Small business is counting on the full Enterprise Tax Plan being passed
By a margin of six-to-one, Australian small business owners overwhelmingly support a reduction in company tax rate for all businesses, to a recent MYOB survey.
Small businesses support a competitive tax rate for all businesses because they understand that the business community is an ecosystem, and if big business isn’t investing there is simply less opportunity for small businesses.
Peter Strong, CEO of the Council of Small Business Organisations of Australia, told reporters in October:"That tax cut needs to be extended to all businesses... If we don’t do it, then the tax cut for small business and medium business will eventually become meaningless because if big business isn’t investing, if big business isn’t building things and creating new opportunities, then that means small business as a group will find less opportunities."
The Enterprise Tax Plan isn’t just about big business or small business, it’s about growing the economy, creating jobs and boosting wage growth.
Activity between businesses – small, medium and big – is worth around $555 billion a year.
A survey of small and medium enterprises by MYOB shows a majority believe lowering the company tax rate for all of Australia’s businesses is important for the success of their own business.
The parliament has passed legislation to reduce the company tax rate to 25% for businesses with a turnover of up to $50 million but has retained a 30% tax rate for those with a turnover above this level. This is not profit, but turnover.
Keeping this two-tier system will severely limit the overall economic benefits that would flow from fully delivering the tax cut and create distortions. It will become a disincentive for companies to grow.
Larger businesses play a crucial role supporting smaller businesses as buyers and suppliers.
Small business needs big business to be successful – and vice versa.
Extending the company tax cut to bigger companies will mean they can grow and generate more business for smaller ones and help create the jobs of the future.