Federal Budget: Small and medium-sized Australian businesses to get tax cut

MORE than one million small and medium-sized businesses will get an unexpected tax cut in today’s Federal Budget as the government looks to small business to kickstart the Australian economy

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MORE than one million small and medium-sized businesses will get an unexpected tax cut in today’s Federal Budget as the government looks to small business to kickstart the Australian economy.

The company tax rate for around 900,000 small businesses with turnover of less than $2 million a year will drop from 28.5 per cent to 27.5 per cent.

And a further 90,000 medium-sized businesses, now paying 30 per cent company tax, will get the same tax treatment as small business, meaning they too will be taxed at 27.5 per cent.

Big business will miss out on the tax cut as the government seeks to inoculate itself from claims by Labor that the Budget, handed down just 60 days before the July 2 double-dissolution election, was looking after the big end of town.

Treasurer Scott Morrison and Prime Minister Malcolm Turnbull with the Budget papers. Picture: AAP

Treasurer Scott Morrison, who visited a Canberra firm with a turnover of $6 million yesterday, described medium and small business as “the hope of the side for Australia’’.

“They are the companies that are ensuring that our economy continues to transition, continues to transform, continues to drive jobs and to drive growth,’’ he said.

The change to taxation rates will be a boon for family-owned and small businesses, of which there are around 250,000 in Victoria.

The Budget has been brought forward by a week to clear the way for Prime Minister Malcolm Turnbull to visit the Governor-General in the next six days and send Australia to the polls.

The move will put Australia into an almost unprecedented eight-week election campaign, with both Mr Turnbull and Opposition Leader Bill Shorten contesting their first election as leaders.

Labor has sharpened its attack on the government, with Mr Shorten accusing Mr Turnbull and the Coalition of abandoning low-income people and favouring the top end of town.

As the election countdown continued, the government introduced interim supply Bills, which contain funding for about five months to ensure the public service can continue to operate.

The three Bills will need to pass both houses of parliament before the election is called, and with the Senate rising tomorrow due to Senate estimates, the Government has only 48 hours to pass the Bills, although Labor has historically supported the passage of supply Bills.

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Originally published as Federal Budget: Small and medium-sized Australian businesses to get tax cut