360 Degrees: What to expect from the new government
Asked what they think the new government's priority areas should be, experts in the accounting space reveal their thoughts.
Edward Chan, founder and non-executive chairman, Chan & Naylor
The Morrison government had a historic win on the 18 May election. It was against all expectations and against all leading polls. However, there was a lot of turmoil over the last six years within the Coalition government, as it changed prime ministers and the electorate clearly wanted stability.
So, the first priority is to stabilise the Coalition government with a united party and a strong leader.
Scott Morrison has demonstrated he can be the type of leader the Coalition is looking for to bring the left and right factions of the party together in a united front.
The second priority is to ensure we go back into surplus as forecasted in its FY2020 budget, because without a surplus it will not be able to pay o the country’s $600 billion debt. In order to pay o this debt, it must keep the unemployment rate below 5.5 per cent and to do that it must keep GDP at 2.5 to 3.5 per cent by investing wisely, including infrastructure.
Thirdly, it must implement its election promises including tax cuts to low and middle Australians. An electorate won’t take kindly to broken promises. There has been enough evidence that tax cuts will stimulate the economy as people will be left with more of what they earn and they will spend it in the economy.
The nation’s AAA rating will be maintained by a surplus budget after FY2020 and then the government can focus its sights on various social services.
Finally, ensure that our defence budget is spent wisely as we are faced with increasing potential foreign threats, including cyber security, and maintain a strong border.
Greg Hollands, consultant, Numbers Partnership
Now that the LNP has miraculously been returned to government, the issue arises about what will give it the best value for money in progress over the next three years. There are many issues that the election threw up, but the reality is that there is so much to do and only three years to either do it, or at least have substantial progress to the objective.
I would have thought that the magic word “infrastructure” would be a priority in consideration. Governments appear to have lost the concept of BHAG (big hairy audacious goal), sometimes called vision! We had it with the Snowy Scheme, Warragamba Dam etc, but there has been little infrastructure outside of major cities and regional areas for some time.
The Bradfield Scheme proposed for north Queensland so many years ago might be a good start, at least for a decent feasibility study. If successful, it would have a significant positive economic e ect for regional Queensland, and some would say it might be regarded as “payback” for the very significant support that the LNP garnered during the election.
It would have a positive impact on the Murray-Darling further downstream - it might even eliminate large fish kills, but not necessarily immediately.
I am sure there are other projects that would yield significant benefits as well, but at the very least, the whole issue of infrastructure should be at the forefront of the mind of the new government. But beware, a decision should be made quickly so that progress can be made during the next three years.
Timothy Munro, CEO and founder, Change Accountants
From a business point of view, the government should focus on reducing the dreaded “red tape” that pushes up compliance costs for business owners and in almost all cases delivers a lower benefit than the cost of achieving that benefit.
I would love to see the government start listening to small business (turnover under $2 million) and micro business (turnover under $500,000 and generally under two employees).
Imagine the benefits to small and micro business if the government gave these key areas priority:
E-signatures – Let’s amend legislation across Australia to make e-signing of all documents 100 per cent legal and fully accepted by all government departments and banks, for all transactions.
Create a single source of truth for business addresses - Currently there are far too many places that need to be (separately) updated. ATO, ABN records, ASIC (company details and business names), SRO (State Revenue O ce) etc. Let’s simplify this, quickly.
“Real” tax reform – Until this is done, Australia is just shu ing the deck chairs on the Titanic! The government needs to resonate with the population to help them to understand that increasing the GST to 15 per cent or 20 per cent with a dramatic reduction in personal tax rates to a top marginal rate of 25 per cent and elimination of stupid taxes like FBT and stamp duty will actually lead to more than enough tax being paid to cover government services. Why? It’s not worth it to try to avoid paying tax because the rates would be low.
Simone Palfreyman FCA, principal, Palfreyman Chartered Accountants
The Liberal-National Coalition’s stated policies are to create more jobs, maintain the budget surplus, provide tax relief for small businesses and families, increase investment in schools, hospitals and roads, and keep Australia safe. But are these really their priority areas?
From an accountant’s viewpoint, the new government’s focus appears to be on stimulating the economy to increase job growth and maintain the desired surplus.
The promised increase in the low-and middle-income tax o set, and improvement in tax brackets, will certainly see more surplus cash for individuals and families. Combine this with the $30,000 immediate asset write-o for small businesses, and the economy should see a marked improvement.
Along with this tax focus, the new government has prioritised assisting families and improving the community. The announcement in May of the new First Home Loan Deposit Scheme, e ective from 1 January 2020, will provide a boost to the real estate market by assisting first home buyers to purchase with only a 5 per cent deposit (available for individuals earning less than $125,000 per annum or a couple earning less than $200,000).
With the announcement of $1.7 billion earmarked for state a ordable housing services and an additional $114.9 million for the National Partnerships scheme, a significant improvement should be seen for the homeless and the disadvantaged.
While tax and small business play a major part, for me the focus appears to be on assisting families and improving our communities.