A pre-budget poll shows that nearly three quarters of KPMG Enterprise clients are opposed to accessing superannuation to enter the property market and nearly two-thirds believe the recent small business tax cuts would either make no difference to their business or needed to be bigger to be truly effective.
KPMG Enterprise, which advises the mid-market in Tax, Audit and Advisory, surveyed 2,000 clients in its first pre-budget Pulse Check. The 200 who responded in the snap poll highlight the concerns of Small to Medium-sized Enterprises (SMEs), many listed in the ASX 300+.
On the government’s recent small business tax cuts, 40 percent said they would make no difference and 24 percent said further cuts were needed to be truly effective.
Almost three-quarters (74 percent) said that super should be kept separate from home ownership.
Over 40 percent wanted to see an alignment or replacement of state taxes by creating broader-based federal taxes to simplify the tax system.
More than 50 percent said they would be willing to have an increase to the GST rate if the additional revenue raised was spent on income tax cuts to stimulate productivity, or on infrastructure, particularly in regional areas.
On negative gearing, 44 percent of the clients Enterprise surveyed said no action should be taken, but 42 percent argued it should be capped – based either on taxable income or interest claimed. A further 14 percent said it should be scrapped altogether. Most believed the Capital Gains Tax Discount should remain at the current level.
KPMG Enterprise Tax Partner Brett Mitchell said: “These survey results were to be expected in some areas, but are surprising in others. Clearly, our clients believe that superannuation should be kept exclusively as a fund for retirement instead of being used a first step to enter the housing market.
“But we were definitely taken aback that the tax reduction for small business is viewed as either ineffective or not going far enough. It was the Government’s hope that this would act as a stimulus to SMEs to invest in technology or hire more staff, but this hasn’t been perceived as such, according to our survey”.
He added: “It is evident that SMEs are calling for a simplification in the tax mix – the extent of state and federal taxes is viewed as burdensome and over-complicated. More than half of our clients are calling for reform. This is especially pertinent as other countries, such as the United Kingdom and the United States, are already engaged in broader-based tax reduction, which leaves Australia lagging behind.”
“It is interesting that businesses would be prepared to accept a GST increase if the revenue were used for infrastructure projects or increased productivity through income tax cuts. But the overwhelming tone of the survey is that the mid-market is feeling extremely cautious about the future,” said Mr Mitchell.
The pre-budget survey was conducted on 19 and 20 April 2017.
KPMG Enterprise’s client base includes SMEs, family businesses, not-for-profits, startups and high growth ventures.
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