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Small business tax avoiders costing Australians billions

THE ATO Small Business Tax Gap report released today highlights a $11.1 billion tax gap, almost two-thirds (64%) of this credited to black economy behaviour such as not declaring income, workers paid cash ‘under the table’ or exaggerating expenses.

Some 71 percent of small businesses reported their tax correctly and a further 18 percent attempted to report correctly but made mistakes, mainly due to poor record keeping or human error. 

For the more than four million small businesses in Australia, it is essential to have proper records in place for tax time, so they can substantiate and justify all claims.

Australian tax leader at Chartered Accountants Australia and New Zealand Michael Croker said the report is a warning to the millions of small businesses now completing their 2019 income tax returns to ensure documentation is complete and accurate.

“We are pleased to see that the ATO has found Australian small businesses use tax professionals more than those in countries that have reported a larger tax gap,” said Mr Croker.

“It is important to ensure that all income is recorded and that private components of an expense are not inadvertently claimed as a business expense. It is also essential for businesses to disclose all financial transactions to your Chartered Accountant to ensure you are compliant. 

“Businesses that do not accurately share their claims need to consider that the ATO has considerable powers to investigate, claim money back and penalise.”

The impact of the few businesses that are participating in the black economy is enormous. 

“This is not 'their' money, it’s Australia’s money, and each incorrect claim adds up to billions being diverted from Australian services and infrastructure,” said Mr Croker.

“The black economy places undue and unfair competitive pressure on the majority of small business operators who are doing the right thing.

“The Black Economy Taskforce made a number of recommendations to reduce the impact of the black economy and this report certainly gives the argument credence. 

“The anonymity of cash ensures those participating in black economy remain under the radar.

“An extremely conservative RBA estimate shows that $1 billion is warehoused by the black economy with a further $5 billion used for operational purposes which represents up to 8 percent of bank notes in circulation," he said.

“Implementing a ban on cash transactions of $10,000 or more will make it more difficult to operate in the black economy with very limited impact on those who prefer cash and operate within the regulatory systems.”

 

About Chartered Accountants Australia and New Zealand

Chartered Accountants Australia and New Zealand is a professional body comprised of over 120,000 diverse, talented and financially astute members who utilise their skills every day to make a difference for businesses the world over. Members are known for their professional integrity, principled judgment, financial discipline and a forward-looking approach to business which contributes to the prosperity of our nations. 

www.charteredaccountantsanz.com

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Queensland resources ready to deliver through more trade with India

THE Queensland Resources Council (QRC) has welcomed the release of the Australian Government’s Coal in India 2019 report, reinforcing the enormous potential for new jobs and economic benefits through expanding our resources trade with India.

QRC chief executive Ian Macfarlane said Queensland was in the ideal position to make of the most of the opportunities through more trade with India.

“Queensland should keep playing to our strengths.  And that means seizing the opportunities to meet an expanding market for coal and other Queensland commodities,” Mr Macfarlane said.

“The Australian Government Coal in India 2019 report underlines the potential jobs, export and royalty tax benefits from expanding Australia’s thermal coal exports to India, with more than 4000 new direct jobs forecast for regional areas.

“It makes sense to export Australia’s high quality coal for use in global markets, because our coal has a higher energy content and produces lower emissions than coal from other exporting nations," he said.

“By creating stronger trading partnerships with India, Queensland can help deliver a range of commodities that India needs to grow and deliver a higher standard of living for its people, and at the same time benefit every Queenslander.

“There are opportunities for the expansion of both thermal and metallurgical coal exports to India," Mr Macfarlane said.

“India is already Queensland’s third largest customer for coal, behind China and Japan.  In 2018 the total value of Queensland coal purchased by India was $9.5 billion.

“India is now the world’s second largest steel producer, and Queensland’s world-leading metallurgical coal is helping power that growth. In 2018, India was the largest buyer of Queensland metallurgical coal.

“There are also rich new opportunities for the export of Queensland zinc, gold and LNG as a result of India’s continuing economic growth and urban development. For example, India’s demand for zinc is forecast to grow by 7.6 per cent each year to 850 million tonnes in 2021," Mr Macfarlane said.

“New resource projects and new markets for Queensland commodities means more jobs, more investment and more money paid back to Queenslanders through royalty taxes.

“QRC looks forward to further strengthening the trading partnership between Australia and India, and in particular between Queensland and India.”

www.qrc.org.au

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Australia's two treaties in three cities Parliamentary committee spotlight

THE Joint Standing Committee on Treaties will be holding hearings on the Hong Kong and Indonesia free trade agreements in Sydney, Melbourne and Perth in the coming weeks.

Committee Chair Dave Sharma MP said the hearings would be the first opportunity for public consultation on the agreements since they were signed some months ago.

“In an international environment in which protectionism is gaining a foothold, it is now more important than ever for the Parliament to engage with Australians on free trade,” Mr Sharma said.

“These public hearings will be important in informing the Committee’s views on whether the agreements are in Australia’s national interest.”

The hearings will enable community groups; peak bodies representing business, exporters, education institutions and employees; along with academic experts, to talk to the Committee about the two agreements.

Programs for all three hearings, including lists, are available on the Committee's website

Public hearing details

SYDNEY

Any members of the public wishing to attend this public hearing can register interest via e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. by 2pm Friday, 23 Aug 2019.

Date: Monday 26 August 2019
Time: 9am to 4pm
Location: Meeting Room 1, Level 21, Commonwealth Parliamentary Office, 1 Bligh Street

Click here to view the full program. 

MELBOURNE

Date: Tuesday 27 August 2019
Time:       9am to 4pm
Location: Committee Room G6, Ground Floor, 55 St Andrews Place

Click here to view the full program.

PERTH

Date: Monday 2 September 2019
Time: 9am to 4pm
Location: Anglesea Room, Mercure, 10 Irwin Street

Click here to view the full program.

The hearings will be broadcast live at aph.gov.au/live.

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National Skills Week kicks off with a focus on 'real skills for real careers'

THE Global Apprenticeship Network Australia (GAN Australia) today announced National Skills Week will kick off 26 August.

During the week, GAN Australia will showcase apprenticeships and the way they can not only help students find their ideal career, but also they can help to address Australia’s skills shortage.  The purpose of the week each year is to celebrate and inform students and the wider public of the diversity and career pathways available through Vocational Education and Training Sector (VET), with announcements of emerging trends and new growth drivers connecting skills training with job outcomes.  

The theme for National Skills Week 2019 is Real Skills for Real Careers.

Gary Workman, GAN Australia’s executive director, said, “This is a great time to celebrate our successes, but it’s also the perfect time to highlight how apprenticeships can help students identify areas where there are jobs.  

"More than 65 percent of our youth go straight into university from secondary school without understanding the employment and career pathway options that are available.  We know that the majority of college graduates will not find jobs in their area of study.  We also know that Australia is suffering with serious skills shortages.

“We are in the process of establishing a national steering committee that will meet on 19 September and we invite any interested businesses to join us.  The steering committee will tackle current issues and promote best practices for two key areas.  The first is to help businesses attract and retain staff in a tough, ever-challenging business environment.  And at the same time, address youth unemployment.  

"The national youth unemployment average is 11 percent, but it can be as high as 28 percent in pockets around Australia.  Apprenticeships can help to solve both of these issues."

GAN brings businesses together to identify skill shortages where the apprenticeship model can help young people fulfill these shortfalls.  The move supports Australian companies in offering apprenticeship and traineeship opportunities, which have been on the decline.  Commencement numbers have been falling for the past four years and completion rates remain stubbornly low at the same time as Australia’s need for targeted, skilled workers continues to grow.

Apprenticeship programmes are vital to fulfilling employers’ needs and lowering youth unemployment in the future, according to GAN:

  • They ensure that trainings matches the needswithin a company or industry.
  • The programmes keep employers and employees up-to-date with changesin technology, work practices, and market dynamics.
  • They link classrooms and workplace training so that young people acquire relevant skills.
  • They equip young people with critically important core skills, such as problem solving, teamwork, and communication.
  • They offer young people an income and real work experience. 
  • They help young people clear the hurdle of having no job experience, a barrier that prevents many other graduates from securing their first job.

 

About Apprenticeship Employee Network (AEN)

The Apprenticeship Employment Network (AEN) is the peak industry body representing not for profit group training companies across Victoria and is part of a national network of group training associations.  This national network employs over 25,000 apprentices and trainees, Australia’s largest employer of apprentices and trainees.

Within Victoria AEN through its members, employs over 6500 apprentices and trainees across all industry sectors, which is supported by a network of 10000+ host employers – small to medium size businesses. AEN provides support and leadership to its members in the areas of advocacy, negotiation and policy setting at both the State and National level. These functions are achieved by working with governments, industry, as well as individual enterprises.

The core activity of the members of AEN is the employment and vocational training of young people to the levels and in the method set out in the Australian Qualification Framework. AEN is unique in that it represents a network of companies which not only spans the state of Victoria but represents an integrated network that has developed in a planned and structured way. The enduring asset achieved as a result of this planned process is a well-developed and cohesive communication network. Since AEN’s inception this communication network has developed so that it can deal with both operational and policy issues, and can do this at all levels of group training operation.

In addition to supporting the needs of its constituent member companies, AEN provides a variety of support to small business and to schools. Over the past few years AEN has played a major role in the development of Vocational Education and Training (VET) in Schools and is an active promoter of school based apprenticeships.

About GAN Australia

The GAN is a business-driven alliance with the overarching goal of encouraging and linking business initiatives on skills and employment opportunities for youth - notably through apprenticeships. The GAN is a network where private sector companies, business federations and associations come together to share best practices,to advocate and to commit to action around youth employability and skills development. The initiative is driven by business leaders, who use this global platform to promote apprenticeship and internship programmes worldwide. They reach out in their respective countries and industries to mitigate the youth unemployment and skills mismatch crises. At the same time they strengthen their companies' competitive strategies by investing in their workforces.

 

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New Century Zinc agreement highlights royalty role in resources investment, employment

THE Palaszczuk Government’s first Royalty Deferral and Repayment Agreement to support the development of New Century Zinc Mine should be a model for other projects to attract more investment and create more jobs, Queensland Resources Council (QRC) chief executive Ian Macfarlane said.

Mr Macfarlane said the agreement was under the State Government’s 2017 Resources Regional Development Framework for new developments in the North-West Minerals Province and Galilee and Surat basins and QRC welcomed the government’s acknowledgement it would “provide a precedent for similar arrangements in the future”.

“The resources sector is projected to pay more than $5.4 billion – or more than $100 million every week - in royalty taxes to the Queensland Government this financial year,” he said.

“Royalties paid to the Queensland Government have more than doubled over the last five years, up from $2 billion in 2014-15.

“The agreement means royalties will be paid in full and with interest, but it also recognises the role of flexibility in application of a stable royalty policy can support the development of new projects, generating new investment, new exports and new jobs for Queensland.”

Mr Macfarlane said projects can also support the development of common-user infrastructure, such as with the New Century Zinc project the continued dredging of the Port of Karumba, making the Port available for other commercial users including the cattle industry.

Deputy Premier, Treasurer and Minister for Aboriginal and Torres Strait Island Partnerships Jackie Trad said New Century was a great example of what the RRDF can achieve.

www.qrc.org.au

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