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Labor's BAS rip-off.



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THE HON TONY ABBOTT MP

MINISTER FOR EMPLOYMENT, WORKPLACE RELATIONS AND SMALL BUSINESS

 

Media Release

4401

Labor's BAS rip-off

Labor’s promised simplification of the Business Activity Statement (BAS) will result in small businesses paying too much GST without recourse to reconciling their true GST liability.

Mr Crean’s proposal has the hallmarks of an ACTU leader’s understanding of small business.

To offer all small businesses the ability to calculate GST liabilities using a ratio based on previous net GST paid whilst Labor rolls back the GST leaves open the possibility that small businesses will pay more GST than what their actual liability amounts to under a rolled back GST.

Under Labor’s promised method, small business would have no way of knowing the degree of their overpayment because Labor will not allow small businesspeople the opportunity to complete an annual reconciliation.

For instance, if a Newsagent opts to use Labor’s method based on the GST paid in Financial Year 2000-01 for Financial Year 2001-02 at the same time as Labor exempts books from the GST then the number of items upon which the Newsagent collects GST will fall.

The ratio the Newsagent uses however will be based on a broader range of products resulting in a higher GST payment than is actually required.

Labor has trumpeted the removal of the need for an annual reconciliation as a step toward simplification.

In fact all this will do is increase uncertainty and take extra cash out of small business through GST payments for which the firm is not actually liable.

On the basis of Labor’s announcement it is now clear that there are three stings in Labor’s Rollback for small business - greater uncertainty, higher compliance costs and an overpayment of GST liabilities with no recourse to reconcile the true liability.

Labor’s proposal is dishonest, ill considered, and it will impose a burden on small business.

Ends

 

For further information contact:

Scott Reading 0419 418 793

 

 

1/06/2001