Happy New Year! Like many business owners and managers around the country, SmartCompany is back on deck today and looking forward to an exciting, successful and prosperous year ahead.
And happily, it seems certain that 2010 will be a year when small business gets a lot more attention than is has done in the last few. And there’s a very good reason for that – we’re almost certain to have a Federal election before the year is through.
On the front of today’s The Australian newspaper, the Opposition’s money men, Shadow Treasurer Joe Hockey and Shadow Finance Minster Barnaby Joyce, have already started their pitch for the SME vote by promising to put tax cuts for small business first.
“If there’s a choice between tax cuts for big business and tax cuts for small business, we will always put the interests of small to medium business first,” Hockey told the paper.
“They are a massive employer: the retailers and tourism industry and farmers. If there are to be business tax cuts, they must be aimed at small business and not at the big end of town.”
No arguments here, Joe.
Conditions still remain tight for many SMEs and while many have expansion plans coming into 2010, capital to put those plans into action isn’t exactly easy to find. Cutting tax would free up cashflow and allow SMEs to get the recovery moving even quicker.
The problem, as Hockey and Joyce are apparently wrestling with, is how to do it.
Business groups are pushing for the Government’s review of taxation (being undertaken by Treasury Secretary Ken Henry) to cut the corporate tax rate, which is currently 30%.
But some, including the Australian Chamber of Commerce and Industry and Joyce, have pointed out that many SMEs don’t have corporate tax structures and for them, cutting personal tax rates makes more sense.
There are arguments both ways, of course and your opinion will depend very much on the size of your business and your ambitions going forward.
If you are a micro business employing no one or only a few workers, the personal tax cuts might mean more. If you are a rapidly growing small company heading towards medium or even large size, changing the company tax rate might make more sense.
What’s your opinion? We’d love to hear from you about which way this debate should go, so be sure to jump on and comment below.
Oh, and by the way, Joe and Tony and Kevin and Wayne… a promise to work with the states to abolish payroll tax might be an even bigger vote winner.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
