$10,000 a year cost for small business IR incorporation – Minister

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$10,000 a year cost for small business IR incorporation – Minister

Becoming incorporated to take advantage of the Federal Government’s new IR laws will cost small businesses about $10,000 a year, a NSW State Minister has claimed.

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Becoming incorporated to take advantage of the Federal Government’s new IR laws will cost small businesses about $10,000 a year, a NSW State Minister has claimed.

The NSW Minister for Small Business, David Campbell, said the 1252 pages of federal industrial relations changes will not only increase the bureaucratic red tape that applies to small business, but could also add around $10,000 or more per year to their costs.

‘Despite claims to the contrary, the Federal Government’s proposed industrial relations changes will have a major, negative impact on small business,’ he said.

‘In some cases, incorporation can force small businesses to pay a number of annual charges and fees, including extra accounting fees, Australian Securities and Investment Commission filing fees, and fees to maintain company registers.

‘For a sole trader earning $70,000 a year with two staff, this could add up to $15,000 a year.’

Complex and confusing

Campbell said that for small business, the ‘devil truly is in the detail of these IR changes’.

‘Lots of mum and dad small businesses work long hours, operate with tight margins and aren’t earning the mega-salaries of big businesses,’ he said.

‘$10,000 of added incorporation costs will come straight out of their pay packets.’

Campbell said that since the Federal Government is relying on corporations law to ram through these changes, small businesses will be forced to pay a string of fees to incorporate.

‘Incorporating a small business requires upfront and ongoing expenditure and additional paperwork to be submitted to various government and corporate agencies,’ he said.

‘Small businesses are still upset about the red-tape avalanche triggered by the GST. Now they’ll be tangled up by the costs and mess of IR red tape.

‘Small business owners are busy people; they don’t have the time or resources to go through this complex and confusing legislation’.

Campbell said that when small business operators ring the WorkChoices hotline to discuss the changes, they get little or no information.

He said the NSW Government has established the Fair Go Advisory Service to help NSW workers and businesses make informed decisions about industrial relations issues.

It can be contacted on 131 628 or www.fairgo.nsw.gov.au

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