SMALL BUSINESS STRANGLED BY GOVERNMENT TAX GRAB

The Joondalup Business Association says that Land Tax and Payroll Tax are making small business operators unviable and is reducing their employment capacity.

 

JBA President Russell Poliwka said that Land tax is a non-productive cash cow for State Government and penalizes land owners that have had the initiative to invest in property and enable small businesses to invest in their businesses rather than tie up capital in the property and that recently published increases of 400 percent are totally unacceptable.

 

“The new State Treasurer Troy Buswell needs to show some leadership on this issue rather than carrying on the bureaucratic standard recommendation to hit small business because the sector has not been militantly aggressive enough in its criticism,” he said.

 

“Land tax needs a complete overhaul and under no circumstances should the increase in any year be more than CPI or a fixed cap of around 3%.Government at all levels are telling people currently to spend and avoid the expected recession, yet they are slowly killing off small business operations and their ability to employ and increase the dollar velocity in the Economy.

 

“If Governments don’t address this issue as a matter of urgency the only people they will ultimately be able to tax will be the Public Sector, themselves and the Multi-Nationals that already have effective tax minimization strategies in place,” he said.

 

“The Payroll Tax threshold has not even kept up with CPI over the last 10 years. This disincentive tax, if not completely abolished, should have a starting threshold of $2 million dollars and a sliding scale that enables small to medium enterprises to grow and become sustainable. A tax on business for employing people is hardly justifiable in any market yet alone the current one.

 

“The Federal Governments hunger for revenue and the application of a brutal Capital Gains tax again removes spending capacity from the private sector and individuals. Overtaxing simply reduces enterprise and motivation. Lower and broader based taxes would achieve much the same result with a lot less complicated red tape,” Mr Poliwka said.

 

“Capital Gains Tax needs a rigorous examination and reassessment of its impact on the market place - less investment in residential housing means a greater requirement on the public sector to build rental accommodation… and in non-commercial terms – if you want to stop fertilizing the welfare growth in Australia then there is a need to change the culture of welfare mentality that prevails and is growing - it’s easier to be a dole bludger than a productive employee.

 

“The Government can learn from other countries on how to apply a Capital Gains Tax in a more equitable manner. A system where an asset, other than the prime residence, is taxed on 100% if held under 12 months; 50% if held for 1-2 years; 25% for 2-3 years and then exempt after 3 years would encourage people to build and invest in stocks without the speculation currently prevailing.

 

“In recent times of hyper growth we had to import labourers from overseas yet were paying healthy/capable persons to sit on the Social Service Train. A country’s wealth in the final analysis comes down to its productive ability be it resources, intelligence or other produce. Large three tier government is not the effective economic solution. The history and reason for three disjointed tiers cannot be sustained if Australia is to be a clever country. The reason for slow change is due to the vested interests of those that govern - not those who are governed,” Mr Poliwka concluded.