‘False premise’ for GST decision

A group of small business owners in the City of Swan area have been very vocal with their concerns that the "the state-based GST hijacking has left them with nothing left to fight with" to keep their businesses open.

Despite Federal ministers killing off the option to increase GST revenue in order to cut the budget deficit, business owners are still confident they can make good on the new write-offs for small business owners.

The proposal for a new charge on internet shopping that could have raised hundreds of millions of dollars was rejected by Cabinet members.

The decision was dropped amid concerns that it would be seen by the public as a cash grab and hurt consumers.

Ministers reportedly quashed the idea with fears it would leave the Prime Minister vulnerable to calls he had broken his pledge to keep taxes low.

Brian Simpson, Morley business owner and vocal West Australian campaigner for an equal playing field on imports with the GST, said the Cabinet decision was based on a false premise.

"It is not a new tax nor is it an increase in the GST," Mr Simpson said.

"The main idea is to get rid of the dodgy invoices from overseas which lower the amounts of purchases and if the threshold was zero, there would be no more invoices containing these false figures."

Eddie Peters, owner of the Honda Shop in Midland, said he welcomed the budget announcement as it was a step in the right direction.

Mr Peters said he was delighted that some small business owners would need to upgrade old or poor equipment and could write it off immediately. "Tradespeople will welcome this announcement with open arms," he said.

"We still need to stimulate the economy enough so that these small business owners can turn a profit as many of them don't at the moment but once they do, the reduction in tax to 28.5 per cent is also a welcome move for them.

"This will definitely help to stimulate the economy," Mr Peters said.

Federal Member for Pearce Christian Porter, who has been vocal on this issue to help small business owners in WA, said the Coalition Government had done its best to listen to the concerns of small business owners and try to help them to stay in business through a reduction in red tape compliance and new initiatives.

Meanwhile Mr Simpson said the new measures were of no assistance to his business.

A member of the Swan Chamber of Commerce, Mr Simpson said he was not making enough money to buy any new equipment.

"You need cashflow to buy new products you can write off and Im not making any money so there is nothing we can buy.

"It's not helping me at all," Mr Simpson said.

Mr Simpson moved premises from Rivervale to Morley recently to save money on his business, Perth RC Models and Hobby shop.

In 2008, he employed 12 members of staff. Now he is down to one.