Economy

Budget 2014: Company tax cut is number one on business wish list for this year’s budget

Engel Schmidl /

Businesses want to see the federal government hand down a federal budget that reduces company tax, increases spending on infrastructure and balances the budget by 2019.

An Australian Industry Group survey of 364 businesses finds 70% rank reduced company tax as one of their top priorities.

This was closely followed by increasing spending on infrastructure (68%), while 57% said bringing the balancing the budget over the next five years was a priority. 

These preferences were followed by 39% who want increased spending on training and apprentices and 39% who want to raise tax incentives for industry research and development, while 28% want to bring the budget into balance within two years.

Ai Group public policy director Peter Burn told SmartCompany businesses want to avoid reduced government spending and increased taxes.

“Those two directions are exactly what’s being talked about. So that’s the risk at the moment for small and medium businesses. The government, in cutting spending or raising taxes, slows the economy,” says Burn.

Burn says SMEs are particularly concerned about the proposed deficit levy.

“Many small and medium businesses are taxed under the personal income system, not the company tax system,” he says.

Council of Small Business Australia executive director Peter Strong warns additional compliance costs, such as the proposed paid parental leave scheme, risk hindering growth. 

“Don’t put in any speed bumps in the way of us because we’re the biggest tax collectors in the nation,” he says. “For example, paid parental leave, we shouldn’t be involved in it.”

Strong also wants the budget to help increase access to finance and capital for small businesses.

The businesses surveyed by the AI Group said increased spending on infrastructure, such as transport links, is almost as important as reduced taxes.

“The time is also right to lift the pace of infrastructure investment with the clear need to address the infrastructure backlog matched by capacity becoming available as mining-related construction projects are completed,” Ai Group chief executive Innes Willox said in a statement.

But Strong warns against concentrating infrastructure investment along the east coast.

“We need it to be spread across the nation. We don’t want all the infrastructure funds just spent in Sydney or Melbourne or on the east coast,” he says.

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