THURSDAY June 27, is World MSME DAY celebrating the existence of millions of micro and small to medium enterprises around the world and the Institute of Public Accountants (IPA) says we should all celebrate.

According to the data provided by the International Council for Small Business (ICSB), formal and informal micro, small and medium-sized enterprises (MSMEs) make up over 90 percent of all firms and account on average for 60-70 percent of total employment and 50 percent of GDP.

The General Assembly of the United Nations, in recognition of the importance of the sector, declared June 27 the Micro, Small and Medium-sized Enterprises Day to raise public awareness of their contribution to the global economy and sustainable development.

“We all know of the critical role that small business plays not just in Australia but across the globe,” said IPA chief executive officer, Andrew Conway.

“With some 75 percent of our members servicing small business or being small businesses in their own right, it is certainly worthy of celebration.

“Our Australian Small Business White Paper aims to create better policy outcomes to strengthen small business productivity which is essential for our economic prosperity and protection of the living standards we currently enjoy,” Mr Conway said.

www.publicaccountants.org.au

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies.  In late 2014, the IPA acquired the Institute of Financial Accountants in the UK and formed the IPA Group, with more than 36,000 members and students in over 80 countries.  The IPA Group is the largest SME focused accountancy organisation in the world. The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants. 

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CONSTRUCTION industry leaders met in Canberra today to urge the Federal, State and Territory Governments to act now to address the building certifier insurance crisis that has potential to bring building and construction activity to a halt. 

Denita Wawn, CEO of Master Builders Australia said, “The leader of Master Builders Associations from around the country are gravely concerned. Up to 30 percent of insurance renewals for building certifiers and surveyors may not be renewed as early as July and construction activity will grind to a halt if a solution is not found urgently.

“Insurers as a result of a number of fires around the world, including the Grenfell fire in the UK, have elevated risk ratings on cladding affected buildings.  They are declining to provide professional indemnity insurance, offering it with unacceptable exclusions or asking for unaffordable premium increases for building certifier professional indemnity renewals.  As a result, certifiers who are needed to sign-off new buildings are being forced to close up shop,” Ms Wawn said. 

“The problem is already causing delays to building projects across the country and will only get worse as more insurers withdraw from the market. 

“We need all governments to come together now to manage what has become a risk for the whole industry caused by the use of combustible cladding on some buildings,” Ms Wawn said. 

What’s needed to avert the crisis is: 

• Establish a national pool of qualified engineers to sign off high risk components.
• Set up a working group to deliver options within six months for funding the rectification of existing buildings with combustible cladding.
• State governments allow for temporary licence exclusions for combustible cladding, specific to aluminium composite panels and expanded polystyrene.

"Master Builders wrote to Building Ministers in April seeking action ahead of the July deadline,” Ms Wawn said. 

“Master Builders around the country are also calling for governments to speed up implementation of recommendations in the Shergold-Weir Building Confidence report to improve access to and the reliability of regulatory requirements for the building and construction sector."

www.masterbuilders.com.au

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EMPLOYMENT in Queensland’s resources sector has added an extra 5,730 jobs over the last 12 months – the equivalent of one new job every 90 minutes according to the latest Australian Bureau of Statistics (ABS) labour force data.

Queensland Resources Council deputy chief executive Judy Bertram said the data reaffirmed the resources sector’s role as a key Queensland employer with new jobs in mining regions and Australia’s biggest mining town – Brisbane.

“This is good news for people working in the resources sector and more importantly people looking for work especially in regional Queensland. The resources sector has hundreds of vacancies looking for men and women to fill,” Ms Bertram said.

“Queensland’s resources sector supports more than 315,000 direct and indirect jobs. Resource jobs are long-term, well paid jobs and can provide education and training to advance employees into the next stage of their careers.

"We want to keep employing more Queenslanders and supporting more regional communities through local investment. To do that, it’s essential that we have clear and transparent rules and regulations.

The Queensland resources sector provides one in every six dollars in the Queensland economy, sustains one in eight Queensland jobs, and supports more than 16,400 businesses and community organisations across the State all from 0.1 percent of Queensland’s land mass.

THE Australian Taxation Office (ATO) today announced that it has received nearly double the amount of referrals from the community about tax evasion compared to the same time last financial year.

The ATO received nearly 60,000 reports of suspected tax evasion, the black economy or illegal phoenix activity from July 1, 2018 to May 31, 2019, which is a 42 percent increase on the volume of referrals in the same time period in the previous financial year.

While not all referrals result in an audit, they help build a more complete view of risk and help us determine if any further action is required.

More than half of all referrals received from were for suspected under reporting of income or about the cash economy, for example businesses demanding cash from customers or paying their workers cash in hand.

The top 5 ‘tip offs’ to the ATO (July 1, 2018 to May 31, 2019) were:

1. under reported income (31%)
2. cash economy (27%)
3. non lodgment (25%)
4. inadequate or no superannuation paid (8%)
5. over stating expenses (3%)

Assistant Tax Commissioner Peter Holt said, “We’re seeing an upwards trend in the volume of referrals about people suspected of participating in the black economy, which suggests that honest businesses have had enough of competitors cheating the system and getting an unfair advantage.

“Going on current numbers, we’re on track to receive over 70,000 community referrals before the end of this financial year. By way of comparison, we received over 51,000 referrals in 2017-18 and that was the highest ever number of referrals received,” Mr Holt said.

"We are committed to supporting business meet their tax and super obligations, and offer a range of resources for businesses to get it right.

"We understand the pressures business owners face in running a business and that sometimes they make legitimate mistakes. The best way to stay on top of your tax and super is to ensure your records are kept up-to-date. Good record keeping will help you complete and lodge your tax returns, manage cash flow, meet your tax obligations and understand how your business is doing."

ATO TAX INTEGRITY CENTRE

The record number of referrals coincides with improvements to the process for letting the ATO know about suspected tax evasion, according to Mr Holt.

The "new and improved" Tax Integrity Centre will be launching on July 1 and will provide a single point of contact for reporting suspected or known illegal phoenix, tax evasion, and black economy activity.

“Our tip-off line is the taxation equivalent of Crime Stoppers for tax. Members of the community will be able to tip the ATO off online or by calling our hotline on 1800 060 062,” Mr Holt said.

"Members of the community can report any known or suspected activity where someone might be gaining a competitive advantage by intentionally doing the wrong thing. This is not just limited to tax issues."

Mr Holt said it involved behaviours such as:

• demanding or paying for work cash in hand to avoid obligations

• not reporting or under-reporting income

• illegal phoenixing – deliberately liquidating and re-forming a business to avoid obligations

• over-claiming deductions e.g. paying for home renovations through their business account.

“We value referrals from the community," Mr Holt said. "Tip-offs are assessed and referred to experienced staff for review to determine if any action is required. Tip-offs help us build a more complete view of risk.

"A community tip-off may be the missing piece of the puzzle that we need to finalise an investigation and seek prosecution action to help protect honest taxpayers. Even if you only know part details, this information is still very useful. It helps us understand industry trends and emerging issues and forms part of our engagement strategies,” Mr Holt said.

"All tip-offs are private and can be anonymous. The ATO does request contact details in case information provided needs further clarification.

“Sometimes we may need to ask you about the information you provided. Leaving your name and contact details can help us to do that. We will only contact you for more information if you tell us it’s okay," Mr Holt said.

“Due to privacy laws, we won’t be able to inform you of the outcome of the information you provide. We also won’t be able to provide you with any updates on progress of the information you provided.

"The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion each year, which is approximately three percent of Gross Domestic Product (GDP). This is money that the community is missing out on for vital public services like schools and roads,” Mr Holt said.

“Businesses that operate in the black economy are undercutting competitors and gaining a competitive advantage by not competing on an even footing.

“Improvements to evasion reporting and analysis of intelligence received are just two of the many ways we’re tackling the black economy,” Mr Holt said.

ABOUT THE BLACK ECONOMY TASKFORCE

The Black Economy Taskforce was established to provide a whole-of-government approach to combat the black economy in Australia. It was established in December 2016 to develop a policy framework involving new proposals to tackle black economy activity. The Black Economy Taskforce's Final Report was released in October 2017.

The ATO plays a significant role in leading and delivering on the Black Economy Taskforce recommendations accepted by the government. Since July 1, 2018, the ATO has coordinated an extensive program of work to tackle the black economy. This program of work includes a multi-faceted approach.

The ATO is responsible for addressing the following aspects of the black economy:

• under-reporting income and over-claiming expenses

• ensuring businesses meet their employer obligations – so they don’t pay employees or contractors cash in hand, underpay wages, fail to withhold tax or not contribute to super

• addressing illegal phoenixing (together with Phoenix Taskforce partner agencies) – deliberately liquidating and reforming businesses to avoid obligations

• preventing tax fraud

• dealing with illicit tobacco, duty and excise evasion

• targeting intermediaries and agents who enable black economy behaviour.

HELP AND SUPPORT

The ATO said most businesses use a registered tax agent for tax advice and to lodge their tax return.

"We also offer a range of learning resources for business operators to understand their tax and super obligations and get it right, including business webinars and workshops," the ATO spokesperson said.

"Businesses can chat with us one-on-one through our Live chat and After-hours call back service. We can also answer general questions via social media or you can join the discussion in our peer-to-peer forum, ATO Community.

ato.gov.au/sbsupport 

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