ELECTION 2010: Labor’s small business statement focusses on tax measures

Small business minister Craig Emerson has hit back at the Opposition’s suggestions that Labor has not released a small business policy and says the ALP will focus on tax breaks for small business, announced as part of the Henry Review.

Emerson, who appeared last night on ABC Television’s Lateline Business program in a debate with Opposition small business spokesperson Bruce Billson, hit back at Billson’s claims on that the Government had not released a specific small business policy.

“It’s a pity Bruce didn’t bother to consult the small business policy that was released last Thursday when he made that statement, which is factually incorrect, but that’s nothing new in this particular election campaign,” Emerson said last night.

According to a media release on the Labor website, the party’s small business “statement” was released with almost no fanfare on August 12.

The policy contains just four measures, all of which were announced well before the election was called in late July.

Three of the tax-related policies were announced as part of the Government’s response to the Henry Review in May.

Labor has committed to giving companies earning under $2 million a head start on a 1% cut in the company tax rate to 29% (these will come in from 2012-13 for companies under this threshold, and a year later for other companies) and will also introduce a immediate tax write-off for companies with turnover under $2 million who buy an asset worth up to $5,000.

Labor will also simplify depreciation rules by creating a single depreciation rate for other assets.

The fourth plank of Labor’s policy is a promise to introduce a new R&D tax credit scheme, which will provide a 45% refundable tax credit on research and development.

However, this policy is hardly new. The Government announced the tax credit in the May 2009 federal budget and failed in a bid to get the scheme through Parliament earlier this year.

In a somewhat spirited debate, Emerson defended the Government’s economic record and said it had used several stimulus measures – including a special investment allowance – to help shepherd small businesses through the GFC.

“Looking forward to the coming term of Parliament what we’re saying is that we will ease back on the stimulus, but we won’t yank the supports out from under small business… We will phase the stimulus down consistent with the budget going back into surplus in 2013, as we said it would.”

Emerson deflected criticism that Labor will not make the position of small business minister a cabinet post, as the Coalition has promised to do.

“We haven’t made a commitment on that and one of the… reasons for it is I have had plenty of influence in this government, in the formulation of the tax relief that was provided.”

SmartCompany requested an interview with Emerson but did not receive a response prior to publication.