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Government fears small business support for fightback

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Shadow M inister fo r Small Business, Housing and Customs.

Geoff Prosser M.P. Media Release

30 March 1992


The Government's plan to exempt small business from Sales Tax, reported in today's Financial Review, confirms that they are panicking about the wide level of small business support for the Coalition's Fightback package, including the proposed GST.

Indeed, the real extent of their fear can be seen in this blatently political measure and in the speed with which they want it put into place.

The Government's proposal will not erode small business support for the Coalition's Fightback package simply because it fails to remove all of the other tax imposts from small business, including payroll tax, fuel excise, the training levy and Customs Duty.

It is worth recalling that while some small business may not currently pay the training levy and payroll tax, the cost of these taxes is built into the price of most goods and services consumed by small business. The abolition of payroll tax and the training levy means lower costs for small business.

Moreover, the Government's proposal will not reduce other business input costs because it does not rebate back to small business all of the Sales Tax paid on their inputs, such as commercial motor vehicles (20% Sales Tax), office equipment (20% Sales Tax) and hand tools (20% Sales Tax).

The Government's proposal is politically motivated and has not been developed out of concern for the plight of small business.

If the Government was genuine about stopping the worst decline of small business on record, it would remove all of the cost burdens on business and secondly, it would have adopted these measures 2 years ago.

The small business sector will not be fooled by this blatantly political move and will not take kindly to being used as a political pawn in the Prime Minister's strategy for reĀ­ election.

ends Canberra

Contact: Geoff Prosser

Karen Kuschert (06) 277 4717