Families and small businesses are expected to benefit when the budget returns to surplus, the federal government said in its the 2012-13 Federal Budget overview.
As part of the revenue received from the Minerals Resource Rent Tax, the government will introduce a loss carry-back to support once profitable businesses to return to profit by providing a tax benefit of up to $300,000 per year.
Also from 1 July, the government will be delivering tax breaks for small businesses, like the increase to like the increase to the instant asset write off threshold to $6,500
The budget will also provide $2.1 billion to help families with school children.
According to the government, it is important for the budget to return to surplus as it “allows monetary policy to respond to economic developments as appropriate, taking account of the near–term challenges facing certain workers and businesses as a result of the patchwork economy and a strong Australian dollar”.
These commitments have been welcomed by retailers.
Margy Osmond, Australian National Retailers Association (ANRA) CEO, said the budget recognised that not every sector of the economy is booming with retail and many customers being an example.
“The move to invest the ‘Spreading the Benefits of the Boom’ package will put money where it is needed, in the hip pockets of Australians struggling with rising health, education and utility costs and concerned the compensation for the carbon price will not cover the full impost of the tax.
“Retailers will be disappointed the promised company tax rate cut of 1 per cent has been lost, but recognise there are positives for the struggling retail sector if our customers have more security in their family finances.
“This boost – including the $2.1bn Schoolkids package – may give Australians the protection they have been looking for to peek out of their savings bunker and have a look around the stores again.
“We have seen some light at the end of the recovery tunnel with a 0.9 per cent jump in retail sales in March. The improvement over the past three months has been largely attributed to the significant drop in retail prices in the past 12 months, with prices low and the Reserve Bank of Australia cutting the cash rate there is a glimmer of hope filtering through the sector.
“Retailers remain concerned about the impact of the carbon price on families, but also the impact of any price rises from the manufacturing sector that retail will have to absorb or pass on to consumers. We are pleased to see the Budget has delivered the promised compensation to householders, but there are no guarantees that it will be enough to swing the balance back from the conservative consumer to the willing to spend consumer.”
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