“I see people on social media complaining about increased prices without necessarily understanding the pressures on small businesses.” Chartered accountant GAIL FREEMAN worries about the effect of recent imposts on small business.

Long service leave originated in Australia in the 1860s. It was originally designed so public servants could travel back to Britain.

It was calculated as five weeks to get there, three weeks holiday and five weeks to get back.

In the 1940s and 1950s it was expanded to the private sector through industrial awards and state legislation. Based on history, it might now be outdated.

The reason I start with this is that from July 1, the portable long service scheme in the ACT is expanding to include workers in hairdressing, accommodation and hospitality.

From the employer’s perspective, this means an extra 1.07 per cent on the gross staff payroll at a time when small business is already seriously hurting.

The portable long service scheme has been in the building construction industry, the community sector and the security industry for some time. It was recently introduced into the contract cleaning industry. Employers will need to register for the scheme and there are penalties for not registering and for paying late.

The Fair Work Commission has also announced changes to junior wages. That is, changes to staff pay rates for those aged between 18 and 21. While staff under 18 will continue to be paid a percentage of the adult rate, those over 18 will be paid the full adult rate in some industries from December 1.

I have written before about payday super, which starts on July 1 and is a big change in the superannuation payment area.

From that date, employers will have to pay staff super when paying wages. This will impact cash flow. It means finding an extra 12 per cent every pay period – weekly, fortnightly or monthly – to cover this. Historically, employers only needed to pay superannuation quarterly.

Most payroll programs that I’ve looked at do have provision for payday super and it’s a relatively easy process to start doing it, even from now.

As I look at the above changes and at the local economy, I am fearful of the impact of these changes on our local small businesses.

We are already starting to see surcharges and price increases. There is no indication this will go away soon and the likely outcome, particularly in hospitality where people tend not to stay in the industry long enough to earn long service leave, will be increased prices.

Already I see people on social media complaining about increased prices without necessarily understanding the pressures on small businesses.

I recently saw a plea for delaying payday super. It does not appear this will happen. Perhaps it’s time the unions, the employers, the small businesses and the policymakers all sat down together to have a look at the impact of these “small” decisions on the small business sector, which after all, is the largest employer in Australia. I don’t want to see any more small businesses driven to the wall in Canberra because of these additional imposts. Life in small business is hard enough.

If you run a small business or you need guidance on the above changes or any other tax-related matter, contact the experts at
Gail Freeman & Co Pty Ltd on 02 6295 2844, email [email protected] or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.

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