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Call for tax time compo

SMALL businesses are demanding compensation for the increasing compliance burdens The Government is placing on them.

Over the past decade more and more of the information-gathering tasks traditionally carried out by government agencies have been pushed on to businesses.

For big businesses the compliance burden is painful but bearable because of their economies of scale.

Small businesses face a heavier burden because they do not have the economies of scale and usually cannot adjust their price structures to offset the extra cost.

To add insult to injury, the Australian Tax Office is paid to collect the GST for the States.

Such calls for compensation are not new. The WA Retailers Association was screaming for GST compensation early last year.

But growing small business disquiet must be disconcerting to the Federal Government with an election approaching. Growing compliance burdens was one of the factors blamed for the downfall of the Keating Government, in 1996.

The Government has clawed back some of the imposts on small business by simplifying the BAS and rolling back its February petrol excise increase.

It most recently gave food retailers with an annual turnover of between $1 million and $2 million permanent access to some simplified accounting methods.

Businesses in this category will be allowed to keep using the snapshot and analysis of purchases simplified accounting method.

But many small business people feel this is too little too late.

Council of Small Business Organisations of Australia chief executive, Rob Bastian, said the Government was only throwing a small bone to small business.

“I believe the costs of supplying all the information the Government wants has grown to such a point that we have to find a way to stop it and compensate people for it,” Mr Bastian said.

“The reason the compliance burden on business has grown to such a level is because it’s a freebie. But this is still a cost to the taxpayer somehow, somewhere.”

Mr Bastian said there was no mechanism in place to measure how much of a burden government compliance really was on small business. The Australian Bureau of Statistics’ longitudinal surveys of small business ended about the time the GST came in.

“I think to embark on a change of this magnitude without a measuring device alongside it is irresponsible.

“The biggest problems with this is the loss of small business people’s personal time. It’s disappearing down a BAS hole.”

WA Retailers Association CEO Martin Dempsey said small businesses were no longer enamoured with Government talk of cutting red tape.

“It’s just become another platitude to small business,” Mr Dempsey said.

“Small businesses don’t have an increase of business to offset their extra costs against. They’re being asked to do more for less. Now small business is being expected to pick up the shortfall from anything ranging from Y2K to the Asian crisis to the world economic slowdown.

“The Federal Government seems to be much more aware of big business sentiment than small business performance.

“The feedback I’m getting is small business people feel they are paying a cheque for a meal they don’t get to eat.

“I think John Howard has been playing the role of the economies coroner and the autopsy has shown a fair few body parts have been removed or operated on without the patient’s consent.

“There is no way Howard can breathe confidence back into the economy. He’s left it too late.”

Fallon Group partner Tony Ince said small businesses had always been the Government’s unpaid tax collectors.

“These problems date back to the sales tax days. But back then relatively few businesses were affected,” Mr Ince said.

“Now all businesses are having to do it they are realising what the sales businesses had to do.

“This compensation talk is not really helpful. The politicians are aware how tough small businesses are doing it.”

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