Economy

Carbon trading conditions foisted on SMEs … Interest rates steady … Good CGT news … Housing slows

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SMEs left out in the cold in climate change decision-making

The SME sector is unrepresented on the Task Group on Emissions Trading set up by the Howard Government to advise it on carbon emissions trading. The panel’s first report – an issues paper – was released this morning.

The issues paper sets out options for a carbon trading scheme which, if implemented, could result in increased compliance costs and electricity prices for SMEs.

The Task Group on Emissions Trading is dominated by the big end of town, comprising five government department heads and six representatives from big businesses such as Qantas, Xstrata and NAB.

The issues paper asks whether Australia should forge ahead with its own carbon trading scheme given the “unlikely” prospect that an international system will emerge in the near future.

Prime Minister John Howard has previously said that he would only support participation in an international carbon trading system that includes big emitters such as India and China.

The issues paper states: “A global model might possibly evolve from a set of national and regional schemes”, a statement that could be seen as another sign that the Howard Government is moving closer to introducing a local scheme.

Small and medium sized business owners can make up for their lack of representation on the Government’s panel by making a submission before 7 March. The panel will issue its final report by 31 March.

— Mike Preston

 

Interest rates steady

It’s official. At its meeting yesterday, the Reserve Bank board decided to leave the cash rate unchanged at 6.25%.

— Jacqui Walker

 

Great CGT news for small business

Further transitional tax capital gains tax concessions were announced by the Federal Government today.

After today, entrepreneurs who have sold a business since the federal budget on 10 May 2006 get an extension of the period of time in which they can get the small business capital gains tax concession on the proceeds of sale going into super. They can get access until 30 June 2007.

Before today, business sellers only had seven days to access the concession.

After 30 June 2006, small business sellers will have 30 days in which to get the money into their super and get the capital gains tax concession.

These new changes are part of the Howard Government’s $7.2 billion superannuation overhaul.

— Jacqui Walker

 

Economic round-up

The RBA seems to have got it right, with further signs of a slowing economy today from the AIG/Housing Industry Association construction index for January.

Residential and engineering construction declined significantly in January, while commercial construction managed only modest growth, and employment fell for the third straight month.

Struggling builders had some relief on costs, however, which grew at their lowest rate in nine months.

Falling new orders across all parts of the construction industry means the downward trend looks set to continue for at least the next few months.

Meanwhile, Victorian micro caps (listed companies valued between $50 million and $300 million) increased in value by 29% in the December quarter, Deloitte reports in its Victorian Stock Exchange Index.

Micro caps were the fastest growing sector, ahead of mid- (16.3%), small- (9.6%) and large- (5.2%) listed companies based in Victoria.

And finally to the US, where President George Bush yesterday presented a $US2.9 trillion budget to Congress for ratification. The budget forecasts 3% growth, 4.6% unemployment and inflation at 2.6%.

— Mike Preston

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