Barry Haase (Kalgoorlie, Liberal Party) Share this | Hansard source

I rise today to address the Tax Laws Amendment (Small Business) Bill 2007. There are currently separate eligibility tests for the goods and services tax, the simplified tax system, the capital gains tax, the fringe benefits tax, pay-as-you-go instalments and small business concessions. This bill is about making things easier for small businesses in Australia. The bill will standardise the eligibility criteria for small business tax concessions from 1 July this year. It will create just one eligibility test to access a range of small business concessions. Any business—subject to satisfying existing eligibility criteria, not related to business size—with an aggregated annual turnover of less than $2 million will be eligible. The bill will allow small businesses to choose the concessions that meet their business needs. Businesses will not be obliged to adopt any concessions not suited to their requirements.

The concessions are: a 15-year asset exemption from capital gains tax, a 50 per cent active asset reduction of capital gains tax, a retirement exemption from capital gains tax, rollover provisions for capital gains tax, simpler depreciation rules and trading stock rules, immediate deductions for certain prepaid business expenses, the choice to account for GST on a cash basis and the choice to pay GST by instalments. The concession is also an annual apportionment of input tax credits for acquisitions and importations that are partly creditable. The bill provides for a car parking exemption from fringe benefits tax and pay-as-you-go instalments based on notional tax. There will be a two-year amendment period for the implementation of this bill.

The bill includes other elements. The existing eligibility thresholds for accessing capital gains tax, fringe benefits tax and pay-as-you-go instalment concessions will be retained. The bill will increase the maximum net asset value test for accessing capital gains tax concessions from $5 million to $6 million. It will extend the rollover relief available under the uniform capital allowance regime to any business with a turnover of less than $2 million that chooses to deduct amounts for depreciating assets. It will increase the GST cash accounting threshold from $1 million to $2 million. It will standardise the eligibility criteria, resulting in a reduction of compliance costs for up to two million Australian small businesses. This bill demonstrates the coalition government’s continued commitment to reducing red tape and compliance costs for small businesses. The mining boom is creating wealth, but small business is the driving force in many regional communities across my electorate.

In the last decade, the coalition government has recognised and supported small business. Australia’s small businesses are vital to our economy, accounting for 58 per cent of employment growth in the past six years. There are more than 1.2 million small businesses in Australia and they employ 3.3 million people. Over the past decade, the number of small businesses has grown 3.5 per cent each year on average. This sector generates 30 per cent of economic production. Forty per cent of all Australian small businesses are in regional areas. In my electorate, there are an estimated 18,000 small businesses operating and 67 per cent of all small business owners operate from home. This sector provides economic opportunities for women, who represent around one-third of small business operators.

The small business sector is very diverse. In 2000-01, the majority of small businesses were in the areas of construction, property and business services, retail, manufacturing and health and community services. The entrepreneurial culture of Australia’s small businesses is well known, although very difficult to measure. There are a number of innovative, growing small businesses in my electorate, including a Carnarvon based company, Abacus Fisheries, run by Peter and Sandy Jecks, who catch, process and market whole blue swimmer crab from Carnarvon. The Abacus facility is the largest, most technologically advanced, purpose-built crab-processing facility in Australia and is geared to one thing—producing a culinary superior crab. The company recently secured a grant from the Australian government’s Food Processing in Regional Australia Program to purchase and install processing equipment to grow their business.

Rosemary McGuigan and Gerri Ranieri are the directors of Kimberley Events Management. The company provides personalised conferences, holidays, events and weddings for visitors to Broome and the surrounding area and to countless farmers, hoteliers, restaurant owners and tourist operators.

Small businesses are also becoming increasingly export focused, with presently 41 per cent of all goods exporters being small businesses. Wildlife crusader and crocodile hunter Malcolm Douglas established the Crocodile Farm in Broome in 1983. He has grown it into a world famous tourist attraction and is now an export success. Around 40 per cent of the farm’s revenue comes from its exports. Crocodile skins are in great demand from fashion houses overseas. Of course, they want the very best quality and that is produced in Broome, Western Australia, in my electorate.

The economic environment in which small businesses operate has changed dramatically over the last 10 to 20 years, but small business has embraced change and grown with it. For example, small businesses have shown they are able to adapt to new technologies, with 62 per cent of small businesses using the internet for a range of uses such as research, email and making or receiving payments. Small businesses are essential to the future sustainability of regional and remote areas and must be supported. The most significant change we have legislated for the future of small business is abolishing the unfair dismissals law for companies with fewer than 100 employees.

We are supported by the Small Business Coalition, which is opposed to any changes to the current exemption from unfair dismissals. The Small Business Coalition is a coalition of 26 small business representative groups, including COSBOA, the Franchise Council of Australia, the Motor Trades Association, the Newsagents Federation, the Real Estate Institute, and the Master Plumbers and Mechanical Services Association of Australia. The SBC considers:

... retention of this fundamental exemption as absolutely essential to ongoing growth and success of small businesses. Any moves to roll back or water down these reforms would be against the interests of small businesses.

The election of a Labor government would put all these positive changes at risk, a risk that small businesses cannot afford to take. The exemption from unfair dismissals is absolutely essential for small business. The exemption creates jobs and cuts red tape. Small business knows it but the opposition does not. Labor’s decision to reimpose unfair dismissals on small business will cost thousands of jobs. Since small businesses were exempted from unfair dismissals, 276,000 new jobs have been created, a benefit to all those Australians and a benefit to the nation’s economy. Small business groups have credited the removal of unfair dismissal impediments as being a major reason for new jobs growth across Australia.

Now Labor is promising to throw away this strong jobs growth with a costly, bureaucratic system. Small business operators will waste hundreds of hours and thousands of dollars as a result of this draconian change. Labor will force us back to the bad old days when small businesses were reluctant to hire staff for fear of having to pay ‘go-away’ money to ex-employees threatening legal action for trumped-up unfair dismissal charges. Labor has not listened to or consulted small business. Labor has only listened to the unions because union leaders dictate to Labor lackeys in the Australian parliament. Reintroducing unfair dismissal laws and then trying to disguise it by offering an extended probation period will not fool small business. Small businesses have made it clear they want no change to unfair dismissal laws. Small business can only rely on the coalition for present legislation to remain in force. We have supported them in the past for greater employment opportunities for all Australians. We support them now and will support small business into the future.

We have heard a lot from the opposition leader about the unfair nature of AWAs, but I quote from today’s Sun-Herald which has a headline on the front page ‘Harsh Labor’:

A COMPANY owned by Kevin Rudd’s wife put workers on individual contracts that stripped them of key award conditions.

A common law contract, obtained by the Herald Sun, removed penalty rates, overtime and allowances for an extra 45c an hour.

The deal offered a $30,000 annual salary, or $576.93 a week.

This is only marginally better than the $29,219 legal minimum ($560.11 a week) applying to the most junior class of worker in the industry.

The offer did not include meal and travel allowances or loadings for work performed outside normal hours.

Mr Rudd’s wife, Therese Rein, is a multi-millionaire businesswoman whose companies employ 1400 workers in Australia and Europe.

Her firm Ingeus is a global player in the employment and recruitment sector and last year achieved revenues exceeding $170 million.

But the sting in the tail of the article is that:

The June 2006 contract noted that workers were covered by the Community Employment, Training and Support Services Award.

Employers would be forced to return to those sorts of situations if the Labor Party were successful in the election this year. The changes proposed in this bill will remove red tape, simplify the tax accounting process and cut costs for small businesses. I commend the bill to the House.

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