A majority of mid-market companies (52 per cent) believe business tax cuts should be prioritised over personal tax cuts, according KPMG Enterprise clients involved in a Pulse Check on issues in the run-up to the Budget.
There was strongest support for a high threshold, with almost half saying that companies with a turnover of up to $100 million should benefit from the tax deductions.
On personal tax cuts there was a pragmatic approach, with almost one in two saying this should occur only after the Budget was in surplus. Over a third called for personal tax cuts in the next year, while 15 per cent believed personal tax rates should not be reduced at all.
Other key findings indicate that the mid-market’s sources of vexation or unease remain constant, with competitiveness, dealing with red tape and bureaucracy and the need for ongoing innovation and digitization (24 per cent) as the prime issues of concern.
Notably, despite the Government’s instant asset write-off rules promising more cash for SMEs, more than two-thirds of respondents indicated that they had not utilised the increased threshold, and the majority of those that had used the money to invest in new equipment or technology.
The poll indicated that respondents were uncertain whether Government incentives to encourage innovation would impact future operations, with nearly half of them believing Research and Development incentives were not applicable to their businesses, and only 20 per cent of the rest deeming them sufficient.
Brett Mitchell, Partner at KPMG Enterprise, said that the findings capture the mood of the mid-market before the May budget.
“Our Pulse Check reveals disquiet. Our respondents are worried about profitability and small-business viability, he said.
“The prevailing feeling is that Australia remains over-taxed. There is a desire for the Government to push the innovation agenda even further and tackle long-standing issues such as red tape and bureaucracy.”