As Parliament resumes, $1.55 billion in SME tech and training offsets remain in legislative limbo

Jim Chalmers tax labor Offset

Treasurer Jim Chalmers. Source: AAP/Mick Tsikas

The new Labor government will prioritise legislation around paid family violence leave and the establishment of Jobs and Skills Australia in the opening days of the 47th Parliament, Prime Minister Anthony Albanese says.

However, the nation’s newly-elected leader stopped short of mentioning the technology and digital skills tax offsets introduced by the Morrison government, which the Australian Taxation Office (ATO) says are not yet law and require input from the new government.

Parliament resumes on Tuesday, with the nation’s lawmakers descending on Canberra for the first time since the Coalition’s defeat at the ballot box in May.

Speaking to reporters in the nation’s capital, Albanese today outlined some of his government’s legislative priorities for the first sitting days of the new Parliament.

The government has “a mandate to have 10 days paid domestic and family violence leave”, he said, reflecting a long-running Labor pledge to enshrine those rights, and the Fair Work Commission’s provisional backing of the scheme.

Labor also has a clear runway to “create Jobs and Skills Australia”, Albanese said, referring to the party’s proposal to bring together VET educators, industry leaders, and union groups to address the nation’s longterm skills needs.

The party will also push to “address cost of living challenges that are out there, but having cheaper child care and through other measures as well”, he said.

All told, Labor intends to introduce “at least 18 pieces of legislation in our first week in Parliament because we don’t want to waste a day”, the Prime Minister told Sky News on Sunday.

Small Business Minister Julie Collins has also elaborated on Labor’s policy priorities, today declaring Labor will soon introduce legislation outlawing unfair contracts for more small and medium-sized enterprises and extending business protections.

“These changes will improve the long-term resilience of Australia’s small businesses and help them bounce back following significant challenges in recent years,” she said.

Labor’s emissions reduction plan is also high on the agenda, with the party signalling it will work with the Greens to ensure its target of 43% reductions by 2050 is a bare minimum benchmark.

$1.55 billion technology and training tax offsets waiting for government approval

While senior Labor figures have put several high-priority items on the to-do list, the government is yet to detail where laws underpinning a suite of small business tax offsets fit into its legislative plans.

In particular, questions remain over the Skills and Training Boost and the Technology Investment Boost, a program the Morrison government announced in its 2022-23 federal budget, which created a 20% “bonus” tax offsets for small businesses which invest in new digital skills training for staff or technological upgrades.

“For every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction,” former treasurer Josh Frydenberg said at the time.

The Skills and Training Boost and the Technology Investment Boost came into effect on budget night, meaning small businesses could claim the bonus offset for any relevant expenses incurred past 7.30pm on March 29.

Accounting groups and tech-focused investors welcomed the decision, saying it would help Australian businesses adapt to a rapidly changing economy.

Combined, the Morrison government expected both policies to reduce tax receipts by $1.55 billion over their lifespan.

While business were encouraged to spend on technological upgrades and staff training after the announcement, the ATO noted the measures “are not yet law and are subject to decisions from the new government”.

Speaking to InnovationAus in April, then-shadow treasurer Jim Chalmers said Labor would support the measures. Former treasurer Frydenberg told the publication legislation would be introduced after a consultation period.

But the status of both offsets “remains unclear”, CPA Australia General Manager Media and Content Dr Jane Rennie told SmartCompany on Tuesday.

“Given that many businesses have already gone and spent the money, we want the federal government to legislate these deduction boosts as soon as possible.”

While Chalmers initially said Labor would back the offsets, much has changed since budget night, with the Treasurer repeatedly stating the government’s bottom line is in worse shape than first anticipated.

The Treasurer has since signaled the government may need to make more cuts than first expected when it reveals its own budget in October.

Chalmers added he will be “really upfront and really blunt about those challenges” in a ministerial statement planned for this Thursday, casting a shadow over the $1.55 billion cost of those offsets on the nation’s bottom line.

SmartCompany has contacted Chalmers’ office for comment.

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