REDLAND small businesses, pensioners and young people will be the losers under treasurer Wayne Swan's fourth Budget, handed down on Tuesday night.
Mr Swan's fiscal measures were aimed at reducing the $22.5 billion deficit and bringing the economy back into surplus in two years.
Cleveland accountant and tax expert Greg Jewell said the budget increased taxes in four main areas rather than saving money, a move that would hit small businesses hardest.
"Wayne Swan gives with one hand and takes with the other in this budget, which really has nothing to offer those small businesses doing it tough and the pensioners in Redlands," Mr Jewell said.
"Phasing out the spouse tax offset, changing the fringe-benefit tax on company cars, eliminating the low-income tax threshold for under 18s, and means testing the health care rebate on private insurance premiums, are the four main measures the Treasurer has used to increase taxes," he said.
Abolishing the Entrepreneur's Tax Offset and replacing it with a $5000 tax deduction on the purchase of a company car would have serious consequences for small businesses in Redland City, Mr Jewell said.
"Taxpayers who most need support, mainly small businesses with a turnover of under $75,000, will lose this offset," Mr Jewell said.
"A business with a $50,000 profit, will no longer be eligible for a 25 per cent reduction in their tax liability.
"I know many companies in the Redlands using that offset to survive and employ staff and now the government has taken that away from them and is forcing them to spend money and buy a company car in order to get a $5000 tax deduction.
"It is surprising that this measure will only start in the 2012-2013 tax years, delaying the purchase of these vehicles and slow the economy until then," Mr Jewell said.
Phasing out the spousal tax offset would affect Redland households without dependent children not eligible for Family Benefits.
Any spouse under the age of 38, who is claiming this offset will not be eligible for it next year. The Government stipulated cut-off date was for anyone born on or before July 1, 1971.
The formula for valuing car benefits, currently a sliding-scale based on the number of kilometres travelled, will be replaced with a flat 20 per cent rate.
"So local tradies, the mower man or anyone with a company car, will lose if they do 25,000km or more," Mr Jewell said.
Redland families running a small business and using a trust structure to split income between family members, including children, will also lose, Mr Jewell said.
After July 1, the low-income tax threshold for under 18s will be reduced allowing trusts to pay a maximum of $416 to a minor.
"Up to now, trusts could effectively pay up to $3333 a year tax free under a child's name and in the Redlands, many families used that money to pay school fees," Mr Jewell said.
"That money would help take the pressure off these small businesses in these tight financial times," Mr Jewell said.
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