Will tradies be worse off with no company tax cuts?

Ross Greenwood speaks to Master Builders CEO Denita Wawn, who says if Opposition Leader Bill Shorten gets his way, and scraps tax cuts for businesses with a turnover between $10-$50 million, the impact would be “massive”

Introduction: Will tradies be worse off with no company tax cuts?

Ross Greenwood: If Bill Shorten a gets his way and becomes the next Prime Minister, not only has he said that he would scrap tax cuts between 10 and 50 million dollar turnover for businesses there, and as we pointed out before, if you’ve got turnover of 10 million dollars, in other words revenue, that’s not profit that’s revenue, if you are a very low margin business, we talked about petrol stations, supermarkets, whatever it might be, you might only employ 10,000 people, you you could certainly have that sort of turnover. You might not might very much for the family yourself after it’s all said and done. In fact you might lose money occasionally. But then Bill Shorten raises the question as to whether he might also increase the taxes, scrap the tax cuts for businesses between two million and 10 million dollars turnover. Well, that’s getting into Trait’s territory, there’s no doubt about that.

The Chief Executive of Master Builders Australia is Donita Wawn, and bear in mind that the building industry now employees one in ten Australians.

Donita, many thanks for your time.

Interview with: Denita Wawn, Master Builders, CEO

Donita Wawn : Absolute pleasure Ross. Good to be here.

Ross Greenwood:  Okay, so if Bill Shorten were to raise taxes, in other words, repeal tax cuts for businesses between either, let’s say ten million and fifty million dollars turnover per year, and then extended that potentially to businesses between two and ten million dollars turnover per year, what impact would that have?

Donita Wawn:  Massive. You’re talking about 95% of the building construction businesses in Australia that are either motivating size businesses under company tax arrangements or alternatively they’re sole traders, and so equally the income tax divide comes into play as well. This is heartland territory for us.

Ross Greenwood:  And the point eases our side because the building industry is such a large employer, so if we consider at the moment, there’s around about twelve and a half million people in work, so we’re talking about one and a quarter million Australians who potentially are employed in the building trade. Now if they suddenly find that they aren’t getting the sort of if you like competitive benefits they might be, it’s no guarantee that workers will be lost. But it certainly means for those people running those businesses life becomes that little bit tighter.

Donita Wawn:  Absolutely. You know they have been promised and assured because the company tax cuts of up to 50 million have passed Parliament, they are bull, and people are making decisions on that basis. We are a low-margin industry, and they are looking at business projections for the next twelve months to two years. How on earth can you make decisions on reinvesting into your business when you’ve called got parliamentary and politicians making decisions that have dramatic impact. This is just not fair. There have been guaranteed tax relief by a working on that basis, and I just simply cannot be left in the lurch like this.

Ross Greenwood:  So then, are these businesses, you people who, I don’t know, go off to fancy clubs or a smoke cigars, or you know sort of– Are they people who look like fat cats? What sort of people are these that are going to be affected potentially?

Donita Wawn:  We are talking about mom and dad business. By and large, it’s a very expensive proposition working in the building industry. Building products are expensive, but to get to that ten million option, or even the five million turnover, it is pretty simple to do that. We are talking about mom and dad businesses who might employ a couple of apprentices, a couple of site managers, right about 10 employees.

Ross Greenwood:  If they’ve got that five or ten million dollars turnover, what sort of money might they be taking on themselves? I know it depends on what sort of trade they’re in, but are they going to be rolling around in millions of dollars a year?

Donita Wawn:  Absolutely not. You know most of it is to pay your service, to pay your staff, and to pay for your products. These guys are, let’s face it, basic wage earners. They’re earning anywhere between 100, 200 thousand dollars if they’re lucky, just like are the sole traders are as well. These are people that are working hard, they’re aspirational, they’ve usually started out as a trader themselves and their apprenticeship, and they just want to make a go for them and their family. These aren’t people that are what you call high wealth individuals. These are not big companies. These are mum and dad companies that exist around the country.

Ross Greenwood:  Great to have your time on the program this evening. Donita Wawn is the Chief Executive at the Master Builders Australia.

 

 

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