Tax reform or more norm?
DISAPPOINTED was Warwick livestock transport operator Ross Fraser’s reaction to the latest taxation reform out of Canberra.
The locally based owner of Fraser’s Livestock welcomed the reduction in company tax down from 30 per cent to 28 per cent and described the rise in the compulsory superannuation levy as “inevitable”.
However, he said it was disappointing the Federal Government had not adopted recommendations in the Henry Tax Review to review the taxes and charges to road users.
“What our industry needs is reform in this area and assurances the money we pay as road users goes back into roads,” Mr Fraser said.
“So it is disappointing the government has decided not to adopt, at this stage, the package outlined as part of the Henry review.”
Meanwhile Warwick Chamber of Commerce president John Randall has questioned whether the region’s 2500 businesses will be better off under the tax reform strategies.
Mr Randall said like most things coming out of Canberra in an election year, the long-awaited taxation reform for small business seemed to be all “smoke and mirrors”.
“The Chamber was really pleased for its members when it was announced over the weekend that company tax will be reduced,” he said.
“That was certainly a step in the right direction, but then it was announced that the compulsory superannuation levy would be increased.
“Given some of our biggest businesses in Warwick are labour-intensive, a three per cent increase in wages will more than counteract any reduction in company tax for them.”
Mr Randall conceded it wasn’t all bad news for local business taxation-wise; there were concessions for claiming immediate tax deductions for the purchase of assets.
“However at the end of the day, business has to be profitable to survive.”
Warwick Real Estate principal Neil Carney was another who questioned whether the latest reform would make any “real” difference to business.
“The Henry Tax Review is certainly not the reform we thought it was going to be,” Mr Carney said.
“A company tax cut sounds great until you have to pay for the increase in superannuation.
“So what you are saving on one hand, you are in effect handing out with the other.
“It’s very disappointing when the government could have made changes that really improved and simplified the entire taxation system.
“Instead it seems like the resource industry is going to have to pay severely, while businesses get more of the same.”
- Company tax cut from 30per cent to 28 per cent
- Superannuation levy up from 9 per cent to 12 per cent
- Major changes to be introduced gradually from 2013