The Committee for Gippsland has praised a Federal Government decision to reduce the small business tax rate from 1 July.
In Tuesday’s budget, the government announced it would cut the rate from 28.5 per cent to 27.5 per cent for businesses with a turnover of less than $10 million.
Under the changes, which saw the threshold increase from $2 million, businesses with a turnover of less than $10 million would also have access to other tax incentives, including the small business depreciation pooling provisions, simplified trading stock rules, and Pay-As-You-Go Instalment payment options.
It is a move that will attract investment into smaller regions such as the Latrobe Valley, according to C4G chief executive Mary Aldred.
“Small businesses are one of the biggest employers in the Latrobe Valley and anything that provides an incentive to grow these businesses is welcomed,” Ms Aldred said.
“In particular it (the changes) sends a strong message to small businesses to recruit more employees.”
Not just targeting retail outlets, the changes will also impact the region’s agricultural industry, another of the region’s biggest employers.
Ms Aldred said the tax break would encourage further interest into the farming sector.
“Sometimes people don’t look at farms as small businesses, but they are innovative small businesses that will also have an incentive to grow,” she said.
“Farms, food and agri-business is an incredibly significant area of employment in Gippsland we want to see continue, and the tax cut is a great way to entice jobs and business development in the industry.”
Federal Member for Gippsland Darren Chester labelled the changes as positive.
“The government has laid out an economic plan that will invest in infrastructure, help regional communities, but also give businesses more confidence,” Mr Chester said.
“The decision to cut the small business tax rate will be very positive for small businesses and farmers in Gippsland – small businesses are the engine room of our regional economy and I believe it will give them the confidence and the certainty to hire more people in the future.”
The Federal Government claims the tax rate cut will affect about 870,000 businesses and 3.4 million Australians.
It is unclear how many Latrobe Valley businesses fall into the bracket.