Supporting businesses to invest and compete

Rebalancing growth

One of the challenges of the resources boom is that it's accompanied by a higher Australian dollar. This is making life a lot tougher for industries that compete in international markets like manufacturing, tourism and education.

That is why the proceeds of the Minerals Resource Rent Tax are being used to help businesses, particularly small businesses outside the fast lane of the resources sector.

Loss carry-back

The Government will introduce loss carry‑back to support businesses to return to profit.

In 2012‑13, companies will be able to carry back tax losses of up to $1 million so they get a refund against tax previously paid.

From 2013‑14 companies will be able to carry back tax losses for two years. This provides a tax benefit of up to $300,000 per year.

For example, a manufacturer makes a profit in 2011‑12 and pays $300,000 tax. The next year they make a loss due to depreciation on new investments. They qualify for loss carry-back and are able to get up to $300,000 back.

This will help companies to finance the investments, training and restructuring that is needed to improve competitiveness. This will support productivity and promote employment.

Business Tax Working Group

The Business Tax Working Group has been asked to consider the longer‑term reform directions including reducing the corporate tax rate or other reforms. The final report will be provided to the Government by the end of 2012.

Tax reform road map

Our road map builds on the work of the past and charts a course through the challenges and opportunities facing Australia in the twenty‑first century. The road map's goals are to enhance productivity, encourage workforce participation, ensure fairness and simplicity, and ultimately lift the living standards of all Australians.