Opposition leader Brendan Nelson has made a big pitch for small business voters by proposing to slash capital gains tax paid on the sale of a business on retirement from age 55.
Currently, CGT is waived when a business that is sold for retirement has been owned for 15 years. Under Nelson’s proposal, CGT would be waived if the business has been owned for five years. “After owning and operating a small business for five years, we believe you should be entitled to CGT relief should you sell that business for retirement,” Nelson told Parliament. “You will be rewarded – as you should, if you can grow and increase the value of your business.”
The Australia Chamber of Commerce and Industry, which has been pushing for CGT changes for some time, was pleased to see Nelson highlight the issue. Chief executive Peter Anderson says: “This is a positive initiative that will help get the CGT tax issue on to the national political agenda. We are please that Dr Nelson has given significant focus to that issue.”
Anderson says many small business people have their retirement capital tied up in their business and deserve GCT relief. “The tax treatment in Australia is much more severe than in some of our competitor countries.”
He is also hopeful that Nelson’s proposal will win support from the Rudd Government. “It would give the Government an opportunity to examine or better that proposal as part of its general tax review.”
In sharp contrast to Treasurer Wayne Swan, who only mentioned small business in passing in his budget speech, Nelson singled out SMEs for particular attention, describing them as “the backbone of the nation. Indeed, support for small business is one of the pillars of Liberal belief.”
Nelson said the tax system must not stifle innovation and Australians prepared to have a go. “Men and women taking a risk, borrowing money to create or buy a small business and employ other Australians – few things are more important to our way of life and future prosperity. Get the conditions right for small business and employment will flourish as businesses grow.”