The Greens have outlined their tax wish list, calling on the government to legislate its company tax cuts and lift the definition of small business from $2 million to $5 million income.
From July, the government has promised a 1% tax cut for small business, with larger businesses set to receive the same cut in 2013-14.
The tax cut is to be funded by the mining tax – formally known as Minerals Resource Rent Tax – but is not part of the MRRT bill that passed through the House of Representatives.
It’s understood the tax cuts were kept out of the MRRT package to try to minimise the chances of it being delayed.
However, the Greens have threatened to withhold their support for the MRRT in the Senate unless the company tax cuts are legislated immediately.
“We’re not going to be stampeded into getting the MRRT through when we haven’t seen…a reasonable outcome on small businesses,” Greens leader Bob Brown said yesterday.
But Peter Strong, executive director of the Council of Small Business of Australia, is urging the Senate to pass the mining tax, in the hope it will return the focus to small business.
“I’m sick and tired of billionaires complaining and whingeing, and running their ads, when we’ve had a 48% increase in bankruptcies in the past year,” Strong says.
Strong says it’s time to stop focusing on mining because, despite its huge economic impact, the small business sector employs a lot more people.
Meanwhile, the Greens have indicated they do not support a cut in the company tax rate for larger businesses, and have foreshadowed amendments to the mining tax to extend its reach.
They also want the government to adopt the Henry Tax Review recommendation to lift the definition of small business from $2 million to $5 million income, and/or lift the instant tax write-off for new equipment from $6500 to $10,000.
Treasurer Wayne Swan has indicated that legislation for the tax cut is ready to go, and failure to pass the mining tax legislation will create uncertainty for business, particularly small business.
According to Swan, the mining tax is “an important part of the Gillard government’s agenda to build a fairer society”.
“With Parliament resuming this week, it’s really important that the minor parties and independents pass this critical reform,” Swan told the Australian Financial Review.
“Around 2.7 million small businesses stand to benefit from the passage of the $6500 instant asset write-off that will help make their businesses grow.”
“The MRRT will help spread the benefits of the mining boom to every corner of our economy.”
The Opposition has remained vehemently opposed to the entire MRRT package, with shadow treasurer Joe Hockey and shadow assistant treasurer Mathias Cormann accusing Swan of failing to fully inform the public about the “flawed” tax.
They said Swan must immediately release all modeling, assumptions and outcomes that underpin the mining tax before the Senate considers the legislation this week.