Less Red Tape, Simpler Tax Rules & Tony Abbott Wins Le Tour De France
The SMH reports today that Australian firms have fewer taxes and less red tape at the top of their wish list for the soon-to-be released Henry tax review, a survey says.
We all have dreams. The federal opposition leader would love to get a gig with Lance Armstrong’s Team Radio Shack in the upcoming Tour De France…but he won’t.
The PricewaterhouseCoopers Private Business Barometer said 78 per cent of the 750 small and medium enterprises surveyed wanted fewer business taxes.
What did the other 22% want? Let me guess, more business taxes?
Also on the list were requests to improve the write-off of capital spending (61 per cent), reconcile state taxes (57 per cent), and for simpler tax rules for small businesses (54 per cent).
“Complying with up to eight different state and territory regimes is time consuming and resource intensive for private businesses,” PricewaterhouseCoopers partner Gregory Will said.
Sure is Greg. Look at California. The Gross State Product (GSP) is nearly $2 Trillion. California’s GDP is larger than all but eight countries in the world…Australia ain’t one of the eight! And, SNAP! They have a pretty flat taxation system. But, I’ll let Greg get on with it.
“Simplification of the tax system would give back valuable time and resources to focus on activities that will directly impact the business bottom line.”
But what would all of accountants do? They might have to diversify their skills base…be a bit proactive…start offering financial planning and other value-adds.
“Competing on wages alone is not enough for private companies as they will not be able to absorb pay increases like big business…they must become more creative when attracting more talent and promoting the benefits of working for a private business.” Mr Will said.
I’d sure like to know what small businesses are going to compete with instead of money. Flexible working hours? This well’s almost dry. Moreover, wages are more dependent on the availability of jobs within an industry.
Operators in the construction industry, for example, endure lumpy revenue streams. Holding key employees is tough. We were recently approached by a construction group on the central coast with a wages bill of over $90K a week. Don’t even ask what these guys think about payroll tax. Anyway, they now actually fund their wages bill using the accounts receivables of one client. It’s certainly creative.
So, we wait now for The Henry Report on May 2. I’m expecting minor concessions, rather than deep structural change, which really is a pity. Companies that have survived the GFC could use a break, and not just from the government. The banks could do their part by reducing interest rates on loans to SMEs…but they probably won’t!
Most of these reports are hyperbole and rhetoric. The underlying key is less government, probably at state level, and a massive overhaul of our taxation system. Both scenarios are unlikely, but until then it’s Band-Aids and bull#@$%