With just over two weeks to go before the May Federal Budget, KPMG Enterprise has received a clear message from mid-market clients interviewed in a pre-Budget Pulse Check: the government should focus on delivering business tax cuts.
There was strongest support for a high threshold, with almost half indicating that companies with a turnover of up to $100 million should benefit from the tax reductions.
On personal tax cuts there was a pragmatic approach, with almost one in two (46 percent) saying this should occur only after the Budget was in surplus. 38 percent called for personal tax cuts in the next year while 15 percent believed personal tax rates should not be reduced at all.
Other key findings indicate that the mid-market’s sources of vexation or unease remain constant, with competitiveness, dealing with red tape and bureaucracy and the need for ongoing innovation and digitisation (24 percent) as the prime issues for concern.
Notably, despite the government’s instant asset write-off rules promising more cash for SMEs, more than two thirds of respondents indicated they had not utilised the increased threshold, and the majority of those that had, invested in new equipment or technology.
The poll indicated that respondents were uncertain whether current government incentives to encourage innovation in the business sector would impact future operations, with nearly half the respondents believing R&D incentives were not applicable to their businesses, and only 20 percent of the rest deeming them sufficient.
Brett Mitchell, Partner KPMG Enterprise, says the findings capture the mood of the mid-market before the May Budget.
“We asked a selection of mid-market clients a series of topical questions,” he said, “and our Pulse Check reveals a sense of disquiet. Our respondents are worried about profitability and small business viability.
“The prevailing feeling is that Australia remains over-taxed. There is a desire for the government to push the innovation agenda even further and tackle long-standing issues such as red tape and bureaucracy.”
Read the full report – The 2018 Mid-market Pre-budget Pulse Check (PDF 463KB)
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