The top 3 things that should be in Scott Morrison’s 100-day action plan
With a ‘miracle’ win for leader Scott Morrison and the Coalition over the weekend, it appears by July 1, Parliament will be back in business – for business.
So, what’s next?
When setting a strategy, the first 100 days are critical to success. While tax relief may be at the top of the agenda; we asked our experts their thoughts on what Scott Morrison needs to have in his 100-day action plan. Plus, what their clients are saying in response to the election results.
Here’s the top three things that should be in Scott Morrisons 100-day action plan:
1). Build on the pro-business mandate
In the last twelve months, political uncertainty has been negatively impacting business sentiment and investment.
Tony Hood, Director of Corporate Advisory says the Coalition ‘pro-business’ policies are what Australians wanted, and this needs to remain in their focus.
“Above all else, our clients were looking for a mandate to remove the uncertainty that has plagued the business environment,” says Tony.
“While many are surprised that the Liberal Party has emerged with the mandate; the pro-business mandate is a boon for industry and allows longer term planning, at last.
Being able to plan with more confidence will improve business sentiment and strengthen our economy.”
Janine Williamson, Director of Wealth Advisory says her retired clients are breathing a sigh of relief, now their long-term retirement plans won’t be affected.
“One of my retired clients said that they feel as if a shadow has been lifted from their shoulders,” says Janine.
“I think many retired clients, who aren’t necessarily “wealthy” but are self-funded were really worried about the consequences of Labor’s proposed policies.
Investment markets have been very volatile and for the self-funded, low interest rates on term deposits has meant that their income has been falling.
They worked really hard to get where they are in retirement and plan their circumstances around the current rules; to then face the possibly of these getting changed, was concerning to them.”
2). Make financing for SMEs easier
Scott Girdlestone, Director of Wealth Advisory says a key action that would benefit small-to-medium enterprises, is for the Government to tackle the restriction of credit.
“Any assistance to make the process of obtaining credit easier and cheaper would be worthwhile,” says Scott.
Adrian Frinsdorf, Director of Wealth Advisory agrees:
“Finding ways to get the economy moving that is not reliant on interest rate cuts is vital,” says Adrian.
Scott says small business owners quite regularly put their own homes up as collateral for loans to support their businesses, particularly in the beginning during the expansion phase – although, this may be a requirement at any stage of their business lifecycle.
“Why are they doing this? Quite simply every dollar counts in SMEs and the cost of other financing options for business owners is nearly double that of a residential mortgage rate,” says Scott.
“Part of the issue is that it takes a specific skill set to understand SME’s from a financial perspective during the credit assessment process, perhaps the government could provide further assistance at this level.”
It appears this process is already occurring. According to APRAs website today, they’re proposing authorised deposit-taking institutions (ADIs) to have an interest rate buffer of 2.5 per cent when assessing mortgage serviceability. This will likely result in a significant reduction of the current 7.25 per cent rate used by the major banks at present and amounts to a monetary easing policy.
Director of Tax services, Greg Travers, says for small business, the taxation of trusts and anti-avoidance measure, Division 7A is one of the key tax provisions that the Coalition should seek to reform if they really have SME businesses’ interests at heart. You can read more about how this could be achieved here.
3). Specify the climate change policy
The Coalition has promised to reduce emissions to 26-28 percent on 2005 levels by 2030.
Mark Calvetti, Director of Corporate Advisory says his clients are calling for a more detailed climate change policy.
“Our clients are saying they want to be part of a practical and achievable emissions policy,” says Mark.
“While pro-business won out in the election, Australian’s understand the need for climate change to be on the agenda. However, business needs to know the effect of these plans, so they can incorporate these into their business accordingly.
In his first 100 days, Scott Morrison must consult with business and the community to refine the emissions policy.”
With a fully formed government and a Prime Minister in his own right, this certainty does appear to be on the table.
“I believe it is now back to business for us all and a lesson to be learnt for politicians. Let’s hope Scott Morrison will put into action his election promises!” says Janine Williamson.
Want to know more? Read our #TheFirst100Days action plan from a superannuation perspective or our Federal Budget wrap up to see what to expect.