Small Business

Is the Government Gonski?

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In a week when it looked like Opposition Leader Tony Abbott went one too far with the rejection of the small business company tax cut and the Gillard Government showed it was targeting the 2.7 million very small businesses out there, the Labor tendency to snatch a loss from the jaws of victory resurfaced with the Gonski debacle.

This should have been a great week for the PM, successfully embarrassing the Coalition over its opposition to the mining tax. This meant it would not support the pay-off for non-mining Australia via a one per cent company tax cut from 1 July this year for small business and one for big business next year.

This was a coup for Labor as both small and big business associations instantly came out and insisted that the company tax cut should not be derailed.

Of course, the reduction of company tax from 30 to 29 per cent for businesses with revenues up to $2 million is a good start but there are a few problems with the offering. This goes to the heart of how committed Labor is to small business but I am prepared to give them the benefit of the doubt.

The problem with this early company tax cut is that it will only help 22 per cent of the 2.7 million micro businesses out there, as this is the number that operate as companies.

Also the $2 million threshold is inadequate and even the Greens covered themselves in small business glory, for a change, with Bob Brown saying his party would entertain the idea of pushing the starting point for the early tax cut up to $5 million. However, they don’t want any tax cut for big business, which does not make sense with most companies under pressure.

Remember, the Deloitte Australia CFO survey recently showed 84 per cent of the number crunchers were not expecting to hire more staff. And as the RBA is doing precious little to kick-start the economy, this company tax cut is a breath of fresh air in an economy that basically stinks.

Back to Labor’s newfound consideration of small business and this week they wisely announced that a Small Business Commissioner will be appointed to act as an advocate and to provide info to the sector. This is long overdue and though the Opposition claims it’s their policy, if Labor was smart enough to steal it, then it’s progress for a Government which has looked anti-business.

Another pro-business step was the decision of the Financial Services Minister, Bill Shorten, to delay the starting date of the Future of Financial Advice reforms from 1 July this year to the same day next year.

Also, a Small Business Minister, Brendan O’Connor, in Cabinet is groundbreaking and it shows that Labor is trying to get business. However, the handling of David Gonski for the Future Fund shows they have a long way to go but at least they are trying.

If they keep improving, maybe this Government won’t be ‘Gonski’.

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, March 19, 2012

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