Regulatory roundup – June 2013

tax time accounting

ATO warns business: Don’t claim loss carry-back…yet
Business owners are being warned that a back-log of bills sitting in parliamentary in-trays means that one of the government’s long-promised business tax breaks, the $700 million loss carry-back legislation, will most likely not be passed and made available before the looming tax time. Implementation of the measure has been simmering away since it was first announced in the 2012-13 budget, but the legislation has been languishing at the bill stage. Under the measure, businesses would be able to carry back up to $1 million worth of losses to get a refund of tax paid on an immediately previous year’s profits.

Business sector fears Medicare levy hike may hurt consumer confidence
The federal government’s announcement that the Medicare levy will rise by 0.5% in order to fund its National Disability Insurance Scheme (NDIS) was met with a barrage of criticism from prominent business groups. The proposed hike means taxpayers earning $30,000 a year will pay an extra 41 cents per day, while those earning $70,000 a year will pay an extra 96 cents per day. Those earning $110,000 will pay an extra $1.51 per day. Executive director of the Australian Retailers’ Association, Russell Zimmerman, called on the government to reduce taxes in the aftermath of the Medicare levy hike. Similarly, chief economist of the Victorian Employers Chamber of Commerce and Industry, Steve Wojtkiw, said the difficult economic environment means it is an inopportune time to impose new taxes.

Small businesses reveal election priorities
Small businesses rank the company tax rate reduction, personal income tax reductions, and the removal of the carbon tax as the top three tax reform priorities for the next Australian government, according to a survey conducted by the Australian Chamber of Commerce and Industry (ACCI). The survey showed that other than the top three concerns voiced above, small businesses also want payroll tax reductions, other state reforms – concerning land tax, stamp duties, and insurance levies for instance – as well as fringe benefits tax reform.

Most businesses want a Coalition government
More than a third of businesses view a Coalition victory as more favourable for their operations, with only 7% of businesses indicating that a Labor Party election win would be more beneficial, according to Dun & Bradstreet’s latest National Business Expectations Survey. No businesses in the manufacturing and wholesale industries favoured a Labor win, while support for the Coalition was strongest in the construction, retail and wholesale industries at 47%, 44% and 42% respectively. But the survey also showed that the outcome of the election does not matter to 37% of businesses, and 15% said they were either unsure or did not know.

Record number of businesses for sale reflects difficult trading conditions
The level of businesses advertised for sale in the March quarter stayed near its recent record level, according to the BizExchange Index of Australian Private Business Values. BizExchange chairman David Bird said the softening in prices was on the back of the negative impact of legislation which he contends has reduced the flexibility of working hours and other conditions, as well as the downturn in the mining and construction industries – causing a substantial flow-on effect on service industries which are heavily project-related.