Federal Small Business Joe Hockey has apparently dismissed concerns about serious GST-related cashflow problems crippling smaller enterprises.
A spokesperson for Victorian Small Business Minister Marsha Thomson, who raised the issue at the Small Business Ministerial Council meeting being held in Sydney today, says Hockey rejected concerns aired on behalf of industry groups and supported by survey data.
"Hockey basically said this isn't a major concern for us ... we think everything is alright ... and we have no intention of changing the GST," she says.
"Yet we have had approaches from quite a number of small traders that are facing this issue."
Thomson points out that significant cashflow disruptions are being experienced by some small and medium-sized firms because of late payments for work done, compounded by the relatively short GST compliance period of 28 days.
"The federal government's GST is still hurting some of Victoria's small business operators," she says.
"All too often businesses are left waiting, sometimes as long as 60 days, for payment from recalcitrant clients.
"The GST, however, must be remitted within 28 days of the end of the BAS period, even if the monies have not been received.
"This can cause enormous cashflow disruption and, ultimately, hardship for small businesses with limited financial flexibility."
Thomson says the smash repair industry is a typical example of the challenges faced by small business.
She cites Victorian Automobile Chamber of Commerce surveys that show smash repaid firms often face slow payments from insurance companies, with invoice payments worth tens of thousands of dollars, sometimes taking up to 60 or even 90 days.
"Australia's manufacturing industry has been hurt, with Australian Industry Group surveys reporting a cashflow tightening in small and medium firms, but, bot surprisingly, an improved cashflow for larger businesses," she says.
"Industry groups have proposed GST legislation be amended to allow small business to pass on late penalties to late debtors, or alternatively, extend GST payments from a 28 to 60-day basis.
"The federal government needs to consider all of the options being put forward in order to rectify the imbalance and hardship GST payments are causing for some small businesses."
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