Frustrating… 4 taxes on 4 square metres

I’ve never been one to make political comment. As a business owner and citizen – I just get on with working hard to grow a business, raise my children and contribute to the community.

I was asked to participate on The Nation for Sky News on 30 April – just prior to the release of the response by the government to the Henry Review, and also this weeks budget. (see below some of my comments)

I have often invited Julia Gillard to come and hang out at RedBalloon for her to experience the way business is done ‘this century’. How smart employers are investing in people – knowing that engagement gives us a competitive advantage.

Yet again – a government who was given a clear mandate from the people in the last election has failed to support business growth. I’m alarmed that no work has yet been done to clean up the taxation system (70 years and 3 levels of mess)

I pointed out in the interview; it is the cost of collection as well as the financial burden to business that puts such a burden on business. Quite frankly it is a disincentive to grow. (And let’s not talk about payroll tax – because I will just get angry)

I give you an example – we have two off street car spaces at our office – I have to pay the Sydney City Council a special tax on these, about $2000 per year. In addtion to that I have to keep a register of which employee uses them as they could be deemed FBTable. Two taxes on the same tiny bit of real estate. The cost and imposition on compliance is ridiculous. In addition of course we paid stamp duty when purchasing the property and we will pay capital gains tax when we sell it. Four taxes on one tiny bit of real estate – and all that cost of compliance.

We want leaders who will help business grow! No wonder I am cynical.

I’m interested to hear your views.

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4 Comments

  1. Posted May 14, 2010 at 5:37 pm | Permalink

    The last major tax review was apparently conducted in 1975 and it took 30+ years for reform to flow through in drips and drabs. I just don’t think the current Rudd government is up to the task of truly reforming taxation, it appears at the moment they are too politically motivated. I believe to really reform taxation you need to address the 3 tiers of government and whether they help or hinder growth in Australia. Your post already answers that question! We are starting to see a discussion on the relevancy of State Governments, but it will take time and a brave PM to implement any real change. I guess as entrepreneurs we get very frustrated at the slow pace of change, and how expensive that is.

    I’m curious Naomi, did Julia Gillard ever take up your offer?

  2. Posted May 14, 2010 at 9:44 pm | Permalink

    No not a word from Julia Gillard – I even asked Tanya Plibersek to pass on the message when we did Insight together – and after all I am one of her constituents, so you would think that she would be more than happy to pass on the message.

  3. Paul Burke
    Posted May 15, 2010 at 9:17 pm | Permalink

    As a partner in a regionally based accountancy practice, I wholeheartedly agree with your comments Naomi. I suggest that while tax reform is a hot topic it may be productive to have a united, passionate approach from small business to both sides and all levels of politics to push for a bipartisan approach to genuine reform. Motivation could be provided by emphasising and illustrating the potential great value to both the economy and government revenues of dramatically simplified, lower taxing systems, as you allude to in your final comments in ‘The Nation’.

  4. Posted May 15, 2010 at 9:27 pm | Permalink

    It was definitely disappointing that the government didn’t take the opportunity to simplify more of our tax system, but hopefully that still comes over time.

    I was pleased with the reduction in the company tax rate from 30% to 28% and while I feel for the big miners and the Resource Super Profits Tax, I don’t think it’s unreasonable to add that tax to offset taxes for other businesses, given the massive price rises for resources over the last few years.

    http://www.22michaels.com/2010/05/tax-reform-in-australia-impacts-on.html

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