NO INTEREST RATE RELIEF FOR SMALL BUSINESS

The Joondalup Business Association has voiced its disappointment that the major banks have not seen fit, yet again, to pass on significant reductions in official interest rates for small business loans.

 

JBA President Russell Poliwka said that according to Channel Seven’s David Koch most of yesterday’s Reserve Bank 1% rate reduction would be passed on to the home loan market but there is no relief for the small business proprietor.

 

“Small business is, and remains, the ‘engine room’ of a successful economy and it is incumbent on the authorities to ensure that support, in the form of reasonable borrowing rates, is there to assist this most important sector,” Mr Poliwka said.

 

 “The economic pundits are forecasting a huge downturn in employment and the first casualties are going to occur in the highest employing sector - small business.” Mr Poliwka said.

 

“Couple this with Payroll Tax, Stamp Duty and Land Tax and it becomes obvious that small business will continue to take the brunt of the tax burden imposed on the community,” he said.

 

“Stamp duty particularly has a big impact not only on small business but the economy as a whole. The inaugural BankWest Residential Stamp Duty Report shows that stamp duty on the typical home has soared 59 per cent over the past five years with annual stamp duty revenues having increased 77 per cent over the same period. (WA Business News, Dec ‘08).

 

“We call on the banks and regulatory authorities to extend their largesse on interest rate relief to the small business operators which are currently experiencing a margin differential of some three percentage points between their business loans and home loans,” Mr Poliwka said.