COSBOA calls for universal definition for small business – here are five different ways we’re described
Friday, April 27, 2012/
SMEs have begun lobbying the Government for a change in the definition of “small business”, arguing there are too many descriptions across different levels of Government that confuse entrepreneurs and stop them from accessing assistance.
Independent MP Rob Oakeshott, Opposition business spokesman Bruce Billson and officials from the Prime Minister’s office and treasury will be attending a roundtable hosted by COSBOA and the Tax Institute on May 1 to discuss a possible new definition.
COSBOA chief executive Peter Strong told SmartCompany this morning he was surprised by the amount of interest from small businesses.
“We’re getting interest from very small businesses about a possible change, because it’s confusing.”
“The problem is there are lots of issues around changing a definition. Once you have something, you need to stop people from rorting it while still helping small businesses.”
COSBOA and the Tax Institute say there are too many definitions of small business across various levels of Government, including the ABS, ATO and Fair Work.
The debate comes as the Greens flagged possible support for increasing the definition of small business from a revenue threshold of $2 million to $5 million so more businesses could benefit from proposed tax cuts.
Tax Institute chief executive Robert Jeremenko says SMEs simply don’t have the time or funds to comply with all of them – meaning some miss out on assistance.
“Small businesses aren’t as capable in their staff members to absorb compliance costs, and therefore can’t adhere to some of these requirements.”
And while both Strong and Jeremenko say they don’t expect any long-term solutions to come out of next week’s meeting, they say it will be a good opportunity for members of Parliament and the Government to understand where small business is coming from.
“Are we going to solve all the world’s problems? No,” says Jeremenko. “But at least we can start looking at something like a standard definition to get people talking.”
“We’re hoping the roundtable is an opportunity to have every different government body and relevant actor in the small business space around one table to raise common issues.”
Many businesses may not even know how many definitions there are in Government for an SME – here are five of them.
The ABS uses a number of different definitions, including businesses that actively trade with between 0-19 employees, a micro business as having between 0-4 employees, and a medium-sized business as defined with between 20-199 employees.
Many thresholds in the ATO define a small business as having aggregate turnover of less than $2 million.
3. Fair Work
Fair Work defines a small business as an entity with fewer than 15 employees.
In New South Wales, small businesses can access a rebate of up to $500 for the cost of purchasing and installing safety equipment – but small businesses are defined as any entity with up to 20 full-time employees.
5. Contract law
The act of defining small businesses in contract law is complicated. COSBOA points out there is currently no “Government-sanctioned access to simplified operation of contract law for small businesses”.
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