Regulatory Roundup – July 2013
Small businesses to face “triple whammy” of new costs come July 1, 2013
The Australian Chamber of Commerce and Industry (ACCI) has warned small businesses to ready themselves for an onslaught of new costs come July 1, 2013, after the Fair Work Commission increased award wages by 2.6% per week. ACCI chief executive Peter Anderson said the decision is a “body blow” to the tens of thousands of small businesses that are not in the fast lane of the economy and referred to a “triple whammy” of new costs – the wage rise, a superannuation levy rise and for retailers, penalty rate rises.
Businesses with highest and lowest survival rates revealed: McCrindle Research
Non-employing sole trader start-ups in the Northern Territory, Queensland and Victoria with a turnover of less than $200,000 are the least likely businesses to survive 2013, according to a new study by McCrindle Research. According to the study, healthcare and social assistance, mining, and the financial and insurance industries have grown the most in the past year, while agriculture, forestry and fishing, manufacturing, and accommodation and food services reported the greatest decreases.
Australian businesses hit with 8th highest tax rate: Study
Compared with many other countries, Australian businesses have been shown to be labouring under the eighth highest corporate tax rate in the world. Countries with a lower corporate tax rate than Australia include Britain (at 20%), China and Malaysia (each 25%), and Ireland (at an enviable 12.5%). Then there is the United Arab Emirates, which does not charge corporate taxes at all. At the other end of the scale is Japan, which levies corporate tax at 38%, and Brazil at 34%. India mirrors Australia’s 30% company tax rate, as do Cuba and the Philippines.
Proposed 457 visa charges set to hurt already struggling businesses
In an open letter to the government, key industry groups decried the proposed changes to the 457 visa scheme and said businesses – especially those in the trades and technicians categories – will suffer greatly if the changes are passed. The industry groups raised concerns at the lack of evidence, damaging rhetoric, unsubstantiated assertions, and poor process associated with the proposed changes. “At a time when Australia ought to be pulling out all stops to ensure the economy is firing strongly on all fronts – which means being able to fill critical skills needs in a timely and efficient way – we should not be rushed into major labour market changes which risk discouraging investment, job creation and economic growth,” the open letter said.
Australia loses out only to the US as best place for female entrepreneurs
Australia is the second best place in the world to be a female entrepreneur, according to Dell’s inaugural Gender-GEDI Female Entrepreneurship Index. Out of 17 countries, US ranked the highest followed by Australia, Germany, France and Mexico. Australia ranked well on the following fronts:
- high ratio of female to male start-ups (85:100) compared to the US (71:100)
- more Australian female entrepreneurs are highly educated compared to the overall percentage of the female population, and
- percentage of Australian women with a bank account is close to 100% – important because access to a formal bank account is a precursor to financing (bank loans, credit lines and so forth).
Small businesses still in the dark about instant asset write-off
Almost a third of small businesses remain unaware of the instant asset write-off, according to a survey by MYOB. According to the survey,
- 29% of small businesses were unaware of the instant asset write-off
- 31% said they would “maybe use” the write-off
- 22% had not used or did not plan to use the write-off, and
- 17% had already used or planned to use the write-off.
Ailing manufacturing sector receives the most government help
The manufacturing sector has been struggling, according to various reports, but a recent study showed that the sector receives the highest level of government industry assistance – mainly in the form of tariff assistance on outputs. Outside the manufacturing sector, horticulture and fruit growing as well as forestry and logging received positive net tariff assistance in 2011-12. Conversely, mining and construction, as well as other service industries and most primary production industries incurred negative net tariff assistance.
Discounting is no longer the “new norm” – Dun & Bradstreet
More businesses plan to raise the prices of their products compared to the previous quarter, according to Dun & Bradstreet’s National Business Expectations Survey for March quarter 2013. With an increase in prices planned, the survey said businesses have also raised their profit outlook for the September quarter ahead. The increased expectations coincided with the Australian dollar hitting a 19-month low, as the high Australian dollar through 2012 and early 2013 affected the profitability of many businesses.
More than 75% of Aussie businesses “would do it all over again”
A recent study shows that 77% of Australian entrepreneurs would do it all over again if given the chance. The largest proportion of Australian businesses that would were in media and marketing (81%), and consultancy and services (80%) while the largest proportion of those that would not were businesses in manufacturing and production (38%), and healthcare and medicine (36%). That aside, the number of Australian small businesses that would dive right back in pales in comparison to countries such as Netherlands, Germany and Mexico where the figure tops 90%.
Research confirms what you probably know – admin is a time waster
A recent study commissioned by small business accounting services firm Intuit Australia found that tasks such as keeping records of transactions, completing business activity statements (BAS) and other tax reporting as well as organising to pay bills and wages consumed the most time for Australian small business owners. According to the study, small businesses spend about a third of their time on average dealing with administrative tasks, rather than focusing on the core of their business. More than 750 small business owners completed the survey and 57% of them ranked keeping a record of transactions as the task that soaked up most of their time.