Greens propose $3 billion tax break for small businesses dealing with wage increases
The Greens have proposed giving small businesses $3 billion in tax breaks tied to employee pay rises and hiring more workers.
The Greens have thrown a bone to small businesses worried about a Labor government, suggesting a $3 billion tax break to cushion the impact of rising wages.
Announced today, Greens Senator Nick McKim said businesses with turnover less than $2 million should be able to claim 110% of their wage bill against their tax obligations.
The credits would enable some 2.1 million businesses to reduce their tax base by $110 for every $100 extra they spend on wages, either through pay rises or hiring more workers, the Greens said.
“Successive Labor and Liberal Governments have offered tax breaks for small businesses to invest in technology, property and machinery,” The Greens said on Thursday.
“They’ve offered incentives to replace workers with robots. We’re balancing the ledger, putting people back at the heart of small business policy.”
Supporting nine in 10 Australian businesses hiring more staff or giving pay rises would cost taxpayers $3 billion over the forward estimates, while many small businesses exceeding the relatively low $2 million turnover threshold would miss out altogether.
The Greens are expected to take the policy into negotiations with the next government, hoping some or all of the idea may be implemented in coordination with either Labor or the Coalition.
If Labor is elected later this month, as recent polling suggests, the idea could be used to mute concern about how industrial relations reforms could hurt small businesses.
However, Greens influence over either side of the house will largely depend on the composition of the next parliament, specifically the result of the half-Senate election.
Opposition Leader Bill Shorten has declared the upcoming national poll as a “referendum on wages”, sparking anger from business groups, who claim a pay rise would hurt small-business owners.
Shorten has maintained a boost to real wage growth will flow “back into the tills” of small businesses through spending growth, although there has been scepticism over whether an uptick in consumer activity would offset higher wages.
Labor has also pledged to restore Fair Work Commission cuts to Sunday penalty rates for retail and fast-food workers, a move which would roll back several years of progressive decreases in the rate.
The wage credit policy is part of a growing platform of small business-focused ideas being shopped around Canberra by the Greens, including $200 million for clean energy grants, announced in March.
The Greens will launch their small-business platform this afternoon in Malvern, Victoria, where they will also spruik an idea to remove the thresholds on unfair contract terms law, among other policies.
Greens target red tape
The Greens are also taking aim at red tape, floating the idea of removing small employers from the superannuation collection process.
The party says it will lobby the next government to change the rules so workers in small businesses go through the ATO to make super contributions.
“Small business owners have enough on their plate without having to act as a collection agent for superfunds,” the Greens said on Thursday.
The party has also suggested cutting red tape for micro-businesses by doubling the GST registration threshold from $75,000 to $150,000, indexed to inflation.
The Greens are looking to bolster support among the small-business cohort, but according to recent research, they have a long ways to go.
A Sensis survey of 1,001 SME owners conducted late last month found just 3% intend to vote for the Greens, compared to 42% for the Coalition and 13% for Labor — with 35% undecided.
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