I have attempted here to provide a brief summary of the issues that caught my attention at this year’s summit.
While a large part of the Prime Minister's address was a repeat of his regular talking points there were a few specific comments made for a small business audience:
• 35% of GDP is due to small business
• The 50% tax break for capital investment by small business extended to the end of this year
• Reduction of PAYG instalment in 2009/10
• Small business online program announced in the budget to help businesses establish an online presence with the national broadband program
• Tax credit of 45% on research and development for small business
• A small business banking complaints clearing house for businesses that believe they have been unreasonably denied credit
• Announcing the detailed implementation framework for the Small Business Advisory Committee
• All federal government contracts up to $1 million with small business are subject to the “on-time payment guarantee”. That means accounts will be paid within 30 days, otherwise small businesses will have the right to charge penalty interest.
Mr Richard Brooks, Chairman Council of Small Business of Australia (COSBOA)
• Impact of the Fairwork rationalisation of awards increasing substantially rates of pay, particularly in the hospitality sector with little recognition that Australian no longer just works 9-5 Monday to Friday.
• The lack of balance in bank contracts
• Expected increase in ASIC fees when it takes over regulation of business names
• Training incentives for employees don’t apply to business owners
• The need to pay a $900 upgrade fee each year for accounting software because the ATO keeps changing their forms
Mr Malcolm Turnbull, MP Opposition Leader
• The small business minister is in the shadow cabinet, and would be in the cabinet if they were elected (different to both the Rudd and Howard cabinets). It is in cabinet where the decisions are all made and currently small business, in spite of its 35% contribution to GDP is unrepresented.
• Improved incentives for apprentices
• A tax loss carry back (we currently have the ability to carry forward losses, but not to claim a rebate against past tax payments.)
• Revision of insolvency laws to offer the equivalent of the US Chapter 11 protections to allow businesses to restructure and avoiding a fire sale of assets where creditors get very little.
• Tried to introduce an amendment into the award modernisation legislation to ensure no additional cost would be imposed on employers, but this was rejected. Job losses are expected.
Mr Michael D’Ascenzo, Commissioner of Taxation, ATO
• 12 months interest free payment arrangements for businesses with less than $2m turnover
• Ability to defer payment of activity statement liabilities where there are cashflow timing issues
• Maintaining a level playing field by identifying those avoiding their obligations. They now use industry benchmarks to find businesses in high risk areas who seek an unfair competitive advantage.
• Undertook 8000 audits of those in the cash economy and are developing more benchmarks and doing more audits this year.
Dr Craig Emerson, Minister Small Business
• Retail sales for the last quarter were up 4.8%, 5.6% for small retailers
• Saw the stimulus package as a ‘tradies package’
• PAYG has been reduced by 20% and there will only be a 2% escalation in 09/10 rather than the usual 9%
• Red tape reduction in 27 areas- three examples- national trade licensing and a national system for business name registration, standard and simplified business reporting online.
• ETS will only directly affect 1000 big emitters, but there would be flow on costs to everyone else
• Awards have been simplified from 1600 to 18, and there only have been significant issues in three which are currently under discussion
Damian Karmelich, Director Marketing and Corporate Affairs, Dun & Bradstreet
• Perceives much greater risks in China with high levels on unemployment – risking political instability. There is an unwritten compact in China which forgives many of the governments shortcomings as long as it delivers economic improvements to the population
• Expects Australian unemployment to exceed 8%
• Businesses are clearing out inventory and not restocking
• Expects a 20% increase in business failures, and has assessed a 130,000 increase in the risk of failure in the last 12 months along with a 150,000 risk increase in paying bills late from their database of 2 million businesses
• The average days for payment is now 58 , with big businesses delaying to 65. Late payments for big businesses ultimately cause delays in small business payments
• There has been a 49% increase in debts being referred for collection on 2008.
Over to You. What do You Think? Post Your Comments Below.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.
The Australian Small Business Blog