Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Labor promises tax deduction for small business

Jotham Lian and Adam Zuchetti
Jotham Lian and Adam Zuchetti
06 May 2019 1 minute readShare
Bill Shorten

Labor has promised a 30 per cent tax deduction for small businesses that hire younger or older jobseekers who have been unemployed for at least three months as part of its campaign launch.

Opposition Leader Bill Shorten (pictured) has announced that small businesses with an annual turnover of up to $10 million will be able to claim an extra 30 per cent tax deduction on the wage of a jobseeker aged under 25 or over 55 if they have been unemployed for at least three months, or a parent or carer returning to work.

The measure, set to cost the budget $141 million over the forward estimates, will allow businesses to claim for up to five new employees for the first year of employment, capped at $50,000 per company.

Council of Small Business Organisations Australia (COSBOA) chief executive Peter Strong said employers paying workers $50,000 would get a rebate of $1,500.

“It’s not an awful lot, but it’s not petty cash either,” he told ABC NewsRadio on Monday (6 May).

“It makes you think about a group you might not have thought about, which is really good news.”

Labor estimates that 20,000 people a year will benefit from the measure.

“I am proud to put youth unemployment on this election agenda because young people, youth unemployment, it’s more than double the national average, it’s much higher, in many communities, and what a waste. What a waste of hope and human potential,” Mr Shorten said in Brisbane.

“There is a battle which nearly 100,000 older Australians face when they’re longer in periods of unemployment when they’re looking for work, a battle of some older Australians have just surrendered in, been forced to give up. You know who I’m talking about - the older Australians who can’t get themselves back in the game not for lack of effort but for lack of a chance.”

“This is fair go economics at its very finest.”

MYOB CEO Tim Reed said the announcement, if implemented, “will make it easier for small businesses to create new jobs and get more Australians into work”.

“We know from our recent research that when small business owners receive a tax cut, 85 per cent use that money to reinvest in their business, creating new jobs and stimulating the economy,” Mr Reed said.

“Providing an extra incentive to boost employment of those under 25 and over 55, and of carers returning to work, is a smart policy that we wholeheartedly support.”

Mr Reed added: “Small and medium business owners represent a significant share of the vote, so it’s very encouraging to see strong and well-considered policy commitments that will help them succeed.”

It comes after COSBOA modelling examined the proportion of voters in the 20 most marginal electorates that are small business operators, which found that they potentially have the numbers to sway the outcome of the federal election.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Labor promises tax deduction for small business
mybusiness logo
Jotham Lian and Adam Zuchetti
Jotham Lian and Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?