Abbott to keep Labor cuts, defer super guarantee contribution and elevate small business

A Coalition government will delay increases to the superannuation guarantee for two years and small business will be a cabinet portfolio within the Treasury department.

In last night’s budget-in-reply speech, Opposition Leader Tony Abbott said the Coalition was likely to support the $43 billion in tax and spending cuts contained in Tuesday’s budget.

He also repeated his previous commitments to abolishing the carbon tax and introducing a paid parental leave scheme.

Abbott described many of the measures in the budget, such as abolishing the baby bonus, as “objectionable”, but justified keeping the cuts and cost savings on the basis of a “budget emergency”, which he said was a result of “poor management” by the government.

In his speech, the opposition leader said a Coalition government would set up a “root and branch” review of competition policy aimed at ensuring that small business gets a fair go and that it would cut red tape.

“We will cut red tape costs by at least $1 billion a year to give small business a much needed break, and we’ll have parliamentary days dedicated to repealing laws, not passing them,” Abbott said.

Abbott’s budget-in-reply was welcomed by the business community.

Paul Drum, head of policy at CPA Australia, told SmartCompany that while Abbott’s speech did not reveal a lot, the deferral of the superannuation guarantee contribution was good news for small business.

“Deferring putting up the superannuation guarantee contribution for a couple of years will be very welcome by most small business, as in most cases it is an impost they are looking down the barrel at,” he says.

“[CPA Australia] are in favour of increasing the superannuation guarantee contribution when affordable, but given the tough circumstances over the past five years and the reduced profit margins that businesses are facing, we think it will be a relief and an appropriate measure to delay this.”

Drum says he also welcomed the commitment in the speech that a Coalition government would produce a comprehensive white paper on tax reform in two years.

“Revisiting the tax white paper is appropriate and any such root and branch review should include taxes on consumption,” he says.

The Australian Chamber of Commerce and Industry also backed Abbott’s focus on small business in his speech.

“The combination of the new announcement to defer for two years the hikes in the compulsory superannuation levy, the intended abolition of the carbon tax, and the planned root and branch review of competition policy show a welcome sensitivity to the plight of small business and the role they can play in strengthening our economy,” Peter Anderson, chief executive of ACCI said in a statement.

“Small employers, buffeted by rising costs and declining profitability, can only keep funding the retirement incomes of staff if they are strong and profitable”.

Anderson said the budget-in-reply speech contrasted with a “disappointing week” with little for small business in either the budget or the Coalition’s industrial relations policy.

“The announcement of a superannuation levy deferral if elected will lift hope that small business won’t be ignored by our political leaders,” he said.

“For our economy’s sake, two million small businesses employing seven million people are too big to ignore.”