Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Hansard source

Another day, another taxation laws amendment bill. This legislation, the Tax Laws Amendment (2006 Measures No. 7) Bill 2006, makes a series of changes to the Income Tax Act, and we on this side of the parliament support most of those changes. We do have some questions that we would like to see resolved in relation to the exemptions from interest withholding tax. The rationale for what the government is seeking to do seems reasonable—that is, to ensure that there are clear definitions of what constitutes a debenture. In the world of modern financial instruments there is some ambiguity about that. But in clarifying that we would be very concerned if the consequence was that the cost of obtaining overseas finance, for example, for infrastructure investment in Australia were greatly increased. For those reasons, Labor would like to see this matter go to a committee so that everyone can have a say in relation to what is a complex area.

I will say, as a general position, that if the policy is reasonably clarifying an area of potential revenue leakage or averting massive revenue leakage then it would seem to have some merit. But the proof of the pudding will be in the eating here, and if on the other hand it has deleterious effects on the cost of raising finance then that certainly will need to be taken into account. That is why we argue for a committee or an inquiry that would allow relevant interests to have a say.

As the newly appointed shadow minister for the service economy, small business and independent contractors, I have great pleasure in commenting on the small business capital gains tax concessions. Labor supports those concessions. We take the view that small business is at the heart of entrepreneurship in Australia and that small business people and independent contractors make a conscious decision to go out on their own, take a chance, apply some hard work and ingenuity, and create prosperity for their families and for Australia at large. We pay tribute to the small business people of this country—interestingly, a group of people who were described after the Second World War by Prime Minister Menzies as ‘the forgotten people’. They obviously were remembered at that time, but I would have to say that, after 10½ long years of the Howard government, in many respects they have been once again forgotten. Nevertheless, Labor does support the arrangements for the clarification and extension of capital gains tax concessions for small business.

The overriding problem for small business, though, is captured in a survey that was released by MYOB just this month. It tells us a lot about how small businesses see the challenges that confront them, and how they perceive both the Commonwealth and state governments. I think it would be worth me reporting to the parliament on some of the findings of that survey. For example, nearly half of small businesses are dissatisfied with the federal government’s contribution and performance. The precise number is that 44 per cent regard the government’s performance either as very poor or as somewhat poor.

Looking at some of the industries that make up that total of 44 per cent, in the case of transport and storage 59 per cent consider that the government’s performance is very poor or somewhat poor, and in wholesale trade 53 per cent consider it poor or very poor.

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