Only one day remains.
Come Saturday morning, the state of Australian business could be very different. And with good reason – this election is undoubtedly one of the more fascinating in recent history. Not only do we have a prime minister recently reinstated after a three year absence, but for the first time in years, small business has become a key focus.
Which means no matter what, SMEs are coming out of this election with at least something to show for it.
But there are still plenty of differences between the two parties.
While small business will no longer be the paymaster for either parental leave scheme, there’s plenty of promise either way. The Coalition has pledged for small business experience on various boards including Fair Work, while Labor has offered the ability to report GST yearly, rather than quarterly.
The Coalition has pledged a company tax cut of 1.5% – but has also scrapped $5 billion worth of tax concessions.
So with four days to go, there’s still plenty to decide. We’ve put together a last-minute guide to each party and their policies to help you weigh up your decision.
The government hasn’t pledged too much in the way of taxes, although there has been some relief thrown to small business in certain areas.
Labor’s main promise has been to reduce the company tax in the Northern Territory, creating a special economic zone. (A suggestion lifted from billionaire Gina Rinehart herself.)
The cut would bring the company tax rate to 20%.
For all businesses, Labor has pledged an increase in the instant asset write-off threshold to a massive $10,000 from its current $6,500 – a significant boost for any company buying plant and equipment.
Meanwhile, the carbon tax is also set to be eliminated next year and replaced with a floating price, while Kevin Rudd has promised there will be no rise in the GST.
Perhaps what’s more important are the cuts – Labor has scrapped a significant part of the Fringe Benefits Tax relating to salary sacrificing, which has wreaked havoc on car leasing companies.
The Coalition’s big promise is the 1.5% cut to the company tax rate, which Abbott has pledged. The promise also has a second effect – winning over small business. Under the Coalition’s paid parental leave plan, big businesses would suffer a 1.5% levy on profits.
Now, the 1.5% reduction means those larger businesses won’t pay any more tax than they currently do.
Tony Abbott has also said while the Coalition won’t raise the GST, the tax will still be part of an overall review. Anything can happen.
It’s also worth pointing out conservative states have started lobbying for reducing the low-value threshold – something which Labor has not moved to change. If the Coalition wins power, this is almost certainly an issue that will rear its head in the first six months of government.
However, there are some caveats. The Coalition will scrap the increased asset write-off threshold to its original $5,000, and get rid of the rapid depreciation rules as well.
So far, Labor has promised some changes to red tape that have been called on by small business for years.
Firstly, businesses with fewer than 20 employees will no longer act as paymasters for the paid parental leave scheme. Those payments will be handled by the government.
And as a bonus, businesses with up to 100 employees can access the Superannuation Clearing House, which makes super payments on behalf of companies, freeing up some time.
The bigger announcement is that Labor will no longer require businesses to register a Business Activity Statement every quarter – the requirement will change to just one a year.
The Coalition has made red tape a big part of its pledge to small business. Tony Abbott has set a goal of saving $1 billion every year by eliminating unnecessary expenses, and has even said a Coalition would set aside two sitting days for getting rid of regulation.
The paymaster requirement for parental leave would be erased under a Coalition, while environmental regulations have also been targeted by erasing duplicated laws between the states and federal government.
Public servants will have their bonuses tied to deregulation under the Coalition, each department will be required to create a unit for getting rid of red tape, while the Office of Prime Minister and Cabinet will oversee deregulation duties.
Labor’s parental leave policy remains exactly the same as it was before the election – the primary carer will receive 18 weeks of pay at the national minimum wage. Superannuation is not included.
The only difference? Small business gets some reprieve – companies with fewer than 20 employees will no longer have to administer the payments. Instead, they’ll be completed through the government.
The Coalition’s parental leave system is more expensive, but ultimately more generous. Parents will receive 26 weeks at their own pay rate, along with superannuation.
However, unlike Labor, the Coalition won’t make businesses of any size act as paymasters. Instead, every payment will be made through the government.
Labor hasn’t said much about industrial relations during the election, and that’s mostly because it feels the Fair Work system is working quite well. As such, there won’t be many changes if it wins government.
However, the government has said it will continue to implement changes recommended by last year’s Fair Work Review.
The Coalition has said it will keep the Fair Work system in place, although there will be some changes. Unions will have fewer right-of-entry allowances, while the Australian Building and Construction Commission will be reinstated fully.
Individual Flexibility Agreements will also receive some changes, with the Coalition set to widen conditions under which IFAs can be negotiated.
There will be some other changes including creating an appeal division within Fair Work, allowing the Fair Work Ombudsman to consult small businesses as well as employees, and only allowing the FWC to hear bullying claims after they have been investigated by other groups.
Skills and education:
Education has played a big part in this year’s election campaign.
Labor has proposed a $15 billion education model to be introduced from 2014, $2.5 billion for new trade training centres, along with schoolkids bonus payments of $420 for primary students and $820 for secondary students.
A new Step into Skills program has already been announced to help disadvantaged youths, to be funded through TAFEs.
A huge part of the Coalition’s plan is a new HECS-style apprenticeship support scheme, which will cost $80 million. Apprentices can borrow $20,000 under the scheme for tools and equipment, to be distributed across four years. Finishing the training triggers a discount.
Other education policies include creating an infrastructure fund for schools when the budget is back in surplus, along with commissioning the Productivity Commission to conduct a review of the child care system.
A significant portion of the government’s manufacturing policy has focused on cars, and there’s little wonder why – the closure of Ford plants in Victoria has struck a massive blow to the industry.
Labor has already promised a further $500 million until 2020, and $300 million a year beyond that. Kevin Rudd went so far to call this election a “referendum on the future of the car industry”.
Labor has promised some more policies, including a mandate on companies with projects worth more than $2 billion to include Australian businesses – but most of the manufacturing focus has been squarely placed on the car industry.
The Coalition has been far less interested in doing business with the car industry. However, there isn’t much else in there.
Exporters will welcome $50 million in grants, and $50 million for transitional assistance for areas moving out of manufacturing.
There is some movement on the big business front, with the Coalition promising to reverse cuts to R&D grants for larger businesses.
The government’s policy on digital is exactly where it’s been the past few years – the National Broadband Network.
Throughout the election, Labor has stayed consistent with its message to deliver the NBN. While the project has certainly fallen behind schedule, it’s still essentially the same package that has been promised for years with no changes.
The Coalition changed its policy on the NBN earlier this year. Instead of simply stopping the project in its tracks, the NBN under the Coalition would continue – but with one major change.
The Coalition NBN will no longer be fibre-to-the-home. Instead, it will be fibre-to-the-node, with copper connections to each home. Individuals can connect their homes to the node with fibre, but it will cost them – to the tune of several thousand dollars.