News National Pay day for small businesses

Pay day for small businesses

Xenophon tax cut AAP
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After its first year of unpopular cuts, the Abbott government has confirmed that its second budget will bring relief to an important segment of the economy — small business owners — although it is being secretive about the details.

Treasurer Joe Hockey confirmed on Wednesday morning that small businesses would pay less tax, but refused to announce the exact cut.

“You’ll have to wait and see,” Mr Hockey told radio station 3AW.

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Prime Minister Tony Abbott has already indicated that the cut would be at least 1.5 percentage points.

Key crossbench senators, who have blocked much of the goverment’s previous agenda, have backed the proposal.

Independent Senator Nick Xenophon says giving small business a boost is a sensible idea as they are a key driver of employment.

“It would be good for employment and I think fundamentally popular without costing the budget too much,” the South Australian senator told reporters on Wednesday.

The Australian Greens would also support a two-tier corporate tax system that would shift the burden away from small business to make large, wealthy businesses pay their way.

However, business groups believe companies of all sizes should get the 1.5 per cent reduction as previously promised by the government, saying a two-tier system would just add confusion.

It’s also not clear what happens to the 1.5 per cent levy that was going to fund the now scrapped paid parental leave scheme or what happens to small businesses that don’t pay corporation tax.

—with AAP.

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