Businesses wanted 1% tax cut
TWEED Chamber of Commerce president and businessman Rory Curtis is disappointed the 2012 federal budget offers no compensation to businesses slugged with an increase in superannuation payments.
As a product of the Mining Resource Rent Tax legislation passed earlier this year, employer superannuation contributions will be raised from 9% to 12% over the next six years.
Prior to the legislation being passed, the government said it would deliver a 1% cut to company tax, but never delivered on the promise.
"It's disappointing the 1% cut hasn't come through because after the rise in electricity prices from the carbon tax, superannuation is going to be the next biggest cost for business," Mr Curtis said.
"There's not a lot of joy for business in this budget.
"But I am a realist, they have a budget to balance and a credit card bill of $400 billion and I'd like to see that return to surplus.
"But if you're going to put an impost like extra superannuation on businesses and not offset anything it's not right."
The NSW Business Chamber has echoed Mr Curtis' view.
CEO Stephen Cartwright is furious the budget fails to reward Australian businesses for driving the world's most resilient economy.
He said the loss carry back scheme and the increase in the small business instant asset write-off scheme were welcomed but were not an appropriate replacement for a cut in the company tax rate.
"The scheme is estimated to only contribute about a sixth of the value a cut in the company tax rate would have provided to business," Mr Cartwright said.
"The government's decision to dump their promise to cut company tax to 29% is a blow to small and medium enterprises across the country, especially those who are not getting any benefit of the mining boom.
"Instead, the government has chosen to redirect this funding to household support, despite households already receiving generous support for the impact of the carbon tax in previous packages."
Mr Cartwright said he was pleased, however, that Prime Minister Julia Gillard and Treasurer Wayne Swan had delivered on their commitment to return the budget to surplus.
"A strong sense of fiscal responsibility and a determination to balance the nation's finances should be applauded when compared to other nations which are facing up to the reality of painful austerity measures due to lax spending restraint," Mr Cartwright said.
"Returning the budget to surplus will help to take pressure off interest rates and exchange rates, both of which are hurting Australian businesses."