Labor and the Coalition are sparring over the cost of proposed small business tax breaks, with Treasurer Jim Chalmers claiming extra deductions on small business meal expenses could be between $1.6 billion and $10 billion a year.
But Shadow Treasurer Angus Taylor has fired back, saying estimates undertaken by the Parliamentary Budget Office (PBO) show the policy would give up less than $250 million in tax revenue.
Chalmers urged the Treasury to assess the Coalition’s policy proposal, which Opposition Leader Peter Dutton said would boost small business morale and improve cashflow for hard-hit hospitality providers.
“The costings done by the Treasury are very conservative, they’re based on the fact that eligible businesses would only claim about an eighth of what they’re entitled to; that’s how you get $1.6 billion,” Chalmers told ABC News Breakfast Tuesday morning.
“If they claim everything they’re entitled to it would be more than $10 billion a year.”
More “responsible” small business support policies put forward by Labor include energy bill relief and the $20,000 instant asset write-off extension, Chalmers continued.
But the figures put forward by the Treasury are “straight nonsense”, Taylor told reporters at Parliament House on Tuesday morning, while insisting the Coalition will release its full policy costings ahead of the next federal election.
Taylor also accused the federal government of using the Treasury’s services for political means, instead of asking the PBO for advice.
“We’ve been working closely with the Parliamentary Budget Office, but the politicisation of Treasury is unacceptable,” Taylor said.
Treasurer Chalmers “wants to play games,” Taylor continued, adding: “He hasn’t got a clue when it comes to what’s really going on in the economy, and frankly, he’s completely out of his depth”.
The policy has become a political lightning rod as the first wholly new small business proposal put forward by either major party in the lead-up to the election, set to take place on or before May 17.
Despite criticisms from Labor, the plan has earned early support from hospitality industry groups and small business representatives, who welcomed new taxpayer support.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
