Clive Palmer revealed the Palmer United Party’s small business policies in his response to the budget yesterday.
The mining mogul turned politician hosted a lunch for supporters and media at Canberra’s Hyatt Hotel where he was serenaded by a band playing Hey True Blue before taking to the stage to criticise a budget he says is a “conjurer’s trick” and “devoid of ideas”.
“Business has lost confidence, small business has lost confidence, demand has spiralled down and our economy has suffered,” he says.
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In a press conference following his speech, Palmer told SmartCompany Treasurer Joe Hockey’s “big claim for stimulation” in cutting company tax for small business by 1.5% was of limited benefit.
“Most small businesses in Australia are not making a profit, you only worry about taxation and things like that if you are making a profit,” he says.
“Most small businesses don’t have any money, they are just struggling to pay provisional tax ahead of them making the money this year.”
Palmer was also critical of the government’s promised tax write-off for small businesses which make purchases of up to $20,000.
“[Small businesses] can’t afford a $20,000 benefit which just gives them a write-off if one day they do make money,” he says.
“The stimulation is really at the wrong end of the chain, it should be really at the demand end. You should be making more money available for people so they can buy more things and they can get jobs.”
Palmer’s alternative proposal is to move the provisional date of tax reporting for businesses.
“At the moment companies report and pay their tax in advance,” he says.
“If they had to pay at the end of the year when they earned the money they’d effectively have $70 billion in their hands during the year to spend and employ people”.
Palmer estimates that during this time GST would be paid on the money every time it changes hands.
“So you’d have $7 billion each time it went round, you’d probably end up, I think, with another $28 billion in government coffers,” he says.
“By releasing that money to those people, which is their money anyway, you create more demand.”
Palmer’s other policy he says will benefit small business is to institute the equivalent of the United States Chapter 11 bankruptcy proceedings in Australia.
“We need to have a Chapter 11 like they have in the United States, where companies fail, the business continues so that the people and the families keep their jobs,” he says.
Palmer says 85% of companies that go into Chapter 11 in the United States emerge as viable dynamic enterprises.
“We can do it, there are so many small businesses in this country which go broke in their second year because they can’t provide provisional advice or they might not have the right business advice, but the idea is what we have to cling to,” he says.
“We need to make sure [SMEs] can make a profit, they can survive because they are the powerhouse of the nation,” he says.
Palmer says he is going to spend even more money contesting the next election than the $26 million he spent on the PUP last election.
“I think you should spend more, you should look at expansion, not contraction,” he says.