Australia is “open for business” according to Abbott, but what does a Coalition win mean for the country’s business owners?
Tony Abbott may have announced that Australia is “open for business” under a new Coalition government, but what does the win mean for the country’s business owners?
Here’s a look at some of the major Coalition policies that will affect small business.
Regulation:
Red tape has been a bane of small business owners and mortgage brokers in recent times, with industry bodies such as the MFAA and COSBOA lobbying aggressively to cut the hoops business owners are increasingly being asked to jump through – and it seems they may have gotten their wish.
A desire to reduce regulation is a prominent feature in the Coalition’s policy, with Tony Abbott promising to cut $1billion a year in red tape and even introducing two Parliamentary sitting days for the repeal of legislation each year.
“Small businesses don’t have compliance departments – and nor should they. We need common sense to prevail again,” says the Coalition's policy statement.
“We recognise that all modern economies need regulation, but excessive regulation results in more costs than benefits and discourages innovation, investment and job creation.”
The Coalition will also allow businesses to remit compulsory superannuation payments directly to the ATO at the same time as they remit their PAYG payments, and the Prime Minister and Cabinet will take responsibility for deregulation, rather than the Department of Finance.
Abbott’s government has also pledged to create an entire dedicated unit in each department that is focussed on red tape reduction, while public servants will have their bonuses tied to reducing regulation.
Tax:
Tax is a big deal for small business, and the 1.5% cut to the company tax rate promised by Abbott should make some difference to bottom lines.
Plans to axe the much-begrudged carbon tax have also been welcomed by business owners, with cost savings expected to flow-on to a number of expenses.
“Small business cannot pass on the costs of a carbon tax to customers as easily as big business. Under the carbon tax small business has had to absorb, at a minimum , a 10 per cent hike in electricity bills and a 9 per cent hike in gas bills in the first year alone."
On the other hand, it has also promised to cut a $6500 instant asset write-off for businesses with turnover less than $2m, as well as axing a tax-loss carry-forward scheme which allows for businesses to claim losses up to $1m against tax paid in the last two years.
The Coalition has hinted towards further tax cuts in future, however, with a statement claiming the Productivity Commission has predicted reducing red tape could generate up to $12 billion per year in extra GDP.
“By generating greater GDP, we improve national wealth meaning more jobs and greater capacity for government to provide tax cuts, invest in infrastructure and improve services.”
Government representation:
In a recent assessment of G20 countries, Australia came in the bottom tier for co-ordinated support for small business, despite a promsing result overall. Here's what the Coalition says it will do to target the weak spot:
The Coalition has promised a small business cabinet portfolio within the Treasury, as well as promising a “strong small business voice” on the Board of Taxation, the ACCC and Fair Work Australia.
Abbott’s government has stated that the the Small Business and Family Enterprise Ombudsman “will be a Commonwealth-wide advocate for smaller enterprises, a single entry-point agency to access Federal small business programmes and support, a contributor to making Commonwealth laws and regulations more small business friendly and a “concierge” for dispute resolution”, and will contribute $6m to maintaining this lofty job description.
It has also pledged to develop a dedicated small business helpline, a “plain-English” guide to employing new workers and a Small Business Wages App providing real-time information for business owners.
Another biggie, the government has said all Commonwealth departments and agencies will be forced to pay interest on outstanding bills owed to small businesses.
The effects of these promises are still yet to be seen, but amongst the broker population the outlook is positive, with the leaders of both the MFAA and FBAA claiming the outcome is 'good news' for brokers.
Melissa Gielnik, director of Smart Lending and number 17 on MPA's Top 100 Brokers list, says she expects "good things to happen" under the Coalition government.
"Whether you like it or not under a Liberal government big business always does well, and when big businesses do well it filters down.
"The housing market is very much dependent on government, but all of this year we've had no confidence whatsoever. If you look at the results it was more or less a landslide, now we've got a new government and I'm expecting good things to happen."
