Regulatory Roundup – March 2014

More third-party tax compliance reporting planned

Of the backlog of 92 unlegislated tax changes that were announced by the previous government, one of them that will go ahead deals with the introduction of third-party reporting mechanisms for tax information. The new regime will be set up in relation to sales of real property, sales of shares and units in unit trusts, sales through merchant debit and credit services, and taxable government grants and other payments. The government said a key consideration in developing the third-party reporting regime was to minimize the costs for businesses and other bodies that are required to report additional information to the Tax Office.

Spike in scams and small business complaints to the ACCC

The Australian Competition and Consumer Commission (ACCC) received close to 3,600 complaints from small businesses between July 1, 2013 and December 31, 2013 – an increase of 84% between the first and second half of 2013. Misleading conduct and false representations emerged as the biggest single issue for the small business and franchising sector, followed by consumer guarantees. Franchising complaints rose from 286 in the previous period to 309, and inquiries from small businesses also “increased dramatically”. The ACCC also revealed that many small businesses were victims of scams, with more than $700,000 reported lost through false billing scams.

Most ASIC enforcement action was taken against small businesses in last half of 2013

The latest Enforcement Report from ASIC showed that it took most of its criminal, civil and administrative actions against small business owners in the second half of 2013. The small business sector accounted for 228 of these actions, with 181 being criminal actions against directors, 42 “administrative remedies” and five being actions regarding efficient registration and licensing. On top of those 228 cases, there were also 112 cases within the areas of market integrity, corporate governance and financial services. ASIC said loan fraud, false accounting, takeovers and shareholder disclosure, as well as advertising are on its future radar.

Government urges Fair Work Commission to consider businesses in its wage review

The federal government has urged the Fair Work Commission (FWC) to take into account small businesses, as the national workplace relations tribunal embarked on its first comprehensive review of the modern awards system since the introduction of the Fair Work Act in 2009. In its submission, the government said the FWC should consider the impact of employment costs on employers’ decision to hire workers over the next four years. However, Australian Council of Trade Unions (ACTU) president Ged Kearney hit back and said measures such as penalty rates are essential because they “are paid to those workers who support businesses by

working hours others don’t want to work such as Sundays, public holidays and late nights”.

Compliance is necessary, but red tape is useless, says business lobby group

The Council of Small Business Organisations of Australia (COSBOA) has come out in favor of the government’s push to reduce red tape, but executive director Peter Strong is adamant that there is a clear divide between essential compliance tasks and the unnecessary bureaucratic demands that give “red tape” its negative reputation. Strong said the compliance that is essential included: tax collection (mainly GST and PAYG), safety for workplaces and products, license applications and renewal, machinery safety and inspections, and signage management. Conversely, the red tape that should be removed is in the areas of superannuation, paid parental leave, annual tax returns, license renewals, any forms that cannot be completed online and discrimination issues.

Small businesses granted immunity should they rely on Fair Work Advice

Minister for Employment Eric Abetz has moved to reassure small businesses that they will now be able to rely on advice from the Fair Work Ombudsman without fear of prosecution from the Fair Work Ombudsman, should the information provided prove to be incorrect. Employers can call the Fair Work Info-line on 13 13 94 between 8am and 5.30pm weekdays to obtain free advice and assistance from a team of expert advisers. A free interpreter service is also available by calling 13 14 50. Additionally, there are a range of tools and resources available on the Fair Work Ombudsman’s website at www.fairwork.gov.au/smallbusiness.

SEEK’s annual Salary Review charts industries and states with highest and lowest salaries

SEEK’s annual Salary Review revealed that New South Wales offered the highest chance of a pay increase at 63%, followed by Victoria (60%), Western Australia (58%), Queensland (53%) and South Australia (52%). The sectors that experienced the highest year-on-year salary growth were insurance and superannuation (6%), sport and recreation (6%), healthcare and medical (5%), retail and consumer products (4%), and community services and development (4%). Conversely, job roles that had the greatest decline in year-on-year salaries were construction planners (-21%), materials handlers (-16%), environmental services assistants (-13%), engineering draftspeople (-11%), and construction estimators (-11%).

Small business owes the Tax Office $10 billion – and it wants it back

According to the Tax Office’s latest annual report, collectible debt owed to it increased by 6.5% in 2012-13 to 17.7 billion, with the small business sector owing more than 60% of this overall debt. This equated to small businesses owing the Tax Office approximately $10.6 billion. In its annual report, the Tax Office said that because most of the collectible debt can be identified as being owed by smaller businesses, it has found that “capacity and willingness to pay continue to make managing tax and superannuation debt challenging”. The Tax Office provides support for small businesses it considers capable of repaying the debts and enters into support arrangements with them – including the development of payment plans aligned with a business’s cash flow and ability to pay.

Small business owners under-insured and unprepared for retirement: St George Bank

Almost half of small business owners surveyed in St George Bank’s latest research said they do not have adequate insurance in place to protect themselves if an unexpected event affects their ability to run their business and earn money for retirement. Other worrying indicators from the research were:

• 55% did not think they had saved enough for retirement
• 20% had never sought advice regarding their personal health and insurance
• 74% did not have a retirement plan in place
• 26% said the government pension will be their main source of income when they retire
• 20% said they will fund their retirement by selling their business, and

54% had made no plans for business succession.

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