Australian Businesses Welcome Beazley's GST Rollback Plan

by Mary Swire, Tax-News.com, Hong Kong

29 October 2001

Although Australian small businesses are the focus of the attentions of both the Coalition government and the opposition Labor party in the run-up to the general election, the sector appears to be distinctly underwhelmed by the efforts of both sides.

In a survey conducted in August, 63% of small business owners indicated that before the 1998 election, they would have voted for the coalition, compared with 51% in the current contest. However, this news is not cause for celebration for the Labor party, as the same survey revealed that their percentage of small business votes had dropped from 16% in 1998 to around 15% this year.

The proportion of undecided voters in this category has increased from 9% to 20%, and despite the criticism that John Howard's government has come under for the tax reforms it has put in place, the current thinking among small business owners seems to be 'better the devil you know'.

Some, in particular 'micro-businesses' with less than 5 employees, are excited by the prospect of Kim Beazley's GST rollback scheme, but others feel that having put the Goods and Services Tax mechanisms in place, they would paradoxically be complicating things by simplifying. Under Mr Beazley's plans, businesses with an annual turnover of less than $2 million would be permitted to pay a quarterly installment based on a ratio supplied by the ATO, thus doing away with the need for quarterly or annual reconciliations. Ross Chiswell, MD of new media company, Integrity Data Systems, falls into the latter camp: 'We have put in the detailed accounting system and now Labor wants us to move to "let's guess",' he protested.

Federal Small Business Minister Ian Macfarlane admits that the past few years have not been easy for the sector, and that there have been problems with the government's tax reform initiatives, but promises that the worst is over: 'We have done the hard yards with tax reform, and small business has done the hard yards with us,' he said. 'Line up behind Labor (and) there are more hard yards. Line up behind us and there is stability and a good track record of economic management.'

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