instant Asset Write Off announced earlier this year.

The budget plan will benefit about 3.5 million small, medium and larger businesses with a turnover of up to $5 billion until June 2022, and is aimed at providing an incentive to bring forward investments.

The government said the measure would deliver $26.7 billion in tax relief over four years for businesses that employ about 11.5 million workers.

"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," Mr Frydenberg told parliament.

"This will boost the order books of the nation.

"Small businesses will buy, sell, deliver, install, and service these purchases."

The measure is one of a number offering billions in tax breaks to boost businesses and help them recovery from the COVID-19-led recession.

The treasurer also unveiled a temporary measure allowing businesses to claim back tax paid in previous years to offset losses incurred because of the coronavirus pandemic.

The temporary loss 'carry back' will allow companies with turnover of up to $5 billion to offset losses incurred to 2022 against profits made in or after the 2018/19 financial year.

"Companies that have been doing it tough throughout this crisis will be able to use their losses earlier," Mr Frydenberg said.

"The combination of the immediate expensing (asset write off) and loss carry-back measures will create an additional 50,000 jobs across the country."

The government says the offset proposal will provide $4.9 billion in tax relief over four years.

The government had already unveiled a dozen changes to fringe benefits tax in the lead up to the budget for small and medium sized businesses.

The small business entity turnover threshold will be lifted from $10 million to $50 million for a number of tax concessions.

They will no longer have to pay the 47 per cent FBT on work phones, laptops and free car parking in non-commercial premises provided to small business staff.

The government will also axe the FBT on retraining provided by employers to redundant, or soon to be redundant, workers.

The changes will complement other measures already in place, including lowering the company tax rate and providing a 50 per cent accelerated depreciation allowance.

Australian Associated Press