QLD and ACT budgets light on for small business
Wednesday, June 4, 2014/
Small businesses are not among the losers of this year’s Queensland and Australian Capital Territory budgets, but they’re not necessarily among the winners either.
The Queensland and ACT governments both handed down their 2014-15 budgets on Tuesday, with both states recording deficits.
Queensland’s finances are in the red by $6.1 billion, a significant improvement from the forecasted $7.6 billion. The ACT is expecting a deficit of $333 million over the next 12 months and plans to return to surplus in 2017-18.
Proposed asset sales were the big ticket in the Queensland budget, with Premier Campbell Newman choosing not to increase taxes for business and individuals.
This move has been welcomed by the Queensland Chamber of Commerce and Industry, with general manager of advocacy Nick Behrens telling SmartCompany this morning the budget strikes a “balance between shoring up the financial position of the state and investing in Queensland’s economic future”.
Behrens says the government has “done very well to resist the urge to raise taxes” and taking on board the chamber’s message that “if you increase taxes on small business, it costs economic activity and jobs”.
However, Behrens says the government’s decision not to raise the threshold for payroll tax is “disappointing”.
The Newman government committed to raising the payroll tax threshold to $1.6 million when it was elected in 2012, with the increase to be staggered in $100,000 increments each year over six years.
Behrens says the threshold is currently at $1.1 million but the government has delayed the next $100,000 increase until July 1, 2015. “We were hoping the government would get back on track and increase the threshold to $1.2 million in 1 July 2014,” says Behrens.
While Behrens welcomed the government’s proposal to use 25% of the proceeds of asset sales to establish an $8.6 billion Strong Choice Investment Fund to invest in infrastructure projects, he says there is currently a “lack of information available to assess the appropriateness of assets sales for Queensland”.
“The benefit to the budget papers alone is not enough to get business support,” he says.
Nevertheless, Behrens says confidence among small businesses in Queensland is likely to be buoyed by the government’s plan to return the budget to surplus in 2015-16.
“We think that’s an outcome that aligns with small businesses’ expectations of government and certainly aligns with small business practices themselves,” says Behrens. “Small businesses need to balance their own books and they expect that of government.”
The government has committed $7.7 million to continue to fund its Business and Industry Portal, which Small Business Minister Jann Stuckey said in a statement attracted more than 2 million unique visitors in 2013-14.
Stuckey said the funding will also allow the government to continue its Mentoring for Growth program, which provided assistance to more than 370 businesses in the past 12 months.
The minister also said the state’s small business sector will benefit from increased funding for new sporting and tourism infrastructure, including the 2018 Commonwealth Games which will be held on the Gold Coast.
The ACT budget was also light on for small business, apart from an increase in the payroll tax threshold.
The government has said the threshold for paying payroll tax in the ACT will increase to $1.85 million, a move which will mean around 40 businesses will no longer be required to pay payroll tax.
The government said that together with cuts made to payroll tax in 2012, businesses in Canberra will now be paying, on average, $25,000 less in payroll tax each year.
However, The Australian reports the overall level of payroll tax paid by ACT businesses will increase as the government has decided to remove the ‘genuine employer exemption’, which relates to contractors employed through recruitment agencies.
The ACT and Region Chamber of Commerce and Industry welcomed a number of measures to help small business contained in the budget, including the lifting of the payroll tax threshold and a reduction in stamp duty, as well as more general measures to encourage local businesses in Canberra and a “continued focus on tackling red tape”.
However, the chamber said a number of other budget measures, including a 35% increase in the Fire and Emergency Service Levy for commercial buildings, will directly hit local businesses.
Overall, the chamber labelled the budget as “fiscally necessary”, but said more needs to be done to “rein in escalating debt and remove barriers to private sector investment”.