{"id":42640,"date":"2023-10-20T15:22:41","date_gmt":"2023-10-20T15:22:41","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/tax-breaks-on-the-agenda-for-october-forum-startupsmart\/"},"modified":"2023-10-20T15:22:41","modified_gmt":"2023-10-20T15:22:41","slug":"tax-breaks-on-the-agenda-for-october-forum-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/tax-breaks-on-the-agenda-for-october-forum-startupsmart\/","title":{"rendered":"Tax breaks on the agenda for October forum – StartupSmart"},"content":{"rendered":"

Tax breaks and personal tax changes are on the cards for October\u2019s tax forum, but not all industry groups are happy about how the summit is being handled or who is invited. <\/span><\/p>\n

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Releasing a discussion paper for the forum earlier this week, Treasurer Wayne Swan said the Government wants to have a \u201cconversation\u201d with business about the \u201cpatchwork economy.\u201d<\/p>\n

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The paper proposes tax breaks for equity financing as a way of both reducing business reliance on debt and targeting tax relief to the more marginal projects and sectors.<\/p>\n

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Other proposals up for discussion include tax breaks to encourage skilled workers to move to regional areas, and personal tax changes to encourage workforce participation and productivity.<\/p>\n

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The forum is expected to rebuild impetus for a long-term reduction in the company tax rate to 25%, as recommended in the Henry Tax Review.<\/p>\n

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The Government plans to reduce the company tax rate to 29% from 2013-14, with small companies benefitting from an early start from 2012-13.<\/p>\n

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However, the Henry Review recommends the corporate tax rate be reduced to 25%. In the short-term, an overhaul of the tax treatment of company capital raisings could help reduce business\u2019 reliance on debt.<\/p>\n

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According to the Henry Review, over-reliance on debt makes companies more vulnerable to insolvency and economic shocks, which could affect the stability of the economy as a whole.<\/p>\n

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The system also discriminates against smaller businesses and knowledge-based industries, which invest heavily in intangible items and may have more difficulty borrowing.<\/p>\n

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But any major concession on company tax rates or equity financing could come at a cost, with other less justifiable business tax breaks facing the axe.<\/p>\n

 <\/p>\n

\u201cMore generally, there may be scope for a detailed examination of whether the collective business and investment tax concessions and incentives are working well or whether their cumulative approach leaves scope for too much tax arbitrage,\u201d the paper says.<\/p>\n

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Swan said the discussion paper was not exhaustive but did \u201cpoint in the directions of reform\u201d, with fringe benefits tax indentified as an area ripe for reform.<\/p>\n

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\u201cSome of these are complicated and, in some cases, there are a number of alternative rules for the same type of benefit. This imposes high compliance costs on employers,\u201d he said.<\/p>\n

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However, Swan said debate surrounding the GST would be strictly off limits.<\/p>\n

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\u201cLet me make this absolutely clear: the Government will not be touching the base or the rate of the GST, end of story,\u201d he said.<\/p>\n

 <\/p>\n

Swan said he would talk to industries, including manufacturing and tourism, over the coming weeks about options to provide cashflow relief for struggling businesses.<\/p>\n

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\u201cI don\u2019t want to really pre-empt those discussions except to say that we\u2019ve got to continue to have a discussion about how we put in place arrangements which keep them competitive in the new environment that we\u2019re in,\u201d Swan said.<\/p>\n

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The summit will be held on October 4-5, and participants include representatives from business, unions, government and academia.<\/p>\n

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The Business Council of Australia has welcomed the event but believes the GST should be on the agenda, while the Australian Council of Trade Unions said the summit should not be used by business to push for corporate tax cuts.<\/p>\n

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Peter Strong, executive director of the Council of Small Business of Australia, says he was \u201cpleased as punch\u201d to even be invited.<\/p>\n

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\u201cWe\u2019re going to go to our constituents and ask them if they have any ideas. COSBOA will focus on complexity, particularly around superannuation, which is far too complex for small business,\u201d he says.<\/p>\n

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Meanwhile, the Australian Retailers Association has expressed its disappointment over not receiving an invitation to the forum.<\/p>\n

 <\/p>\n

\u201cThere has never been a more important time to advocate for a sector that\u2019s struggling,\u201d ARA executive director Russell Zimmerman says.<\/p>\n

\u201cWe are looking forward to discussing this matter with [Small Business] Minister Bill Shorten and rectifying the omission.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Tax breaks and personal tax changes are on the cards for October\u2019s tax forum, but not all industry groups are<\/p>\n","protected":false},"author":2,"featured_media":60221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/42640"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=42640"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/42640\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/60221"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=42640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=42640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=42640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}