Emerson rules out Federal Government takeover of payroll tax

Small business minister Craig Emerson hosed down hopes of a Commonwealth takeover of payroll tax yesterday, just hours before the Government announced the establishment of a new Small Business Advisory Committee. Emerson told a forum hosted by the Council of Small Business Organisations of Australia that it was not likely the Federal Government will reimburse states for abolishing payroll taxes.

Instead, Emerson said to the crowd of about 150 that compliance costs should be targeted.

“If we went to the states and said, ‘abolish payroll tax’, I think the answer would be, ‘great, where’s our $14 billion?'”

“You have to deal with this issue. You can’t tell each state how to run its revenue. Payroll tax wouldn’t be my first port in designing a tax system, but I do think we can reduce compliance costs.”

Emerson has also ruled out extending the popular 50% invsetment allowance announced in the Federal budget.

Yesterday he fielded questions for two hours from organisations such as the National Independent Retailers Association, the Motor Trades Association of Australia and the Institute of Chartered Accountants.

Concerns raised included a lack of notice from the Australian Competition and Consumer Commission about the introduction of fair pricing laws, unfair contract terms legislation and the costs associated with new retail awards.

The perennial problem of banks gouging business customers was also raised with Emerson, who said the Government has worked hard to try to help individual small businesses who are having trouble securing finance.

“I’m not here to defend the banks … that is what they are there for. But we do have the small business hotline and website, where businesses can go if they feel they are being treated unfairly. We have had some success stories already from that, with some businesses obtaining loans when they couldn’t before.”

A number of representatives also raised concerns about the availability of information regarding the pending introduction of new industrial relations legislation.

But Emerson defended the Government’s role.

“There’s no substitute for face-to-face contact and training, but there are over one million small businesses and that makes a problem for the Government.”

Meanwhile, the COSBOA National Business Summit began last night with Prime Minister Kevin Rudd announcing the establishment of a Small Business Advisory Committee.

The committee will be made up of an independent panel of experts, with expressions of interest for members available soon for appointments later this year.

“This panel will be a strong voice for small business in government,” Rudd said. “The plan will be consulted in the early stages of a policy’s development, and then as the proposal is about to be submitted for final deliberation.”

No details have been released regarding the panel’s responsibilities, but its announcement may relieve the fears of some small business representatives, such as Australian Retailers’ Association chief executive Richard Evans, who said early yesterday that small business is under-represented in government.

“I think we need some recognition reform. We have a great small business minister, but all the other ministers need to be convinced about what’s happening,” he said.

“These forums seem to be the same issues raised again and again. Small business is just under-represented in government, whether it be a liberal or labor government at the time.”

The COSBOA summit continues today with Federal opposition leader Malcolm Turnbull speaking, along with Australian Taxation Office commissioner Michael D’Ascenzo.