Tax reform was the key item on the agenda at yesterday’s National Reform Summit, but small business was largely ignored at the event.
Business leaders and industry representatives were in general agreement that the corporate tax rate should be lowered with former Treasury secretary Martin Parkinson leading a “spirited” push to cut the amount of tax paid by Australian businesses.
Parkinson told summit attendees half of any cut to company tax “ends up in the hands of workers” in the form of jobs and wages, reports Fairfax.
However, Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this morning he “didn’t think there was consensus” on the issue of cutting company tax.
“There was a good discussion but I didn’t think there was complete agreement,” Strong says.
Strong was disappointed that many important issues for small business were left completely off the table.
“What I found disappointing is there was no focus on what particular groups can do themselves to improve the economy,” Strong says.
“There was no discussion on workplace relations, competition policy was hardly mentioned.”
“And on productivity, the thing missing is how the dominance of some businesses is holding our productivity back.
“We all have to look at ourselves. If small business gets it wrong, we lose our house. If big business gets it wrong, nothing happens.”
Strong says “the most exciting part of the day” was a colourful exchange between Parkinson and Ged Kearney, president of the Australian Council of Trade Unions, on the issue of payroll tax.
Kearney reportedly told summit attendees she was “happy to look at things like payroll tax” but said she is not inclined to support increases to the goods and services tax.
But Parkinson said the taxes are similar in the sense they are levied at a flat rate and do not change depending on the taxpayer’s ability to pay. He said a payroll tax without concessions is “identical to the GST”.
“You’re too tricky by far,” Kearney told Parkinson.
“That’s not me being tricky, it’s economics,” he replied.
While Strong says there was at least some “point scoring” throughout the day, he believes summit attendees made a “sincere attempt at looking to agree on certain things”, although this wasn’t done “blindly” as there were still some sticking points.
Strong says it is also unclear about what the lasting outcome of yesterday’s summit will be.
“I’m a bit confused about the next step,” he says.
“But it is too easy to be negative so we’ll see what they come up with.”