Aussie Businesses Say Growth Lies in Tax Cuts

canstockphoto0550848A Western Australia lobby group has embraced comments from the Premier that suggest tax relief measures will be adopted if he is re-elected. The Chamber for Commerce and Industry has asked the state government to lift the tax threshold from $750,000 to $1.5 million, with the Premier saying details about the structure of the relief will be announced as his campaign unfolds.

The Chief Executive of the CCI says that the new measures are intended to provide relief for small businesses especially which are struggling under volatile local and international forces. He added that the next authority figure in Western Australia needs to be able to meet small business demands.

As far as politics are concerned citizens and small businesses are hoping that the threshold will be lifted so that more people can be employed and businesses can grow. The CCI CEO says the tax relief measures are affordable for the government, with the last decade seeing tax collections increase from $900 million to $3.3 billion. He claims that small businesses are being discriminated against for hiring Western Australian workers in order to expand their businesses. In 2012 the state budget incorporated a rebate for approximately 7000 Western Australia businesses.

In response the government has said it is limited by GST cuts and the only way to give businesses what they need is to drop the tax threshold. He said payroll tax elimination would be ideal but it was unrealistic.

The mining sector has also come out in full force over taxation issues in the sector, following the decline in government’s resource taxes, dropping them well below anticipated figures. The Minerals Council of Australia, representing most of the country’s miners, has unveiled a new advertising campaign about the Minerals Resource Rent Tax in response to two major multinational players that have acquired credits of $1.7 billion and which could be used to counteract the Minerals Resource Rent Tax.

The council has taken the opportunity to highlight the fact that the tax is for top-up purposes and should be reviewed as separate to company royalties and taxes. The council claimed that the mining industry was paying its share of taxes, a figure amounting to over $130 billion since 2000. The industry body has been very vocal about the “super profits” tax imposed on the mining industry which was announced in 2010, and which ended Kevin Rudd’s tenure as Prime Minister. Following Julia Gillard’s appointment, substantial changes to the tax rate have been made and it now only includes coal and iron ore.

Six months into its implementation though, the government has only claimed $126 million of the anticipated $2 billion for the first year.

In defence the government claims revenues have been affected by the drop in commodity prices but the structure of the tax has come under scrutiny. Newspaper reports have already isolated three major mining companies that are exempt from tax, alluding to a loophole in the law which gives preference to the country’s largest mining companies.

The call for government intervention comes after a period of stagnated growth for the economy in 2012 while the government was focused on returning the domestic budget to surplus. The last year saw contractions in a number of key industries and among small businesses, a move to serviced offices from worldwide provider that offer fully-inclusive packages and provide full spectrum business services in order to remain competitive. A number of major companies have also relocated to more sophisticated business centres where all of their professional needs are taken care of, in an effort to streamline operations and operate on more economical frameworks that still ensure access to top class facilities, essential technology and prime locations in central business areas.