Tax, public sector, infrastructure, skills remain on Budget radar

27 April 2012

Business SA’s Budget submission to the State Government

The State’s leading business membership organisation, Business SA, has based its State Budget submission on 15 key recommendations to increase the competitiveness of the local economy.

Business SA’s State Budget Submission 2012-2013 maintains the spotlight on key issues that have been identified as major concerns for the local business community.

The submission, which has been hand-delivered by Business SA to the Treasurer, focuses on what is critical to the long-term economic sustainability and competitiveness of South Australia’s businesses.

Key recommendations include:

• Establish a Business Advisory Committee on business taxation
• Cut the rates and increase the threshold for payroll and land tax
• Abolish permanent tenure in the public sector
• Implement a “one-in, two-out model” which requires Government to remove two old pieces of legislation for each new one
• Ensure business suppliers are paid within 30 days of invoicing and penalise Departments unable to deliver this
• Lobby the Commonwealth Government to provide funding for a rebate on the first year of payroll tax paid when a business employs a mature aged worker.

Business SA Chief Executive Officer, Peter Vaughan, said that despite the pressure on State finances, the burdens on business could not be ignored.

“We acknowledge that the upcoming State Budget will again be tough, however it must deliver a boost to the local economy,” Mr Vaughan said.

“While the Government has laid the foundation for a Budget that will be restricted from a significant fall in revenue, we have outlined 15 recommendations that will deliver many benefits to South Australia.”

Taxation
“The calls for taxation reform are not new, however budgetary pressures do not lessen the impact of these high taxes on local businesses.

“While the Federal Government refuses to consider GST changes, an independent business advisory committee on business taxation should be established to examine how to improve our local tax regime and recommend a more competitive tax structure.

“South Australia continues to wear the damaging title of having the most uncompetitive taxation system in the country, and implementing relief will deliver many flow-on benefits.

“Current taxation burdens are having a direct impact on jobs, growth and investment, which is concerning as we look to accommodate a mining boom and attract more people to a vibrant and business-friendly State.”

Public Sector
“It has been widely recognised that we still have an over inflated public sector, which is confirmed by the number of excess employees, and a key step must be to abolish permanent tenure in the public service.

“The issues in the public sector do not lie with the front line emergency workers, but the many departments which have these ‘excess employees’ and efficiency issues.”

Red Tape
“While there have been significant reductions in red tape in recent time, there is room for a greater focus on red tape burdens to ensure a more efficient regulatory system.

“A ‘one-in, two-out model’ for new regulation will reduce the overall level of regulation and encourage greater consideration to the most cost-effective and efficient remedy.”

Account payments
“The public sector must pay business suppliers within 30 days, as the delay in making payments is putting pressure on many businesses, who themselves are being faced with rising costs and their own bills to pay. Penalties need to apply to those who cannot deliver.”

Skills and Workforce Development
“With our ageing population and skills shortages, it is essential that the experience and knowledge of our mature aged workers are utilised throughout the economy.

“Payroll tax is a major burden for employers and providing an exemption or a substantial discount on the payroll of a mature aged worker for the first year of employment would provide a significant incentive.

“The greatest way to attract business is to provide a more competitive business environment.

“It is easy to say that relief cannot be provided in the current economic climate, however the flow-on effects from our recommendations will be of benefit to the rest of the economy,” Mr Vaughan said.

Download and view Business SA's State Budget Submission.