A Coalition government will commit Commonwealth departments and agencies to pay small business suppliers on time or face paying interest on outstanding bills, Opposition treasury spokesman Joe Hockey says.
“Under the Coalition, all small businesses that provide services to the Commonwealth will get the benefit of a ‘pay on time or pay interest’ approach- formal contracts or not,” Hockey said in a post-budget speech to the National Press Club in Canberra.
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He says that if a bill isn’t paid within 30 days, interest will be applied at the same rate the Australian Taxation Office expects people to pay for late tax payments, currently 9.95%.
“Small businesses work hard for their money and should not be bankrolling government,” he said.
Hockey attacked the Labor government’s budget handed down last week, which revealed a $19.4 billion deficit, claiming it lacks integrity, pledging the Coalition would build a strong economy.
Pointing out he came from a family of small business people, including cousin Gus whose menswear business in Sydney had recently gone broke, Hockey says enterprise is the backbone of the Australian economy.
He says government should support business and reiterated that small business would be a cabinet portfolio within the Treasury department if the Coalition wins the federal election on September 14.
The Coalition’s objective is to reduce the overall tax burden on businesses and taxpayers “over time”, he said.
Hockey says the Coalition would also seek to create a more “cooperative” relationship between taxpayers and the Australian Taxation Office by appointing people with business experience to senior posts, reducing the complexity of tax laws while increasing their certainty, and establish a standing Parliamentary Committee to oversee tax administration.
Expressing reservations about the ATO administering and policing Australia’s tax system, Hockey says the Coalition would be prepared to break up the tax office and separate its policing and administration functions if the oversight committee believed it was necessary.
Australian Tax Office staff numbers were boosted by 508 in the federal budget as the government announced a crackdown on trusts and closing corporate tax loopholes.
Tax and small business experts had expressed concerns the crackdown could extend to small businesses.