Taxes are damaging business

I travelled down to the Gippsland this week to build a business continuity plan using www.continuitycoach.com for a small manufacturer and then complete a review of their insurances for their insurance broker.

It disappointed me to learn that the business had decided to stop exporting to countries such as Singapore, New Zealand and the United States due to a combination of a hike in the cost of the Australian Quarantine and Inspection Service (“AQIS”) and the high Australian Dollar. The owners said they would have ridden out the dollar but the increase in the past few years of AQIS was the final straw and they would not continue.

Why do we as a country give massive subsidies to foreign owned industries such as the motor industry and yet not give our own SME businesses a chance to become large businesses? Is it the power of the lobby groups or the unions? I really do not know but it appears that SME business owners do not have anywhere near the same voice.

Government need to understand that it is the SME’s that are the biggest employers and yet they get every obstacle possible thrown at them. They put so much effort into their business, put everything on the line with mortages over their home and personal guarantees and get no real support.

When we came to discuss the insurance the issue of Fire Service Levies naturally came up and in this businesses case the rate had gone from 64% to 95%. Even without any increase in premium the cost of insurance due to the triple tax had gone up $5,000. Of course due to the spate of natural catastrophes the premium had gone up and the Insured has elected not to increase their sums insured as they ought to until the 2013 – 2014 year as they simply cannot afford the increases at this time.

I went away from this great long standing business worried for them should they have a loss. I know their bank is going to get what is left and not the families that have put so much into the business. I was equally worried about Australian businesses generally particularly in rural Victoria.

The current government seems to be looking into every hollow log they can to collect levies and taxes and yet cutting services at every turn.

Like everyone else I saw all the grandstanding on the National Disability Service over what was such a small amount of money. Much less than 1/10th what the government is taxing the insurance industry on fire service levy.

More and more I question the value of state governments regardless of the political party.

The only positive I took from the day was that the director of the company understood the importance of and valued the business continuity plan (“BCP”) that was created. This plan will, using ContinuityCoach.com be available from any where connected to the internet and will be updated and exercised regularly. They chose 6 monthly.

While a BCP is an invaluable asset to a business allowing them to recover faster and manage a crisis with much less stress, it should be seen as a compliment to insurance and not a substitute.

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