Small Business Grants

The Hon. D.W. RIDGWAY (15:07): My question is to the Treasurer. Can the Treasurer indicate whether the Small Business Grants provided by this government attract any concessional tax treatment or not?

The Hon. R.I. LUCAS (Treasurer) (15:08): I thank the honourable member for the question, because there have been one or two questions that have gone into Treasury and also to my office in relation to the tax treatment for the Small Business Grants. I think, to be fair, the overwhelming majority—I think the last number I saw was that the taxpayers have provided more than I think $260 million worth of taxpayer-funded assistance to—

The Hon. D.W. Ridgway: How much?

The Hon. R.I. LUCAS: I think it was about $260 million—

The Hon. D.W. Ridgway: Massive.

The Hon. R.I. LUCAS: A massive sum of money—to thousands of small businesses. The majority of those clearly were suffering and suffering badly, so they are not really overly concerned about the tax treatment, because they were suffering significant losses during that particular period. But clearly for a small number of businesses the tax treatment was important.

As a result of those queries I wrote to the federal Treasurer to see what the tax treatment was. In the normal circumstances all grants provided by governments are taxable under the commonwealth tax arrangements, but as I understood it there were very rare and isolated examples where they might be treated differently, so I sought clarification.

The federal Treasurer has confirmed, by way of correspondence to me in the last week or so, that the usual treatment for grants will be applied to the Small Business Grants Round 2 program that the government sought clarification on. That is, we had requested a non-assessable, non-exempt income treatment for the Small Business Grant round, which is evidently referred to by the acronym NANEI.

The commonwealth government and federal Treasury have confirmed that it will not be eligible for NANEI treatment and therefore will be assessed in the usual way. The advice was uploaded onto the Treasury website for those people who might have been interested in the tax treatment of the grant schemes.