Retail sector the loser from Budget’s failure to stimulate
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Tuesday, 29 May, 2001 - 22:00
MEASURES to stimulate the economy, something small business has been crying out for, have been a conspicuous omission from the Federal Budget.
Small business owners, partic-ularly in the retail sector, were hoping for programs to lighten consumer gloom in the market-place, but there are none.
Instead, the Budget is safe, offering a surplus to protect the Government’s economic manage-ment credentials and targeted at marginal groups it feels will be crucial in the forthcoming election.
But traditional Liberal Party heartland, small business, which wanted some recognition of its plight, has been largely ignored.
There was an allocation of $15.4 million – $5 million for a small business incubator program, $8.2 million to improve small business access to Government and the rest to go towards improving small business skills – but these funds are all towards existing programs.
The cutting of business tax from 34 per cent to 30 per cent, a measure announced last year, may provide some economic stimulus but will have little effect on small businesses not operating through a corporate structure.
The introduction of the Simplified Tax System, another measure foreshadowed last year, will make things easier for some small businesses – but only those with a turnover of less than $1 million that operate on a cash accounting basis.
Businesses buying motor vehicles will now be allowed to claim full input tax credits for the purchase.
Car dealers and leasers believe the input tax credit provision offers them a windfall.
BankWest economist Alan Langford said the Government had probably gone as far towards the optimistic side as it realistically could in its economic outlook.
Mr Langford said the Govern-ment’s economic predictions were more reliant on overseas economic conditions this year.
The Government has made no move to change the capital gains tax rate to try and encourage the investment of more foreign money in Australia.
CPA Australia chief executive officer Greg Larsen said this Budget did nothing to reduce small business compliance costs.
“We would have expected to see funds allocated to education for small business to help them cope with business tax change,” Mr Larsen said.
Small business owners, partic-ularly in the retail sector, were hoping for programs to lighten consumer gloom in the market-place, but there are none.
Instead, the Budget is safe, offering a surplus to protect the Government’s economic manage-ment credentials and targeted at marginal groups it feels will be crucial in the forthcoming election.
But traditional Liberal Party heartland, small business, which wanted some recognition of its plight, has been largely ignored.
There was an allocation of $15.4 million – $5 million for a small business incubator program, $8.2 million to improve small business access to Government and the rest to go towards improving small business skills – but these funds are all towards existing programs.
The cutting of business tax from 34 per cent to 30 per cent, a measure announced last year, may provide some economic stimulus but will have little effect on small businesses not operating through a corporate structure.
The introduction of the Simplified Tax System, another measure foreshadowed last year, will make things easier for some small businesses – but only those with a turnover of less than $1 million that operate on a cash accounting basis.
Businesses buying motor vehicles will now be allowed to claim full input tax credits for the purchase.
Car dealers and leasers believe the input tax credit provision offers them a windfall.
BankWest economist Alan Langford said the Government had probably gone as far towards the optimistic side as it realistically could in its economic outlook.
Mr Langford said the Govern-ment’s economic predictions were more reliant on overseas economic conditions this year.
The Government has made no move to change the capital gains tax rate to try and encourage the investment of more foreign money in Australia.
CPA Australia chief executive officer Greg Larsen said this Budget did nothing to reduce small business compliance costs.
“We would have expected to see funds allocated to education for small business to help them cope with business tax change,” Mr Larsen said.