Policy fails to massage CEO
MASSAGE Club chief executive Grant Jones says tax cuts are great if you are turning a profit but many small business owners in WA are struggling to stay afloat.
Launched in 2012 with a focus on a high-quality, reputable service with qualified masseurs, Massage Club now operates outlets in Booragoon, Success and Joondalup.
Mr Jones said while the Booragoon and Success operations were making money, the Joondalup store opened more recently and was still finding its feet in Perth’s tough economic climate.
“You can reduce tax as much as you like but if you’re not making money, a tax cut isn’t going to help,” Mr Jones said.
“Even if you are, a 1 per cent tax reduction is not exactly exciting. To use the Success clinic as an example, we turn over $700,000 per annum, with a margin of about 10 per cent.
“So a $70,000 profit equates to a previous approximate tax bill of $19,950, now reduced to $19,250.
“Without trying to be disrespectful, a saving of $700 a year is in no way motivating or stimulating and merely gets absorbed into the growing administrative costs we have in managing our GST, BAS, super, etc.
“I think it’s a bit of smoke and mirrors – the Government wants to be able to say those magic words ‘tax cut’ but the reality is it will not make a difference at all to the majority of small businesses in this environment of shrinking margins.”
Mr Jones said returning a fairer share of GST to WA would do far more to stimulate the local economy, benefiting all business owners.
“It’s great that we’re helping to pay for roads in Melbourne and Sydney but I don’t get to drive on them,” he said.
Massage Club Australia CEO Grant Jones.