Biz tax cut chopped from Federal Budget

By David Binning on May 8, 2012 9:19 PM
Filed under Finance

Treasurer promises to fight on.

The Federal Government’s promised 1 percent cut to the business tax rate was nowhere to be seen in the 2012/13 budget announced tonight, which sought to balance the need to return to surplus with providing relief to middleclass voters.

The cut to the 30 percent business tax rate was one of the sweeteners accompanying the Government’s controversial mining tax – a 2 percent cut was promised with the original super profits tax – but opposition from the coalition and the Greens has blocked its passage through the parliament.

The Greens said a universal company tax cut was too large a gift to big businesses, calling for relief to be directed specifically at smaller companies. Treasurer Wayne Swan tonight repeated his determination to usher in a 1 percent cut to the business tax rate in next year's budget.

Scrapping the cut delivered $4.6 billion of the government’s $34 billion in savings to support its goal of converting the current deficit of $44 billion to a $1.5 billion surplus next year.

Swan predicted the government would deliver four budget surpluses in a row, a statement which triggered raucous heckling from across the chamber. 

Defence spending took a $5.7 billion hit, while super benefits for older Australians, international aid and government-subsidised medicines are also in line for a major trim.

Despite trimming back in several areas the Government also announced extra spending for parents with school children, aged care, generous support for dental programs as well as the $1 billion-plus national disability insurance scheme (NDIS).

Remember to sign up to our CRN Channelwire bulletin to stay connected with the latest channel news and analysis from Australia and around the world.

Affirming its commitment to helping small businesses, the Government said it would introduce the so-called "loss carry-back" tax break, allowing businesses to write off losses of up to $1 million against previous profits, an initiative expected to benefit some 110,000 businesses.

“This will support businesses when they need it,” Swan said.

Small businesses will also receive a $6500 instant asset write-off to help with the acquisition of business equipment, a measure expected to benefit 2.7 million Australian companies. An immediate write-off up to $5000 is available for motor vehicles. 

The Government estimated this year's budget would deliver $3.7 billion of relief for Australian small businesses.

Follow us on Facebook and Twitter

Copyright © CRN Australia. All rights reserved.


Biz tax cut chopped from Federal Budget Treasurer Wayne Swan delivers his fifth budget.
Top Stories
Generation-e acquires Paradyne
Creates 1,000-client powerhouse in UC and cloud.
Crunching the numbers: how the 2015 CRN Fast50 did it
Unearthing secrets of their success.
Squeezed in cloud, Rackspace bets on 'co-opetition'
AWS and Azure deals follow dark years for Rackspace.
Sign up to receive CRN email bulletins
Was your most important vendor the same in 2015 as in 2014?

Latest Comments
CRN Magazine

Issue: 343 | October 2015

CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.