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Small businesses will be more easily able to offer employee share schemes under changes proposed by the federal government.

Employee share schemes allow employees to invest in the business for which they work, providing them with an incentive to share in the growth and success of the business.

However, the current rules have been found to be too complex and discourage such schemes being set up.

Treasurer Josh Frydenberg said a key change was increasing the value limit of eligible financial products that can be offered in a 12 month period from $5000 per employee to $10,000 per employee.

As well, ‘contribution plans’ would be allowed, and scheme operators would not have to publicly disclose commercially sensitive financial information, unless they are otherwise obliged to do.

Shadow treasurer Chris Bowen said Labor was open to working with the government on the changes, as the growth of start-ups started to wane.

‘Labor’s stakeholder feedback suggest that these changes come out of the blue,’ Mr Bowen said.

‘We look forward to seeing the finer details before taking a final position.’