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Wednesday, 28 March 2001
Page: 25934

Mr FITZGIBBON (7:56 PM) —In the time remaining to me tonight, I want to reflect briefly on the impact of the GST on small business and, in particular, on an announcement from the Prime Minister last night while speaking at the gala dinner of the small business summit held here in Canberra, organised by a reputable organisation known as COSBOA. The gala dinner was held at the Hyatt Hotel, as was the summit. Last night was, I suppose, a desperate attempt to claw back or win back at least part of the small business constituency—a small business constituency which has been hit hard by the introduction of the GST. We have seen that in both a number of surveys of late and, unfortunately, by way of a number of small business exits. Some people have unfortunately become insolvent or gone out backwards. Others, after many years in business and facing so much massive change, have just decided that their businesses do not have the profitability to wear the impost of this new tax system and all the burdens that come with it and have simply decided to walk away from their small business—often a small business that has been in the family for generations.

Last night the Prime Minister made what he portrayed as a significant announcement. That announcement was the extension of access for some small firms to what we know as the simplified accounting method—SAM. The simplified accounting method allows a firm which retails both GST related and non-GST related goods to take a snapshot of their operations. It means that, rather than go through the additional complexity of differentiating between the sales, they can just take a snapshot, determine what percentage of their goods is GST related and non-GST related, apply that average and remit on that basis.

When the simplified accounting method was announced, the government determined that it would apply to all firms with a turnover of $1 million or less ad infinitum—that is, forever—but that there would be a transitional period for firms with a turnover of between $1 million and $2 million. I think the further qualification was that those firms would be able to access the scheme only if they did not have in place scanning systems for their retail goods.

Last night the Prime Minister announced that he would extend access to the simplified accounting method to those firms with a turnover of between $1 million and $2 million ad infinitum. That was portrayed as a big announcement. Can I tell you that that will bring no benefit to the overwhelming majority of small firms and will bring little benefit to those in that turnover range who have been enjoying that facility for 12 months now—a facility which has brought them very little relief.

Mr SPEAKER —Order! It being 8 p.m., the debate is interrupted.