This opinion article by Business Council Member and MYOB CEO Tim Reed was published in The Daily Telegraph on 3 June 2016.
Imagine if our Aussie swim team turned up to compete at the Rio Olympics, only to be told that the British swimmers would be allowed to swim a whole lap before the Australians could dive into the pool.
Most of us would feel outraged at the unfairness.
Well that’s exactly what is happening right now with Australia’s businesses, who have to pay between 28.5 and 30 per cent income tax while their British competitors pay 20 per cent, and their Asian competitors an average of 18 per cent.
This puts our businesses at a competitive disadvantage in a global economy, where any business from anywhere in the world can sell products and services in our backyard over the internet.
We have surveyed small and medium-sized enterprises (SMEs) and the results show a majority believe lowering the business tax rate for all of Australia’s businesses is important for the success of their own business, and because it will help make Australia’s economic pie bigger.
That’s why I get extremely worried when I hear people saying only the smallest businesses need tax relief and somehow the rest don’t matter.
At MYOB our accounting software has helped thousands of SMEs to better manage their finances so they can get on with what they do best – running their business and providing great products and services to the Australian community.
But what we also know from dealing with these businesses all around the country is small and medium businesses can’t survive without strong large businesses, and vice versa.
I have said before that for every dollar a small business spends with a large business, a large business spends $2 with a small business – it is an ecosystem that only works when all its parts are healthy.
The government also showed it understood this ecosystem with this year’s federal Budget, which included a carefully-staged plan to lower taxes for smaller businesses first, and then all businesses so that every business is paying 25 per cent tax within a decade.
Many of Australia’s small business owners would have regarded the budget as a shot in the arm for all of Australia’s businesses, which is good for everyone.
Every SME knows all too well that we are living in a global economy because they have to compete online against SMEs from all over the world, and they feel the impact on their bottom line severely when a larger business which once spent money with them has taken its business offshore.
We have to realise that, just like the Aussie swimmers having to wait for a lap before jumping in the pool, if we ask our businesses to play by an uncompetitive set of rules then they can’t win. They will take their business overseas or nor come here at all, and jobs will suffer.
When you attack business, you attack the prospects of every Australian worker, because business together employs more than 10 million Australians – eight in every 10 workers.
Only businesses, large and small working together and employing together, can help Australians get ahead and get our economy moving. All they need is to be at the starting line with their other competitors.