New report raises more questions about Our Plan
The Australian Bureau of Statistics today released the latest issue of 8165.0 – Counts of Australian Businesses, including Entries and Exits, Jun 2008 to Jun 2012. This release raises more questions about the accuracy of some of the claims the Coalition makes in Our Plan.
Our Plan: “There are 11,000 fewer businesses actually employing people now than there were in 2007.”
ABS: Across all businesses, there were 69,920 more business operating at Jun 2012 than at Jun 2008. Looking just at businesses with an annual turnover of <$200k, at Jun 2012, there were 46,453 more than there were in Jun 2008. If you look just at businesses employing at least one person, there are still 449 more businesses now than there were in Jun 2008.
Our Plan: “Small business start-ups have dropped by a staggering 95 per cent”
ABS: Number of entries by businesses employing <20 people in 2008: 89,562. Number of entries by businesses employing <20 people in 2012: 92,452. That’s an increase in entries of a bit more than 3%.
Either some absolutely catastrophic external event happened in the 2007-08 financial year (the GFC perhaps?) or the Coalition got it wrong. Or both.
Our Plan: “The number going bankrupt has increased by 48 per cent. Small business insolvencies instigated by the Australian Taxation Office are up 46 per cent on previous years.”
ASIC insolvency reports: The number of insolvencies as a percentage of businesses has hardly changed since 2002.
And, BTW, the ATO doesn’t instigate insolvencies – the ATO is a creditor for unpaid taxes when a business goes insolvent.The main reported reasons for insolvency over the last ten years are business strategy, cash flow and terms of trade. No otherwise healthy business ever goes under because of its tax bill.
You might also want to read the Parliamentary Budget Office’s brand new report on the real origin of the Budget’s structural problems. To quote the ABC (the only mainstream media source who bothered to report it in detail):
It says the fall in receipts was largely due to the “cumulative effect of the successive personal income tax cuts granted between 2003-04 and 2008-09” – by the Howard and Rudd governments.
The PBO also cites the Howard government’s decision to freeze the indexation of petrol excise and a fall in the consumption of cigarettes, leading to a drop in tobacco excise receipts, as significant factors in the decline of the structural budget balance.
It goes on to say that the structural budget position “showed a sharp improvement” last financial year and it expects a gradual improvement to the year 2016-17, when it will still remain in a structural deficit of between 0.25 and 1.5 per cent of GDP.