Rate cut welcome, systemic reform required

While the Council of Small Business Organisations Australia (COSBOA) has welcomed the Reserve Bank of Australia’s (RBA) decision to cut interest rates, it has warned brave economic reform is the key to stemming the nation’s flailing productivity growth.

The 0.25pc reduction to 3.6pc is the RBA’s third rates cut this year and, according to COSBOA Chair Matthew Addison, would improve consumer confidence and stimulate spending, which would support the small business sector.

However, systemic long-term economic reform, such as cutting the company tax rate to 20% for small businesses, was key to supporting the sector thrive now and into the future.

“Our hope is that this rate cut lifts consumer spending, which will help improve cash flow for small business in what can only be described as tough economic conditions,” Mr Addison said.

“However, cutting interest rates is not a long-term solution. Our recommendation to cut the company tax rate for small businesses to 20%, which has been endorsed by the Productivity Commission’s findings, would not just improve cash flow. It would allow small businesses to reinvest, employ more people and innovate.”

Mr Addison, who will represent the small business sector at the Federal Government’s Economic Reform Roundtable, said the mounting cost of rent, insurance, energy, wages and compliance presented a significant challenge for small businesses.

He described the Roundtable as a key opportunity to get Australian productivity back on track, with small businesses forming the backbone of the economy.

“Small businesses don’t need more red tape, they need it cut. The cost of compliance is crippling and for small businesses, with limited time and resources, the burden is hard to bear,” Mr Addison said.

“In addition to cutting the company tax rate to 20%, we will also be advocating for instant asset write offs to be made permanent and increased to at least $150,000, incentivisation to increase investment in training and upskilling, and review of unnecessary regulations.”

Mr Addison said it was imperative the voice of small business be heard at the Roundtable and he looked forward to participating in constructive discussions.

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For media enquiries or interviews, please contact Anne-Louise Brown at anne-louise@akinagency.com.au or call 0406 987 050.

About COSBOA

Established in 1979, The Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.

For more information, visit www.cosboa.org.au