The Labor party plans to reduce GST reporting red tape for small and medium businesses if re-elected.
As part of Ken Rudd’s commitment to being more small business friendly, the Prime Minister recently launched several initiatives targeted at small and medium businesses.
With not long to go before election day, Prime Minister Kevin Rudd has outlined how a re-elected Labor government would reduce GST reporting requirements for small and medium businesses, as a strategy to reduce red tape.
The Government says that it will reduce the number of business activity statements (BAS) that small and medium businesses are required to submit for GST returns.
Currently, businesses which turnover $2 million or more lodge four statements per year.
Mr Rudd stated that under a re-elcted Labor government, businesses with a GST turnover of less than $20 million a year will only have to lodge their BAS once a year at trhe end of the financiual year. Currently BAS statements need to be submitted every quarterly. Kevin Rudd says the change will benefit 1.35 million businesses.
“Small businesses are the heart and soul of the Australian economy… and our job is to make sure that we make their working day as easy as possible,” he said.
“GST compliance represents about half of the time it takes for small businesses’ overall compliance with business tax regulation. So we want to cut that further”.
Assistant Treasurer David Bradbury was unable to predict how much the new proposal will impact the federal budget.
“The cost is small but unquantifiable across the forward estimates,” he said.
“This will not have a significant revenue impact but it will remove a huge paperwork impact. That’s the point”.
“People are not going to be paying less tax, but they will be spending less time drowning in the paperwork involved with meeting their obligations under the tax system.”
Opposition small business spokesman Bruce Billson has already said that the Coalition will not be matching the BAS commitment for the labor party.
“Most business are operating on automated systems, the instalment paperwork is relatively modest,” Mr Billson said.
“It’s certainly a nuisance for some but it’s far less of a concern than an enormous bill shock at the end of the year, after having to do a year’s worth of paperwork at the end of that year, rather than do it in stages throughout the year.”
Yesterday, Prime Minister Rudd promised to streamline the administration of Labor’s paid parental leave (PPL) scheme for small businesses.
He reinforced his commitment that businesses with fewer than 20 staff will no longer have to administer government-funded payments for their long-term employees. Instead, Centrelink will pay eligible employees directly.
On top of making BAS simpler for small and medium business, Kevin Rudd is proposing to give small business a greater role in workplace relations policy. He is set to announce a new small business package, beginning with the appointment of an adviser with proven small business experience to the Fair Work Ombudsman.