The small business tax rate under a Labor government is still undecided while the party places a cap on the amount claimable for accounting and legal advice and pledges to pump more money into TAFE and training.Â
Small business didn't rate a mention in opposition leader Bill Shorten's budget reply on Thursday night.
More National News Videos
Shorten sets Labor's agenda
The battle lines are drawn with Labor leader Bill Shorten revealing what he will and won't support in the budget, setting up a fight with the government.
Uncertainty over tax cut
The omission led government to claim Labor will rescind the 2.5 per cent tax cut for businesses earning up to $50 million in turnover.
Small Business Minister Michael McCormack says, "Labor has confirmed it will hike small business taxes".
![Opposition leader Bill Shorten gave his budget reply on Thursday night.](/web/20170514053225im_/http://www.smh.com.au/content/dam/images/g/w/3/1/m/n/image.related.articleLeadwide.620x349.gw38ll.png/1494574340635.jpg)
But shadow small business minister Katy Gallagher says a tax increase for small business is not Labor's position.Â
"We support a tax cut for businesses with a turnover of $2 million threshold, we have not changed that position but we acknowledge that this is not what passed the Senate," she says.Â
Gallagher says Labor will reconsider its position in light of the Senate passing the government's reduced tax rate of 27.5 per cent for businesses with a turnover of $10 million.
But she says Labor does not support an extension of the tax cut to big businesses. It also won't back the $300 million in incentives pledged by the government to try to remove red tape for small business.
![Senator Katy Gallagher says a tax increase for small business is not Labor's position.](/web/20170514053225im_/http://www.smh.com.au/content/dam/images/g/q/g/q/e/i/image.related.articleLeadwide.620x349.gw38ll.png/1494562658403.jpg)
Tax and legal advice
Shorten's budget reply included a promise to introduce a $3000 limit on how much people can deduct for managing their tax and legal affairs, in a crackdown that will raise $1.8 billion over a decade.
Gallagher says this limit will not affect the "vast majority" of small businesses.
![Kate Carnell is "deeply disappointed" with Labor's budget response.](/web/20170514053225im_/http://www.smh.com.au/content/dam/images/g/v/e/a/9/e/image.related.articleLeadwide.620x349.gw38ll.png/1494562658403.jpg)
"I think a cap of $3000 should certainly incorporate most of the small businesses that Im aware of," she says. "This is ensuring that we have a fair taxation system." Â Â
Vocational training
Shorten also pledged to allocate two out of every three dollars raised of public vocational education funding to public TAFE and creating a $100 million TAFE fund.
![Small Business Minister Michael McCormack says Labor "doesn't get" small business.](/web/20170514053225im_/http://www.smh.com.au/content/dam/images/g/v/4/l/v/z/image.related.articleLeadwide.620x349.gw38ll.png/1494562658403.jpg)
"We will reverse the trend toward privatisation – because it's time to put public TAFE back at the centre of our national training system," Shorten said.Â
Ombudsman and industry groupsÂ
Kate Carnell, the small business and family enterprise ombudsman, is critical of Labor's budget response. Â
"I'm really disappointed about no support on tax reduction for small business," she says. "It's deeply disappointing as it impacts on the instant asset write-off as well for small business."
Carnell is also critical of the cap on taxation and legal advice.Â
"It's hard to work out why you'd do it," she says. "Let's be fair that if you need legal or tax advice it often costs more than that. We'd be really encouraging small business to get the necessary advice."
However the ombudsman welcomed the support for TAFE and vocational education. Â
"A focus on vocational training is something that is really important and the fact is that the current system isn't working very well," she says. "But unless we make it more cost effective for small business to employ apprentices and trainees having more trainees at TAFE won't solve the problem.  Trainees and apprentices in the first year don't add much and often cost businesses money. It's like most things its really a cost benefit issue in those first few years."Â
Peter Strong, head of the Council of Small Business of Australia, also branded the policies "disappointing".
"My members are saying they are really concerned that Labor is no longer interested in small business," he says. "They are interested in the employees of small business."Â
The small business minister says Labor's policies will result in higher taxes for small business and less opportunities.Â
"Bill Shorten's speech confirms what Australians in small business know – Labor just does not understand small business," he says.
Follow MySmallBusiness on Twitter, Facebook and LinkedIn.
0 comments
New User? Sign up