Small business roundtable prompts call for $30 million SME tax break

A roundtable hosted by the Council of Small Business of Australia and The Tax Institute has prompted calls for next week’s Budget to include a $30 million tax break for small business.

The roundtable was attended by senior representatives from government and industry, including Assistant Treasurer David Bradbury, shadow minister for small business Bruce Billson, and independent MP Rob Oakeshott.

Following the roundtable, Oakeshott called on the Treasurer to give small business a tax break worth $30 million in next week’s budget.

The Australian reported the independent MP said there was no point delaying the “loss carry back” reform that would allow small companies to get a tax refund if they posted a loss after previously making profits and paying taxes.

Peter Strong, executive director of COSBOA, told SmartCompany the organisation supports Oakeshott’s call for the small business tax break and there was general interest in the proposal at the meeting.

“In this particular stage of the economy, and the cycle we are in, it is an absolutely changed cycle and to manage change you often make a loss, especially if you are purchasing equipment,” Strong says.

“To be able to carry those losses back is good; good for your confidence and good for your cashflow.”

“[Oakeshott] has seen a number of businesses struggling and trading their way through it, and to trade their way through they need some assistance.”

“Loss carry back identifies those in greater need but it does not support bad business behaviour; it helps with planning and change management.”

Strong says the roundtable engendered “good debate” but he warned there were no easy solutions to the issues faced by the small business sector, particularly start-ups.

“There was discussion about the nature of start-ups, as some start-ups are straight into being a company and others start and don’t even know they are running a business, so it ends up being a business but they are not even aware,” he says.

“It makes a difference to their structures as they will turn around one day and realise that they need an ABN and then they go and talk to someone and they have actually already being running a business for awhile.”

“Other people start off straightaway as a business, but end up in a structure that suits them in the early year of the business, but then find it does not suit them.”

“If we come up with a definition for small business, people might be able to be more flexible about this without cost implications.”

Strong says there is renewed interest by government in small business as “people have realised it has just gone too far”.

“We need to take red tape away, not just in tax but also in workplace relations,” he says.

“The system really has been designed for paymasters, not small business.”

Strong says the Fair Work Ombudsman found 26% of retailers were not compliant with the Fair Work Act, however only 1.8% of those with a paymaster were non-compliant.

“This shows that the Fair Work Act is the problem, not the retailers,” Strong says.

Strong says COSBOA was not disappointed with a lack of concrete results stemming from the roundtable as the organisation was not expecting any results, instead “we got issues out on the table that have not been out there before.”

This story first appeared on SmartCompany.