The Hidden Cost of Doing Business

I have written previously about the need for Australia’s manufacturing sector to embrace AI, particularly in the supply chain, and how the government, at every level, must offer incentives and assistance to industry to rebuild the manufacturing sector. The ongoing conflict in the Middle East and its impact on the ability of cargo carriers to transit the Suez Canal and the?Red Sea is a stark reminder that Australia’s supply chains are spread dangerously thin and are over-extended. The cost to companies who import goods via this tenuous supply chain is crippling.

It is no secret that Australian manufacturing, at all levels, has been in decline since the 1970s. The causes are many and varied, but labour shortages, increased input costs, and an exponential growth in government fees and taxes. The purpose of this paper is to identify the regulatory fees and legislative imposts that an Australian manufacturing company must pay to operate legally in Queensland. Why Queensland? Primarily because that is where I live and work, although the fees and taxes that exist here are present in other jurisdictions in various forms.

Following is a list of the fees and taxes a manufacturing company must comply with in order to carry on a business in Queensland:

1.????? Local Government

Business Registration Fees: This fee varies by council but is typically around $200-$500 annually. This is an ongoing cost of doing business.

Development Application Fees: This fee varies by council and project size but is typically $500-$5,000. It is a one-off fee applied to start-ups building new or modifying existing infrastructure.

Environmental Health Fees: This fee varies by council but is typically $200-$1,000 annually. It is payable every year as long as the business continues to operate.

2.????? State Government

Payroll Tax: 4.75% of total wages and payable annually.

Workcover Insurance: Varies by industry, typically 1%-3% of total wages payable annually.

Environmental Protection Licences: Varies by industry, typically $500-$10,000 annually.

Stamp Duty: Varies by transaction type, typically 1%-5% of the transaction value.

3.????? Federal Government

Business Registration Fee: The fees for registering a business name are $44 for one year and $102 for three years.

Goods and Services Tax (GST): 10% on most goods and services.

Company Tax: 25%-30% of taxable income.

4.????? Australian Securities and Investments Commission (ASIC) Fees:

Company Registration: A one-off fee of $506.

Annual Review Fee: An annually recurring cost of $273.

Late Fees: $96 (up to one month late), $401 (over one month late).

5.????? Import Processing Charges: Varies by shipment value, typically $50-$200.

These fees and imposts can vary significantly based on the specific circumstances of the manufacturing company and its location. It’s advisable to consult with local councils, state revenue offices, and federal agencies for precise and up-to-date information.

I will leave it to you to work out how these fees add up, but at a minimum, a manufacturer in Queensland can expect to pay roughly 1/3 of their annual earnings in government fees. This begs the question: Where do these fees go, and how do they contribute to strengthening the manufacturing sector? I do not have the answer, and I suspect that most of our political leaders and Public Servants also have no clue, other than into consolidated revenue.

My call to action: contact your local members and advocate for wholesale reductions in government fees and taxes that are currently stifling innovation and growth across the manufacturing sector. Demand answers and keep agitating until you get them. We cannot keep blaming high labour costs on the state of the manufacturing sector; yes, they are an increasing input cost, but they are?insignificant when compared to the government’s imposts.