Parramatta Chamber Cool on Rudd’s Spend-Out Package

Parramatta Chamber of Commerce president Mr Roman Dechnicz dismissed lasts week’s Federal Government’s $42billion cash stimulus as, ``pie in the sky stuff. This is just a Band Aid solution”.

The general belief of the Parramatta Chamber of Commerce is that this package does not provide for the long-term development of small and medium business viability and the retention of jobs in this, Australia’s largest employment sector.

Mr Dechnicz further stipulated, “If we are to go into a deficient that we as a nation will have to rectify in years to come better to spend the money on projects that will create jobs, both in primary projects and the small businesses which carve out an existence supplying primary projects”.

The proposed bonus payment of up to $950 to be paid to 8.7 million workers who earned less than $100,000 a year would not solve the financial crisis. It may solve the financial crises at major department stores and a few car dealerships, but it will have minimal effect in keeping Australian small businesses doing business with other Australian small businesses. And that’s the key failing of this package.

“An item of real concern”, Mr Dechnicz says, “is the amount of Parramatta Chamber of Commerce members who inform me that their worst bill payers are government clients, with having to wait in excess of 90 days for 30 day invoices to be settled has become the norm. This is just unacceptable. How can Messers Rudd and Rees stand up and say they support small business when their own departments are starving us of vital cash-flow?”

“Had they been asked, I am positive that many Australian small and medium business operators would have suggested that this stimulus package include a mandatory government agency account payment structure. This would alleviate a significant, government-imposed, burden from business’ cash-flow at a crucial time.” Mr Dechnicz concluded.

And what about hospitals and our disintegrated health system? What greater governmental disappointment has there been in recent years? What should be our infrastructure priorities?

The infrastructure spending in this package involves a major roll-out of $890 million to fix accident black spots, install rail boom gates, repair regional roads and build community infrastructure such as libraries, town halls, community centres and sport centres. As yet, no definitive solution to a health system which is allowing people to die unnecessarily.

The package’s “Small Business and General Business Tax Break” is interesting, however first glances suggest it is not a comprehensive solution while the detail is yet to be released. One initial reaction from a Chamber Board Member noted, “As a small business e.g. who is not planning on purchasing any computers, equipment, would it not be more beneficial to provide them with the equivalent in subsidy towards the salaries of employees?”

A great point which speaks for itself, but it also raises a broader approach. This package could have carried more long-term impact with a tax break for any significant IT or telecommunications upgrade a business undertakes, regardless of whether it falls into “tangible depreciating assets used in carrying on a business, for which a deduction is available under Division 40 of the ITAA97”. The wider the net the more worth in protecting jobs in the IT&T sector while increasing the competitive smarts of our businesses. Integrating this with the announced $950 training and learning bonus would round the package off in this respect by creating a demand and a supply for highly-skilled Australians.

Businesses don’t need to simply buy one computer attracting a $600 tax credit. They need complex office, factory and warehouse computer networks. They need smart, cutting-edge applications to push their business efficiencies higher. They need to expand, setting up effective data and telephone networks between their business sites to support their growth. They need to upgrade vehicle fleets, invest in R&D and acquire expensive plant equipment.

We call for much wider ranging tax credit opportunities for business. We call for cuts to taxes which inhibit business, such as the Capitol Gains Tax in particular. Without the burden of this tax, business would more freely invest in motor vehicle upgrades, entertainment of clients, rewards for staff, business travel. All areas which generate jobs.

The crux is this; the long term viability of a thriving business sector demands a recovery package which is encompassing of all issues with an interlocking approach to its various aspects. Measures such as significant cuts it government taxes and charges, considerable grants for considerable business upgrade/investment projects using Australian suppliers, and for government agencies to pay their private sector suppliers on-time.

~~~~~~ ENDS~~~~~~~~