Labor has used its official campaign launch yesterday to announce a new tax break for SMEs, which some small-business owners have already given a “big tick”.
Under a Labor government, small businesses with revenue of $10 million or less would receive a 30% tax break on the wages of employees younger than 25 or older than 55, or employees who are a carer or parent trying to return to the workforce.
The cut would be limited to five employees per business for their first year of employment and would be capped at $50,000 per company. Forward estimates show the policy would cost the budget $141 million.
The policy was formally announced by opposition leader Bill Shorten at the party’s campaign launch yesterday, which carried an overarching theme of equality and unity.
“Too many mature Australians are too young to retire but are unable to find work, leaving around 86,000 Australians aged over 55 looking for work,” Shorten said.
“At the same time, young jobseekers today are finding it harder to get a foot in the door. Nearly one in three young people in the labour force are either unemployed or underemployed. There are almost 260,000 unemployed youth in Australia that want a job but simply aren’t being given the chance.”
“We believe that young or old, city or bush, every Australian, regardless of their age, regardless of their postcode, has the right to the dignity of work.”
Labor also announced a new crackdown on “dodgy royalties”, with a policy targeting multinationals who funnel profits such as royalties through tax havens. The policy is estimated to recoup $2.3 billion over the medium term.
Small-business owner and founder of baby formula business LittleOak, Elke Pascoe, tells SmartCompany she believes the policy is a good move, saying it gets a “big tick” from her.
“Anything that encourages and creates ways for parents to get back to the workforce, as well as incentivising the business community to embrace the incredible talent that we have in our youth, is incredibly valuable — particularly for small businesses,” Pascoe says.
Pascoe says the part of the policy which encourages businesses to hire parents is particularly important, believing it’s an area all governments should be looking to bolster.
“Getting parents, particularly mums, back into the workforce is something that every government should be focused on. Working mums are a huge asset to the economy, for so many reasons, and real policies that can encourage women back to work, and encourage businesses to employee these hardworking individuals over the long term, should be supported,” she says.
However, Council of Small Business Organisations Australia chief executive Peter Strong warned of the policy’s potential red tape ramifications, telling SmartCompany Labor would need to “make it easy”.
“We need to make it easy to prove to the tax office you’ve employed someone from that group, and that’s not a little question. Employment service providers will be a key part of this, and businesses will need to get the benefit without a lot of paperwork,” he says.
“I almost don’t see it as a tax cut — it’s an incentive to employ someone done through the tax system, which could be very complicated.”
Pascoe is wary of this too, and says the Labor party should endeavour to engage with small-business owners to work out how best to implement the policy and ensure it has a “genuine, long-range view”.
“These policies only work if the government makes it easy for business owners to apply it to their business, and more to the point, makes it easy to understand in and amongst the multitude of taxation considerations,” she says.
“That way it might have some chance of being relevant, realistic and workable for those where this policy can make a real difference.”
Strong also warned the tax break would not benefit businesses who didn’t make a profit but did admit “on the face of it” the policy looked like a good one, and also stressed work would need to be done to make sure small businesses were aware the tax break exists.
NOW READ: Labor announces $3 million pledge for Perth-based blockchain academy
NOW READ: You decide: Uncertainty prevails as small business emerges as defining factor in election
Comments