The federal government’s proposed small business jobs package couldn’t have come at a better time as small business confidence slumps. The Prime Minister announced at the National Press Club at the start of this month that the government was working on a small business jobs package. Although no detail has been released, the Prime Minister has recently flagged that the package would be announced before the May budget. It will apparently centre on a company tax cut on 1 July 2015, at least as big as the 1.5 per cent already foreshadowed, but perhaps more.
This focus on small business jobs is no doubt partly in response to the January unemployment figure of 6.4 per cent, the worst since 2002. If small business is the “engine room of the economy” as successive governments have claimed, then it makes sense to free up the sector to grow and employ. But it comes at a time when small business owners are feeling pessimistic about 2015. The Australian Chamber of Commerce and Industry (ACCI) has released the results of its small business survey, which found small business owners had a rocky December 2014 quarter and did not feel much optimism that things would improve in 2015.
The ACCI survey asked small businesses about the constraints to growth and they identified business taxes and government charges as their biggest constraint, followed by insufficient demand, import competition and non-wage labour costs. There are some big policy challenges for the government in that list. A tax cut above 1.5 per cent may go some way to easing pressure on small business, but 1 July seems a very long way away right now.
