The Federal Election campaign is now well underway and businesses are no doubt critically assessing how the various policies offered by all political parties will affect them. The Chamber of Commerce is retaining an apolitical stance but offers the following commentary, on the basis of The Good, The Bad & The Ugly on significant policies and how it might impact our members.
Tax cuts for small and medium businesses over the next few years as proposed by the Coalition Government has already been legislated with bi-partisan support from the Labour Party. This is a very good move by both major parties as it will help small and medium business defray some of the rising operational costs and enable more capital to flow into expansion which in turn will create more employment opportunities.
Personal Tax cuts have been promised by both major parties. The Labour Party tax cuts favour lower incomes whilst Coalition tax cuts target middle income earners. In both cases any tax cuts are welcomed as this should improve household discretionary spending which in turn should boost retail spending growth and flow through to our local retailers.
Support for small business has attracted some promises and good initiatives from the major parties. The Coalition has recently announced an Equity Fund of $100m as a source of capital to finance start-ups and expansion by eligible small businesses. The Labour Party has promised to implement protection for small business from unfair contracts whilst also legislating against anti-competitive practices.
A policy position by the Labor Party to abolish tax deductible expenses (so called negative gearing) for existing rental premises purchased post January 2020 and halving the capital gains tax concessions will have a detrimental impact on the property industry according to many experts. An independent report by the Centre for International Economics (CIE) which was commissioned by the Housing Industry Association (HIA) states:
“increasing the tax on residential homes will force up rental prices, worsen housing affordability and reduce economic activity”.
This policy is likely to be of particular concern in Port Macquarie where the Housing and Construction industry employs over 3000 people and contributes $1.5 billion (one third) to the total Gross Regional Product of $4.5 billion.
Energy Policy has been handled poorly in Australia over the past decade due in large part to the emotive issues around carbon emissions reductions. The lack of policy certainty and new investment in power generation has resulted in rising power prices. This is an unnecessary situation for Australia with its plentiful resources and potential mix of traditional power generation, clean coal, gas and renewables such as hydro-electric, solar and wind farms.
The Coalition Government policy is to meet Australias’ global emissions reduction target of 26%-28% by 2030. Meanwhile the Labor Party has put forward a more ambitious emissions reduction target of 45% by 2030. In both cases, despite modelling put forward the future cost to the economy and in particular small business is unclear due to the vagaries of such a complex issue.
There is no clearly defined energy policy that maintains a cheap and reliable power supply whilst transitioning over the long term to low emissions electricity generation. In this policy vacuum the investment needed for new power generation infrastructure will not be forthcoming and consumers will continue to be subjected to supply and pricing uncertainty.
The Port Macquarie Chamber of Commerce is an advocate for business, provides the above policy commentary as a service to its member only and does not endorse any political party over another.
Port Macquarie Chamber of Commerce