Greens propose a 5pc tax cut for small business but nil for big business

THE Greens say they will push for a 5 per cent tax break for small businesses at tax forum - but nil for big business.

Bob Brown

THE Australian Greens are proposing a major change to Labor's planned minerals resource rent tax, calling for a five per cent tax cut for small business and nothing for big companies.

The party's call coincided with the release of updated draft legislation for the tax today.

Under the government's plan, revenue from the 30 per cent mining tax will fund a reduction in company tax - from 30 per cent to 29 per cent - as well as an increase in compulsory superannuation contributions and infrastructure spending.

Labor will need the support of the Greens to win parliamentary approval for its plan, which the coalition opposes.

The Greens have been pushing for a return to the 40 per cent super-profits tax initially proposed by former prime minister Kevin Rudd.

Now they want a better deal for small business and less for big companies, especially miners and banks.

''This will also keep billions of dollars in Australia which might otherwise go as profits offshore,'' Greens leader Bob Brown said today of his party's new plan.

''We think small business, not the big banks and the big mining corporations, should be getting the break.''

Senator Brown said about half the workforce was employed by small business compared to two per cent in the mining industry.

Keeping the corporate tax rate at 30 per cent for big companies would result in about $2 billion being made available for small business.

The Greens intend pushing their proposal at the government's tax forum in October.

Treasurer Wayne Swan says a second draft exposure of the legislation takes into account comments received during the initial consultation process.

''While the policy remains the same, the second draft contains changes that strengthen the integrity of the tax,'' he said in a statement.

Mr Swan said the revenue from the mining tax would support all businesses, including those not in the fast lane of the mining boom.

Substantial tax relief would be provided for the nation's 2.7 million small businesses.

The government would continue the consultation process until October 5, Mr Swan said.

The minerals resource rent tax, if approved by parliament, will operate from July 1, 2012.