Editor's note

In the debate on the government’s proposed cut to the company tax rate, politicians on all sides have argued about the amount of the cut, the time it takes to be effective and the forecast benefits. But there’s one thing they all seem to agree on - that it should target small businesses.

However,  if it's “jobs and growth” you want, giving a tax break to small businesses is not the best way, Saul Eslake’s analysis shows. He explains why the government would do better to aim it at new businesses instead.

Jenni Henderson

Editor, Business and Economy

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The Turnbull government should be focusing on giving new businesses, not small businesses, a tax cut if the aim is “jobs and growth”. Stephanie Gardiner/AAP

Why small business tax cuts aren't likely to boost 'jobs and growth'

Saul Eslake, University of Tasmania

Based on evidence, policies which seek to encourage job creation and innovation via a tax cut should preference large or new businesses, rather than small ones.

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