With independent MPs Rob Oakeshott and Tony Windsor now officially backing Labor, and Julia Gillard now set to lead a minority government, Labor can begin the potentially arduous process of trying to push its small business election promises through parliament.
However, the political environment is far from certain. Every piece of legislation is likely to need the stamp of approval from each independent, which means it could be difficult to get bills made into law.
Labor’s major SME-related election promises include tax reform with a reduction in the corporate tax rate, and the introduction of a new R&D tax credit, along with the proposals announced in May as part of the Henry Tax Review.
Here are the big six:
Labor has promised to reduce the company tax rate to 29% from 2012-13 for businesses with under $2 million in annual revenue, with about 720,000 companies to receive a benefit. Companies with revenue over $2 million will receive the tax cut the following year.
Small businesses will be able to access a write-off for assets up to $5,000 from 2012-13, including the 70% of small businesses that don’t receive the benefits of the company tax cut.
Tax depreciation will be simplified, with assets to be put into a single 5% depreciation pool.
Labor will introduce a new R&D tax credit scheme providing a 45% refundable tax credit for businesses conducting research and development activities. Replaces the existing tax concession scheme.
Work on the National Broadband Network has become a key election issue as the independents emphasise the need for faster broadband in rural areas. The NBN will now go ahead with its plan for a national cable network, as opposed to the Coalition’s plan for more wireless technology.
Labor has promised to stop lenders from automatically increasing limits on credit cards. Customers will need to give their consent before a limit can be broken, with COSBOA backing the proposal.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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