Small businesses to gain more tax breaks

It’s not so much the scale of the support but the “attitude” being brought to backing small and medium-sized businesses in the federal budget that counts.

That is the view of Assistant Treasurer Michael Sukkar, who has been helping pull together next Tuesday’s budget.

The government has unveiled a dozen changes to fringe benefits tax and the way businesses deal with the tax office.

It has also been speculated the budget will include a measure enabling businesses to claim back tax paid before the coronavirus hit to offset losses incurred in the first recession in 30 years.

Mr Sukkar refused to confirm changes to the “loss carry-back rules” but hinted it was important for businesses to have the liquidity and capital needed to invest and grow.

However, he said businesses of all sizes would appreciate the government’s approach to helping them through the crisis, even if it amounted to only a few thousand dollars for some.

“This is a very strong indication of the attitude the prime minister and the treasurer and government have brought to this year’s budget, which is making it easier for small and medium-sized businesses,” he told Sky News on Friday.

“Every single business, regardless of the value, will be welcoming not having to pay fringe benefits tax.

“These are important measures, but they most importantly give Australians a sense of just how serious we are about encouraging Australian businesses to employ and invest in their workforce.”

Treasurer Josh Frydenberg has pitched the budget as a two-step process, with a boost in spending now to fuel growth and get people back into work, followed by a shift back to fiscal restraint once the jobless rate is under control.

The budget deficit is expected to be around $200 billion with debt heading towards $1 trillion.

Thousands of small businesses will get access to tax breaks and red tape cuts under a $112 million plan.

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

Among the concessions will be not applying the 47 per cent fringe benefits tax (FBT) on work phones, laptops and small businesses that provide free car parking to their staff in non-commercial premises.

The government will also remove 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, increasing the instant asset write-off and providing a 50 per cent accelerated depreciation allowance.

Work is also under way on reducing red tape across government.

“Good regulation is critical to ensuring Australia has a well-functioning economy, society, environment, and democracy,” said Ben Morton, the minister tasked with deregulation.

“Bad regulation is a ‘job-killer’ with no redeeming features.”

Meanwhile, an extra $50 million in rebates will be made available to drought-affected farmers this financial year to put in new bores, dams and pipes.

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