My Business interviews Federal Small Business Minister Nick Sherry, who sounds off on the GST import threshold, the carbon tax and more in this piece from the September issue of My Business.
The September issue of My Business includes this interview with small business Minister Senator Nick Sherry. We hope you enjoy this preview of the mag!
My Business (MB): Minister, the Productivity Commission’s draft report unto the retail industry has recommended leaving the GST import threshold at $1,000. How do you think retailers will respond to that?
Minister Sherry: I think the critical issue is that the report identified the GST threshold as just one of a significant number of issues in retail trading. It also raises the practical issue of how to collect extra GST. So while the Commission said GST should be a level playing field, the practical challenge is how to collect GST in a cost-effective way.
The final report is due in November, so industry has time to respond with specific ideas.
MB: Readers have told My Business that they feel the Carbon Tax should have included specific assistance measures for small businesses.
Minister Sherry: I think it is important to recognise that small business will not be directly affected by the Carbon Tax. The price impact on energy from the tax and the emissions trading scheme is small, and it is an indirect impact.
Nevertheless, there are a couple of specific measures to support small businesse. One is that we are increasing asset investment write-offs to $6,500. There are also funds for industry organisations to assist with energy efficiency.
MB: Businesses we’ve spoken to worry about the increase in energy prices. Last issue, we spoke to a baker and energy is a very substantial input for that and other industries.
Minister Sherry: There is a direct impact via energy prices, but the other price impacts are not significant. People think the world is going to end on July 1, 2012 when the tax comes in. It will not. The average energy price increase is 10 per cent. Some businesses do have high energy inputs, but the impact is not going to be the end of the world.
MB: How do you think recent international events like the threat of US default, troubles in Europe and stock market turbulence impact Australian small business?
Minister Sherry: There is no doubt that international events are impacting on consumer confidence. When you have headline news about financial disasters and instability in Europe and the US and it appears day after day, it does affect confidence. I live in Devonport — a small regional city — and even people there ask me about what is going on in the world. We need to acknowledge we are not immune, but we must also keep repeating that Australia is in a different set of circumstances compared to America and Europe.
MB: What’s your view on retailers’ use of credit card surcharges?
Minister Sherry: I won’t make any comment beyond the fact that the Reserve Bank is inquiring into it. But I acknowledge that there is a small number of businesses that are charging what is seen to be excessive surcharges.
I experience it first-hand in the course of my work and I have raised an eyebrow when I have seen some surcharges, but it is up to people to make submissions to the Reserve Bank.
MB: How’s the Small Business Superannuation Clearing House going? The Opposition has been very critical of it and the low take-up.
Minister Sherry: Five-and-a-half thousand employers are now in the Super Clearing House and that’s in just the first year of the service. It covers 38,000 employees and there are now $70 million in payments made through the system — 98 per cent of the small businesses are either satisfied or extremely satisfied with the service and take-up is accelerating with more and more publicity.
So there has been an acceleration even though there has been no direct advertising, but there will be mail-outs in the next three months to inform people of the service. The vast bulk of small businesses — certainly in the hundreds of thousands of businesses — will receive a letter. The feedback from those that have used it has been very, very positive, so getting the message out is the next phase.