Wayne Swan has thrown a lifeline to small businesses that are battling against the high dollar and weak consumer spending in an attempt to limit the pain of the two speed economy.
From July, loss-making small businesses will be able "carry back" their losses, allowing them to receive a refund from taxes paid in the previous year.
The change, which is forecast to cost $714 million over the next four years, is intended to help firms in the economy's slow lanes by giving companies a source of income amid the suffering. And it comes into force at the same time as previously-announced tax breaks that will allow small businesses to claim hefty write-offs on new equipment or cars.
The government says the loss carry-back scheme should also encourage businesses to invest in innovation because companies will receive tax relief for large investments that drive them into the red.
"This will support business when they need it – providing an injection of funds to invest in new ideas, equipment and markets," Mr Swan said.
"So a cafe on a tourist strip can get the funds they need to refurbish or keep on valuable staff, so they're ready for when conditions pick up."
The maximum refund of previously paid taxes that small businesses will be able to receive is $300,000, as eligible losses will be capped at $1 million.
While business groups have backed the measure, they point out that it will only assist a minority of small businesses, because it applies solely to companies, not partnerships or sole traders.
According to Treasury estimates, the change will benefit up to 110,000 companies. This is less than 5 per cent of the country's 2.7 small businesses.
Separately, Mr Swan also highlighted a new tax break that will allow small business owners to write off any new business asset they purchase costing up to $6500 from this July. For cars or utes, the write-off will apply for assets worth up to $5000.
Funded by the mining tax, this write-off will be available to all of the country's 2.7 million small businesses and is expected to cost $1 billion in its first year.
Together, Mr Swan said the measures were a "huge" package that would help redistribute mining wealth to weaker industries.
"Those two things combined are a huge package for all of those small businesses out there who are not in the fast lane of the mining boom," Mr Swan said.
Despite the help for businesses in the economy's slow lanes, small companies will miss out on a cut in the company tax rate from 30 per cent to 29 per cent, after the government abandoned its pledge to cut company taxes in the face of political opposition.