The Coalition has outlined its vision to grow the number of small businesses in Australia by 350,000 in four years if elected, offering to give start-ups a leg-up with new tax offsets.
As part of the plan, new incorporated businesses would only have to pay tax on a portion of their income in their first three years of operating, in an effort to let them re-invest more in their business.
The Coalition said it wanted to see Australians have the confidence to take a risk and start a new business – adding to the 2.5 million small businesses already operating across the country.
Under the proposed “entrepreneurship accelerator” scheme, businesses would only have to pay tax on 25 per cent of the first $100,000 of income in the first year.
They would also only be taxed on half of the second $100,000 earned.
Peter Dutton has unveiled new three-year tax offsets to help small start-ups re-invest. (ABC News: Jessica Hinchliffe)
The offset would taper off in the second and third years.
In year two, they would pay tax on 40 per cent of the first $100,000 of income, and 60 per cent of the second $100,000.
The following year, the businesses would pay tax on half of the first $100,000 of income, and 70 per cent of the second $100,000.
Dutton says plan will ‘restore confidence’
To be eligible, a company must meet the small business definition, so have less than 20 employees and an aggregated turnover of less than $10 million.
They also must be incorporated in Australia.
The criteria also states a business cannot have more than 20 shareholders, plus one of those shareholders must own more than 10 per cent of the company.
Opposition Leader Peter Dutton said the plan would “restore confidence, save time and cut costs”.
Peter Dutton says the plan will ‘restore confidence, save time and cut costs’. (ABC News: Brendan Esposito)
“Today, I say to small business owners and employees, help is on its way,” he said in a statement.
“Our policies offer immediate relief, as well as measures to support small and family business to grow and create jobs in the future.“
Investment holding and property development companies would be excluded.
Write-offs for tech upgrades
The new policy comes as the party has sidelined its promise to give small and medium sized businesses $20,000 in tax-free staff meals.
The ABC has revealed the policy has only been mentioned once by the opposition in its first three weeks of campaigning, with party insiders admitting it veered from the focus being on cost of living.
As part of the promise, the Liberal Party will also offer small businesses a tax write-off on technology upgrades to encourage businesses to be more digitally savvy.
Businesses would be able to claim a tax deduction of $2,000 for upgrades worth $4,000 or more.
The upgrades could include to e-commerce, software, hardware, cyber security and digital marketing efforts.
The Coalition said the offer would be available to all small businesses, not just new ones.
The Liberal party says the two policies would cost $330 million over four years.
Murray Watt says employees should be compensated for working weekends. (ABC News: Matt Roberts)
Labor to legislate to protect penalty rates
Meanwhile Labor has unveiled plans to legislate to protect against a reduction in penalty rates for workers employed under an award.
The plan lands as retail, clerical and banking groups push to make changes to the use of rates.
In a submission to a Fair Work Commission review, the Australian Retailers Association has proposed allowing some staff to opt out of penalty rates, overtime, some allowances and rostering arrangements in favour of a 25 per cent pay rise.
Labor has already intervened in that matter to argue the proposal would leave workers thousands of dollars worse off.
Employment and Workplace Relations Minister Murray Watt said employees should be compensated for working weekends.
“We will introduce legislation to ensure workers don’t have their pay cut and their penalty rates are protected into the future,”
he said.
About 3 million Australians are employed under awards which set out the minimum wages and conditions for workers.
