Small business has united with the nation’s largest companies in urging the federal parliament to back a competitive tax rate of 25% for all Australian companies.
Peter Strong, chief executive of the Council of Small Business Organisations of Australia (COSBOA), which represents more than 350,000 small businesses, said: “The strong connection between all Australian businesses drives our economy – we need each other to thrive.
“If much-needed investment dollars from bigger businesses are encouraged to disappear overseas, there will be less opportunity for the millions of small businesses engaged in the supply chains throughout the economy.
“Small businesspeople are innovative, agile and often willing to take a risk but, whether we like it or not, small businesses do not have the funds to invest in new infrastructure or commercialise our innovations – that’s where we need big business investment.”
Jennifer Westacott, chief executive of the Business Council of Australia, which represents more than 120 leading companies, said: “When I talk to Australian small business owners, they understand that businesses of all sizes depend on each other to thrive.
“The biggest beneficiaries of a competitive company tax rate will be the millions of small businesspeople and wage-earners who depend on a strong economy for their livelihoods.
“Australia is at imminent risk of having the third-highest company tax rate in the world. Our tax system needs to encourage investment in Australian jobs, not dissuade it.”
Big and small businesses rely on each other and are stronger together. Activity between businesses – small, medium and big – is worth around $555 billion a year. They are each other’s customers and suppliers.
The government’s Enterprise Tax Plan proposes to reduce the company tax rate for all businesses from 30% to 25% over 10 years.
The decision by the Senate to restrict the tax cut to businesses with a turnover of up to $50 million a year leaves the job half done and our economy is at risk as other countries become more competitive in the global race for investment.
Keeping this two-tier system will severely limit overall economic benefits that would flow from fully delivering the tax cut and it will create distortions and become a disincentive for companies to grow.