Fast-tracked company tax cuts for small and medium-sized businesses have passed the lower house, bringing the plan closer to reality.
Draft laws enacting the Morrison government’s proposed tax relief measures are set for the Senate after clearing the House of Representatives on Tuesday.
Companies with turnover under $50 million will receive a tax rate of 25 per cent five years earlier than initially planned under the proposal.
“We believe in the more than three million small and medium businesses in Australia, employing seven million workers,” Treasurer Josh Frydenberg said as he introduced the draft law.
“Reducing their taxes will allow them to invest, grow and hire more Australians.”
Such businesses will have their tax rate dropped to 26 per cent rate in 2020/21, then to 25 per cent the following year.
The legislation sailed through the lower house with Labor’s support, while independent MP Andrew Wilkie and Greens MP Adam Bandt attempted to delay the inevitable on Tuesday evening.
Labor treasury spokesman Chris Bowen said the opposition were happy to facilitate the change in tax policy.
“They (businesses) deserve the certainty to know these tax cuts are locked in,” he said.
However, Bowen says the Morrison government had only shifted to tax cuts for small and medium businesses after its plan for relief for large companies suffered defeat in the Senate in August.
Greens MP Adam Bandt says the looming federal election has resulted in the tax cuts being rushed through parliament to avoid scrutiny.
Bandt said other matters, such as the mental health of refugee children on Nauru, were more important than clearing the parliamentary schedule for business tax cuts.
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell welcomes Coalition and Opposition support for fast tracked tax cuts for small and medium enterprises (SMEs), saying it will mean more jobs and a boost in investment.
“This was shown in the AlphaBeta-Xero research that examined the impacts of the 2015 tax cuts for SMEs with a turnover of less than $2 million,” Carnell said today.
“When I talk to SMEs owners about the possibility of tax cuts, they have said they will put the money back into their business; equipment, more staff and expansion.
“Fast tracking legislated tax cuts for SMEs will be significant for job creation and economic growth, particularly in rural and regional areas where the sustainability of so many communities is underpinned by small businesses.”
Carnell said that SMEs are the biggest employer in Australia and “we are increasingly relying on the sector to keep people in jobs and drive growth”.