In its 2020–21 federal budget submission, the accounting body has recommended the government fund a business advice voucher system of $1,000 per business that can be redeemed for business advice with their professional business adviser.
It has been estimated that the recent bushfires have so far had a direct negative impact on over 200,000 small businesses.
CPA believes access to advice is key for these businesses as they look to recover as quickly and expeditiously as possible, but has warned the government that many of them will not be able to afford it.
“Failure to receive professional advice during the bushfire recovery period may negatively impact the recovery of these businesses and the communities in which they operate, their employees and their families, as well as future government tax revenues and the broader Australian economy.
“Accordingly, to assist businesses to recover from the bushfires, CPA Australia proposes the government fund a business advice voucher system of $1,000 per business that can be redeemed for business advice with their professional business adviser,” CPA said.
Acknowledging the cost of such a measure, CPA said it “is not high” when compared to the fact it will be repaid multiple times from future tax revenues paid by these same businesses and their employees.
CPA is also advising the government to increase the money left in the pockets of small business, by reducing or completely removing the various fees it imposes.
According to CPA, the government should reduce or completely remove fees imposed under ASIC’s industry funding model, fees imposed by the Tax Practitioners Board on tax practitioners and the fee imposed for ASIC registry searches.
“In putting this recommendation forward, CPA Australia is not suggesting that the funding to these regulators be reduced. The government should replace the lost revenue from fee income with direct public funding,” the body said.
It also noted that in absence of a cut to the corporate tax rate, the introduction of a broad-based investment allowance, applicable to all investment depreciable under current tax law, can lead to an increase in business investment. This, it believes, should in turn assist in improving productivity over the longer term.
“For simplicity, such an investment allowance should be broad and leverage existing concepts in tax law. That is, Division 40 of the Income Tax Assessment Act 1997 could be used to set the scope of the allowance,” the body argued.
Small businesses could also be supported by making the instant asset write-off a permanent feature of the tax system, CPA opined.
“The annual extension of the instant asset write-off creates uncertainty for small business, particularly where the amendment to the law is passed after its commencement date. Making it a permanent feature of the system would remove that uncertainty,” it explained.