How to resolve AdBlock issue? ATO payment change adds mounting pressure on home builders, HIA says
THE Housing Industry Association (HIA) is calling on the Australian Taxation Office (ATO) and Federal Government to reverse the decision to cease accepting credit card payments from November 30, warning the change needs to be viewed against the cumulative financial pressure already confronting residential building businesses.
HIA chief executive for industry and policy, Simon Croft said the decision removed a legitimate payment option used by some businesses to help manage cash flow at a time when builders are being asked to absorb an increasing range of costs, taxes and compliance obligations.
“Residential builders and small businesses more broadly continue to navigate a challenging operating environment, with increased construction costs, wages, insurance, finance and regulatory costs all significantly higher than they were just a few years ago,” Mr Croft said.
“Builders and small businesses are also navigating a growing list of additional cost and compliance pressures.
“Recent and upcoming changes include increases in minimum award wage rates, the introduction of payday superannuation, restrictions on credit card surcharges, higher fuel costs, increases in insurance premiums, and additional costs flowing through from levies and charges applied across the supply chain.
“Businesses are also facing proposals that could significantly increase the tax burden on family-owned enterprises, a reduction in government support for employers taking on apprentices, and an expanding range of regulatory and reporting requirements.
“Each of these changes may appear manageable in isolation, but together they are placing increasing pressure on business cash flow, profitability and confidence," Mr Croft said.
“Combined with elevated construction costs and tighter trading conditions, these pressures continue to make managing cash flow one of the most significant challenges facing residential building businesses.
“Cash flow remains critical for residential building businesses. Builders are often balancing payments to employees, subcontractors, suppliers, insurers and government agencies well before the next progress payment is received from a client.
“While the ATO's decision does not change the amount of tax owed, it removes one of the tools some businesses use to manage the timing of payments and maintain cash flow," he said.
“HIA is calling on the ATO and the Federal Government to reverse the decision before it takes effect on November 30 and retain access to credit card payments for taxation liabilities.
“Removing payment flexibility does not reduce a business's tax obligations. It simply makes managing cash flow more difficult at a time when many builders are already facing significant cost pressures.
“Small and medium-sized builders construct the majority of Australia's new homes. At a time when governments are looking to increase housing supply, every effort should be made to support the businesses responsible for delivering those homes, not impose further costs and complexities on their business,” Mr Croft said.
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