Turnbull to unveil six-point small business action plan

Federal Opposition leader to unveil a six-point small business action plan that includes tax-loss carry back, relief from the super guarantee, redtape reduction and Cabinet-level representation

Federal Opposition leader Malcolm Turnbull will tonight unveil a six-point small business action plan that includes a tax-loss carry back, relief from the superannuation guarantee levy, redtape reduction, a one-stop-shop regulatory portal, support for family business, and Cabinet-level representation.

In a speech to the Australian Chamber of Commerce and Industry in Hobart, he will detail the plan, which picks up on ideas and suggestions provided to the Coalition through 23 ‘Jobs for Australia’ forums the Coalition has recently held across all six states of Australia (with another 17 scheduled).

"The Coalition believes small business is the most critical part of our economy - the source of much of Australia's innovation, economic growth and job creation. In these difficult times small firms must be given the appropriate support to equip them to lead the economic recovery," he says.

Tax-loss carry back

To bolster the cash position of firms with a solid operating history but facing large operating losses in 2009 and/or 2010, Turnbull says the Coalition would provide limited carry back of tax losses, capped at $100,000 of refunded tax per firm over the two years.

This would allow firms to offset their operating losses and retain staff by claiming back taxes paid over the past three years, up to this limit.

The measure would only apply for businesses with at least one employee in each year a refund claim is made, and in each year that tax was previously paid.

Carry back would be governed by the same rules that currently apply when companies carry forward losses to reduce tax liabilities in future years.

Since carry-back refunds would over time be offset by lower losses carried forward, the long-run budgetary cost of this measure largely arise from changed timing of receipts, Turnbull says.

Similar treatment of current losses to reclaim past tax payments is available to firms in the UK, Canada, Ireland, the Netherlands and the US, where the Obama Administration recently extended the carry-back period from two to five years.

Superannuation Guarantee relief

To reduce on-costs for firms with 20 or fewer staff, the Coalition proposes a temporarily reduction in the cash cost to small employers of the Superannuation Guarantee Levy.

As previously flagged, the Commonwealth would pay for a portion of their superannuation obligations for a period of two years – 3 percentage points this year, and 1.5 percentage points next year. This will make it easier to keep employees on the payroll.

OECD-best practice regulatory burden

Quantifying the average time it takes to comply with each requirement is a key part of determining the economic costs of regulation, Turnbull says.

The Coalition commits to applying a comprehensive quantification to the full range of Commonwealth, state and local filings required to start or expand a business, and to ensuring that this overhead burden, as measured in terms of hours and costs, is then reduced to at least match (and preferably improve on) OECD best practice over the next three years.

One-stop-shop regulatory portal

The Coalition also commits to working with the states and local governments to deliver integrated online access to all forms and filings, regardless of which level of government imposes them, via a one-stop-shop business portal.

Turnbull says cutting redtape and bringing these functions together will require substantial co-operation and depend heavily on the accelerated replacement of traditional reporting methods with internet-based alternatives.

To make this one-stop-shop for compliance and regulatory filings a reality, the Coalition will create a small business service delivery agency expressly charged with delivering integrated online access.

Support for family businesses

The new small business service delivery agency will also operate a program that will provide support and advice for family businesses on succession planning and family business professionalisation.

While this is not a large resource outlay, Turnbull says it represents an appropriate response to what is a vital issue for many of Australia’s small firms.

Cabinet-level representation

Turnbull says it is vital that small business has a seat at the table in Canberra that matches its importance to the national economy.

Steve Ciobo, the shadow minister for small business, is already part of the shadow cabinet. The next Coalition government will preserve this high level of representation in Cabinet.

"The plan includes both proposals that offer a direct financial lifeline to struggling firms in difficult times, and moves to get government out of the way of the entrepreneurial sector of the economy," Turnbull says.

Ciobo adds: "These measures are just the first step on the road to recovery. The Coalition is committed to returning the smaller firms and entrepreneurs who drive our economy and create the bulk of new jobs to centre stage in the policy debate."

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