It is somewhat heartening to note that in spite of the ructions in Canberra our new Prime Minister in his address yesterday signalled out small to medium business as the engine room to growth.
The new Prime Minister has indicated that “a new and exciting tax policy for small and medium sized business” was being formed.
This will come under the direction of Minister Michaelia Cash and whilst we await details there are indications that the legislated tax cut to 25% will be brought forward and that further consideration may be given to a reduction to 22.5% and or a possible 20%.
Given that there are some 360,000 taxpaying small businesses in Australia there is a strong argument that reducing the tax rate will encourage additional employment and investment.
In addition small business accounts for approximately 45% of the 12 million strong Australian workforce so if while there is a cost or drop in taxation receipts from small business there is the potential this may be offset from PAYG receipts arising from increased employment.
We share this view that any tax cuts for small to medium business will have a stimulatory effect and for us in WA when combined with the growth in GDP numbers, (as outlined yesterday) creates the environment for strong growth and profitability.
Plan ahead and plan for growth!