More than 110,000 Australian companies will now be able to benefit from a new tax break after the passage of legislation through the Parliament.
Under the Gillard Government's loss carry back initiative, small businesses will be able to invest in their operations knowing they can 'carry back' their losses, to offset past profits and get a refund of tax previously paid on that profit.
Companies will be able to carry back up to $1 million of these deductions against profits made in the previous tax year and receive a refund of up to $300,000 each year from tax previously paid.
This is an important reform to the company tax system that was recommended by the Australia's Future Tax System (Henry) review.
Loss carry-back had widespread support at the Government's successful Tax Forum in 2011 and was developed in close consultation with business representatives, community representatives and tax experts through the Business Tax Working Group.
The Coalition, however, opposed these reforms and have promised to unwind them if they are elected.
Under an Abbott Government, 110,000 small businesses would lose tax breaks like loss carry-back and 3.2 million small businesses would lose eligibility for the instant asset tax write-off. On top of this Australia's largest employers would face a higher company tax bill to pay for Mr Abbott's expensive and irresponsible paid parental leave scheme.
The Gillard Government is delivering on support for small business while Tony Abbott's Coalition will strip tax breaks away from small business and make them pay more.