SME financer, Bibby Financial Services - Flexible Cash Flow Solutions are concerned about the knock-on effect the Resources Super Profit Tax will have on small businesses supplying the mining industry.
“A lot of our clients are sub contractors to the mining industry and it is likely that the new mining tax will have a significant impact on the demand for their services,” said Steven Davies, Operations Director, Bibby Financial Services Australia.
A report by the Institute for Factors and Discounters (IFD) shows that Western Australian turned to debtor finance the most in 2009. In fact, demand rose by 40 %.
“A lot of the companies we support in Western Australia are in the growth stage and looking for additional cash flow to support new business ventures and access raw materials. You have to wonder what impact the proposed mining tax will have on SME’s operating in the mining sector in the medium term,” Davies said.
“We support Rudd’s proposed company tax cuts for small businesses from 30 % to 28 % and the proposed write off for small business assets worth up to $5,000, however people can do the maths and overall some small businesses will be worse off.”
The Henry Review announcement follows a Senate inquiry into the ability of SMEs to access financing after an increasing number of small businesses have complained about the lack of available funding.
Managing Director for Bibby Financial Services, Australia, Greg Charlwood, says that banks and the Australian Tax Office may still take a harder line this year toward small businesses who are late payers.