A major coalition of financial industry bodies and associations has publicly added their voice to the growing chorus of groups backing small business and farmers’ concerns regarding the Government’s proposed 'Super Tax’.
The Joint Associations Working Group, consisting of Australia’s 11 industry and professional bodies representing accountants, superannuation trustees, financial advisers and other groups yesterday called for removal of the Super Tax from the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, to allow more time for consultation to avoid unintended impacts of the proposal.
The announcement builds on the ongoing joint calls made by the National Farmers’ Federation (NFF), Council of Small Business of Australia (COSBOA), as well as the eight lower house crossbenchers last week and upper house members prior to that. These groups have raised a number of issues, in particular citing the impacts that the taxation of ‘unrealised gains’ will have.
The Group’s release, which include CPA Australia, Chartered Accountants Australia and New Zealand and Financial Services Council, stated:
“Unrealised capital gains in the calculation of earnings is likely to cause liquidity stress for many individuals and business entities impacted by this tax. The University of Adelaide estimates that had this tax been introduced in the 2021 and 2022 financial years, over 13 per cent of impacted members would have experienced liquidity stress in meeting the new tax obligations.
“Some small business owners will be forced to sell their business premises to save their business. Selling such assets is typically associated with substantial transaction costs and market timing considerations that are likely to further exacerbate potential losses and introduce other investment risks.”
NFF President David Jochinke said this was a significant group of voices who had raised similar concerns to those which the NFF and COSBOA had called on the Government to address.
“We have long said that we are very concerned about the proposed taxation of ‘unrealised gains’ on holdings proposed in the Bill, with the increased tax obligation likely to place undue financial burden on thousands of small businesses.
“In the case of agriculture and small business, older farmers or business owners will often hold their assets in a SMSF and lease the operations to their children, providing both retirement income for them as well as an opportunity for the next generation to enter the business.”
COSBOA CEO Luke Achterstraat, echoed this and called on the Government to make sensible changes to the Bill.
“This is yet another group of voices calling on the Government to make sensible changes to ensure this Bill does not result in significant financial pressure on family farmers and small business owners.
“A wide range of voices, from financial experts, crossbenchers, farmers and small business, are united in the view that government should do what is necessary to address the unintended consequences on thousands of family-run small businesses before permanent damage is done.
“Doing so will clearly demonstrate that Government supports hardworking small businesses and is not seeking to hit them with a complicated tax that would be introduced when small business insolvencies are at decade highs.”
-ENDS-
For media enquiries or interviews, please contact Luke Achterstraat, Chief Executive Officer, COSBOA on ceo@cosboa.org.au or call +61 (0) 433 644 097.
For National Farmers’ Federation (NFF) call +61 (0)2 6269 5617 or email media@nff.org.au.
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