West Australian small and medium-sized enterprises (SMEs) are overwhelmingly crying out for a more competitive tax rate for larger businesses to boost our State’s struggling economy.
This is the result of a business survey conducted by the Chamber of Commerce and Industry WA (CCI), asking almost 300 WA businesses to give their view on the Federal Government’s proposed tax rate cut from 30 per cent to 25 per cent for businesses with a turnover of more than $50 million.
Australia’s top company tax rate is the fifth highest in the OECD and nine per cent higher than the average rate in Asia – our largest trading region.
Cutting the company tax rate for larger businesses is more important to WA SMEs than infrastructure funding, lower energy prices or a reliable NBN service.
Half of WA SMEs surveyed depend on the success of larger businesses for their own livelihood. For those businesses, extending company tax cuts is the most important issue ahead of the upcoming Federal election, second only to a stronger economy.
Seventy-two per cent (72%) of WA SMEs believe Australia would be more internationally competitive when attracting investment if the company tax rate for larger businesses was reduced, and 71 per cent believe larger businesses would be more likely to increase local investment.
Two out of three (68%) SMEs businesses believe the cut would benefit the WA economy, over half (58%) believe it would result in larger businesses taking on more workers and one-third (32%) would hire more workers themselves and increase wages (31%).
The WA economy is highly dependent on overseas investment. To ensure our businesses can get ahead and continue to employ four out of five West Australians, they must be freed from the tax chains that are weighing them down.
We know that the number one concern for WA business is a stronger economy and almost half (48%) of SMEs believe cutting the top tax rate will flow through the supply chain, creating more profitable contracts for smaller businesses.
The mining sector has been WA’s lifeblood for decades. Attracting the scale of investment required to underpin new mining projects is a global game so it is crucial that our company tax rate is competitive to help create jobs in our State’s time of need. Seventy per cent (70%) of WA mining businesses believe that that there should be tax cuts for larger businesses and 90 per cent believe it will benefit the WA economy.
Higher taxes on business means we lose out on potential global investment. For Australia to be a global leader both economically and socially, our businesses must be able to compete on the world stage.
CCI is calling on all Senators to pass the Government’s company tax cuts in its current form. If we want to attract global investment we must be competitive. If we fail to get this right, we risk our prosperity.
*All comments are attributable to CCI Chief Executive Officer Chris Rodwell.