Pitcher Partners Welcomes Tax Cuts For Middle Market

By John Brazzale - May 3, 2016

Pitcher Partners has welcomed the Turnbull Government’s acknowledgement that small to medium business is the engine room of the economy.

“We’re extremely pleased to see a 2.5% cut in company tax for businesses with under $10m in revenue,” said John Brazzale, Managing Partner at Pitcher Partners.

“And we’re even happier to see a clear pathway to a 5% corporate tax cut, phased in over the next ten years for all businesses. 

“The phase-in period is a realistic and sensible way to address the issue of providing meaningful tax cuts to Australian businesses while charting a path back to surplus.

“The government should also be given credit for acknowledging the red tape and compliance issues that bog down the middle market. The Budget does a lot to deliver relief in this area.  

“In particular, the government has taken steps to overcome the complexity of Division 7A rules that have had a huge impact on mid-market business’ ability to re-invest profits into growth-promoting avenues.

“And for smaller businesses, changing the turnover threshold to $10 million and applying the further $20,000 asset write off to this group of taxpayers will be a welcome development.”

John Brazzale also praised the government’s infrastructure commitments.

“We’re happy to see a focus on genuinely productive, targeted spending in the Budget.

“In particular, the billions of dollars in infrastructure commitments should encourage investment in nation-building projects that help businesses to move goods, services and capital around the nation. 

“The direct and indirect job creation that stems from these infrastructure investments will stand Australia in good stead as it transitions out of the mining boom.”

John Brazzale highlighted superannuation and changes to multinational tax arrangements as potential red flags for business.

“We are concerned about the impact of superannuation contribution tax changes. There’s a significant amount of revenue raising over a broad range of measures and this will necessarily impact on the middle market and Australians’ retirement strategies.

“The voluntary savings element of the superannuation system, which has been a long term pillar designed to promote self-sufficiency, has been destroyed.

“The point of superannuation is to encourage long-term saving and reduce reliance on the government pension. Our concern is that the proposed changes significantly erode individuals’ capacity to self-fund their retirement. 

“These changes are a dangerous precedent for confidence in the superannuation system, seriously undermining integrity.

“On the government’s efforts to target tax avoidance, our biggest concern is that the funding of the Tax Avoidance Taskforce signals a shift from an engagement model of compliance to an audit model.

“Tax compliance works best when the Tax Office, businesses, and Australians collaborate; we would need to see further detail on the rollout of this taskforce to ensure that the engagement model remains the primary method of ensuring tax compliance.”

For further comment please contact:

John Brazzale, Managing Partner, Pitcher Partners, 03 8610 5110
Sabine Wolff, Media and Communications Advisor, 0419 529 577

 


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IN THIS SECTION:


Rob Southwell

Sydney

Managing Partner and Partner – Private Clients Group


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Michael Minter

Newcastle

Managing Partner


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John Brazzale

Melbourne

Managing Partner and Partner/Executive Director - Tax Consulting


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Bryan Hughes

Perth

Managing Director


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Ross Walker

Brisbane

Managing Partner and Partner - Audit and Risk Assurance


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Tom Verco

Adelaide

Managing Principal


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