Most of our members have their views on tax – tax collection, buy viagra tax processes and taxes themselves. Se below for some of these.
Phil Johns – Treasurer of COSBOA with his own idea on what we should do HERE
Fitness Australia – see their thoughts on why Fringe benefits Tax on health makes no sense HERE
Australian Booksellers Association – views
2016-17 CAFBA Pre-Budget Submission
THE NEED FOR AN INVESTMENT ALLOWANCE
The Commercial Asset Finance Brokers Association of Australia Limited (CAFBA) welcomes the opportunity to provide a submission to Treasury to consider when formulating the Budget for 201617.
CAFBA is the peak national body of commercial equipment finance brokers, whose prime area of business is the distribution of commercial equipment finance facilities to their clients. CAFBA members are career professionals who arrange in excess of $7bil of new commercial equipment finance for their clients annually. Our members and their clients are predominantly small businesses, and operate in the commercial finance market. The total receivables in the Australian equipment finance market is approximately $100 billion, so it is an important component of the Australian economy.
The Australian Equipment Lessors Association (AELA) has collated statistics provided by Financial Institutions of new business volumes for general equipment finance for the last five years. These figures show that whilst new business volumes exhibited consistent improvement in the three years to 2012, they declined in 2013. There was marginal improvement in 2014, however new business volumes have remained subdued over the recent period. There is a widely held view and strong anecdotal evidence that the increase in new business volume from 2009, particularly in the shadow of the Global Economic Crisis, was due to an investment allowance.
In the 2015 Budget, the Government wisely recognised that this section of the economy needed to be stimulated again, and introduced an accelerated depreciation for small businesses, which provided an immediate deduction for assets that a small business start to use, or have installed ready for use, provided each depreciable asset cost less than $20,000. This government initiative was welcomed by CAFBA at the time, but believes the incentive needs to be extended to the wider business community.
It should be further noted that the incentives in the 2015 Budget were restricted to businesses with a turnover of less than $2m, which greatly restricted the number of businesses that could take advantage of the incentives.
The $2m turnover definition of small business has not been indexed for 16 years, and if an across the board investment allowance is not feasible, then current incentives should be made available to businesses with a turnover up to $10m. However in our submission recommendations, CAFBA puts forward a realistic turnover definition of $5m, to be indexed annually.
CAFBA believes that a business Investment Allowance is required to further stimulate the economy and boost market confidence. The most recent version of an investment allowance in Australia, as previously mentioned, was in 2009 as part of a temporary package to limit the impact of the global financial crisis. That investment allowance was set at 50% of the asset cost. This had an immediate effect.
The benefits of an Investment Allowance
The economy needs a stimulus package to further boost business confidence and activity. An investment allowance will increase purchases across the economy.
There are some 2.1 million small businesses in Australia and the more of them that are purchasing goods the greater the movement of cash through the economy and the better the business returns. In turn this creates additional revenue for the government due to increased GST revenue from the increased spending.
A positive impact on employment
Reduced company tax allows employers to allocate funds towards employment, and there will be an increase in revenue for the government from PAYG from the extra people employed.
Increase in confidence in the small business community .
Small businesses need to be confident of the future before considering purchasing additional equipment. Business investment is a big decision. Additional equipment purchases will enable business owners to concentrate on growth and taking business to the next level, while upgrading equipment significantly lifts productivity and long term profitability. A tax incentive such as an investment allowance will greatly assist the confidence of a business owner to embark on growth.
CAFBA’s recommendation on the form of an Investment Allowance
CAFBA believes that a new Investment Allowance should be available to a business with a turnover of less than $5 million, to be indexed annually. The investment allowance should have the following criteria:
Additional 50% tax deduction available for capital purchases
Eligible assets will be tangible and depreciable
Commitment to invest must be made between certain dates
Eligible assets must be installed and ready for use by a certain date
Eligible assets must cost between $1,000 and $2,000,000 (excluding GST)Eligible assets may be new or used.
Previous investment allowances have applied to new (or demonstrator) plant, equipment and motor vehicles. However we believe any new allowance should apply to both new and used plant, equipment and motor vehicles, as used assets are usually purchased in Australia from Australian suppliers, which assists the Australian economy rather than offshore suppliers. An allowance that applies only to new assets could result in offshore purchases and could seriously disadvantage local second-hand sales.
This form of temporary investment allowance is an additional tax deduction, which is easily quantifiable and has immediate effect. CAFBA believes it will have a greater incentive value than a small reduction in company tax, which is difficult to quantify and has far less impact on day to day operations.
CAFBA appreciates this opportunity to provide input into Budget policy. As an Association we are in the unique position of having Members who are small business owners, and whose many hundreds of thousands of clients are also predominantly small businesses. It is from this position that provides us an insight into the grassroots economy, and therefore believe that the introduction of an investment allowance would provide small business a tremendous incentive to grow and commit to Australia’s future.