What would an early budget and double dissolution election mean for SMEs?

Members of the small business community are calling for the federal government to provide certainty around its tax reform agenda, amid speculation this year’s federal budget could be brought forward by a week.

Each year the federal budget is handed down on the second Tuesday in May and Treasurer Scott Morrison is scheduled to deliver this year’s budget on Tuesday, May 10.

However, Prime Minister Malcolm Turnbull is reportedly considering moving forward this year’s election to July 2 by calling for a double dissolution of the federal parliament.

For an election to be held on July 2, Turnbull would have to call for the poll by May 11, the day after the budget is due to be delivered.

This has prompted speculation the government will seek to bring forward the timing of the budget by one week, to Tuesday, May 3.

When questioned yesterday, Turnbull would only commit to saying “the budget will be delivered in May”, according to the Herald Sun.

Assistant Treasurer and Small Business Minister Kelly O’Dwyer also did not rule out moving the budget forward a week.

“These are all matters to be considered, but we are looking at the ordinary timetable in relation to the budget,” she said.

Turnbull previously indicated the election would be held in August, September or October this year “all other things being equal”.

Path to reform more important than dates

Howard Badger, partner at SME advisory firm Pitcher Partners, said this morning regardless of when the budget is handed down, what matters most is the government commits to a proper tax reform process.

“Frankly it’s at the point where we really just need certainty on tax reform, and we need to address the Australian economy’s growing revenue gap,” Badger said in a statement issued to SmartCompany.

“No one is properly contemplating tax reform for fear of the election and that’s a terrible situation for the Australian economy.”

Badger said neither of the two major political parties currently have a clear and defined position on tax reform, citing the recent speculation around any potential changes to the goods and services tax (GST) as one example.

“We’ve seen the government pull back on GST reform already this year, which is a shame, because a broad-based indirect tax can collect revenue from people who would otherwise not be taxes, such as tourists, and is more effective than income tax in tackling the digital economy than some of the measures proposed,” he said.

“Australia needs to look at its position in the global economy and think about what tax structure results in our economy remaining competitive.

“Failing to address both the level of government spending and the taxation system will put us at a significant disadvantage into the future.”

Small business wants certainty

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this morning COSBOA members understand policy speculation is part of the political process.

However, he says the previous six years in Australian politics have been marked by “a lot of speculation” and uncertainty.

“We want to see some action,” he says.

“The election is going to happen this year … so make a decision and get on with it.”

Strong is concerned, however, that if the government proceeds with plans to call a double dissolution election on July 2, the May budget will become simply a “policy statement” in the lead up to an election instead of an actual budget.