Gordon Hill

Gordon Hill

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    Opposition plan would hit small business with high taxes

    18/01/1993 12:00 AM
     
     
    Small business would be hung, drawn and quartered under the Opposition's small business policy, Small Business Minister Gordon Hill said today.
     
    "Richard Court's small business policy is limply to adopt the national Fightback-GST package of extra taxes and time-wasting red tape," Mr Hill said.
     
    "That package will see small business hit by company tax going from 39 cents to 42 cents, GST adding directly and indirectly to costs and GST causing an administrative and time-wasting nightmare.
     
    "Promises to abolish payroll tax are a hoax.
     
    "The Opposition policy is simply to replace payroll tax with GST.
     
    "Business not paying payroll tax at present - about 90 per cent - get a new burden called GST.
     
    "Court's so-called promise - like so many others put forward by the Opposition - is entirely dependent on a Hewson Government being elected in Canberra and GST being imposed.
     
    "Without Hewson, they have no small business policy.
     
    "The Government already has acted to exempt the bulk of businesses from payroll tax.
     
    "Just last week, the Premier announced in her 'Adding Value' plan that another 1,400 business will be exempted from payroll tax, meaning that 92 per cent of all businesses will not have to pay it.  This means no small business will pay payroll tax.
     
    "The Premier also announced that she would reduce by at least half the number of licences and regulations currently applying in Western Australia and ensure that by July next year no regulations are more than eight years old.
     
    "The Government will abolish the renewal fee for business registrations and keep the fee for new registrations within the CPI.
     
    "It will establish a small business mediation service to provide quick and cost-effective resolution of disputes between small business traders."
     
    Mr Hill said that many of WA's almost 90,000 small businesses which were struggling to survive at present would have no chance under Fightback and the GST.
     
    He said that on top of increases of 10 per cent of more for electricity, water, rates and other business costs, they would have to meet the considerable cost of complying with the GST requirements.
     
    "At present, they do not have to worry about indirect taxes.
     
    "With a GST, they will have to be full-bottle on what attracts GST and what does not.
     
    "They will also have to set up a new accounting system and do all the paperwork for the Treasury."
     
    Mr Hill said studies of GSTs and similar taxes overseas had produced the following findings:
     
    ·         complying with GST requirements cost small businesses up to two per cent of turnover;
    ·         the smaller the business the higher the compliance cost;
    ·         small businesses waste 20 per cent of time and effort on GST compliance;
    ·         businesses making marginal profits have to charge the 15 per cent GST on their goods and services, further reducing turnover; and
    ·         25 per cent of GST revenue is consumed by collection costs and this is met by business, not government.