Around Australia smaller enterprises have really copped it in the neck because the sector has had five ministers in 15 months and none have shown more than a passing interest in the portfolio.
The blows have come via industrial relations legislation designed for large corporations, unfair contracts, increased regulations and many other avenues. But no attack has been greater than the blows landed on smaller enterprises by the taxation commissioner.
We saw in superannuation how Treasury wanted to decimate the movement but were thwarted by a strong superannuation minister (Bill Shorten). Small business has had no such advocate.
In fairness to the tax office, when the commissioner started his attack some years ago there was a lot of abuse in the small enterprise area and the rules needed to be tightened. But having got a taste for blood the tax office made small business savaging a sport with consequent adverse effects on employment in Australia.
I received this email from a person whom I respect, which illustrates the blood lust in the tax office and how it sends the attack dogs in via phone rather than sending initial letters:
“The tax department is getting more and more aggressive. Yesterday a client got a call from the tax department being the first point of contact regarding unpaid tax. The client wasn't even aware that there was an outstanding amount until the phone call and the tax guy quickly threatened that garnishing the account was an option the tax department had.
"I was part of the conversation as it was a three person instant call. It was incredible. It is not even a large amount. When I questioned why a letter wasn't first sent out to inform us, the tax officer said that the tax department ‘always calls people’.
"I challenged him and he said he was new and thought it was the way it was always done. It was a form of bullying and the client said so. It was really quite disturbing.
"Even in the business world when you are chasing money you always try nicely first and then get a bit tougher. Small businesses are already under so much pressure so they really don't need this nasty mode of operation from the tax department. Most small businesses will not pay tax as their first creditor when things are tough but sincerely just need a little time to hopefully be able to pay.”
(I did not delete those last lines of the email because they show the tax office still needs to be firm because small business must pay due tax if solvent).
The new small business minister Gary Gray is a good operator, but his knowledge is in resources (Resourceful Gray gets a small business googly, March 25).
Small Business will have to wait for the Coalition’s Bruce Billson, who knows more about small business than anyone else in the parliament.
If the Coalition wins office in September the tax office will learn a lot of lessons fast. The attack dogs can still be used, but only when there is clear avoidance or procrastination. Small business will begin creating jobs again.