Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Hansard source

I rise in relation to the Tax Laws Amendment (Small Business) Bill 2007 to support the amendment moved by the member for Rankin. This bill provides some important measures to help small business. We support those measures but we strongly assert that they do not go far enough. In fact, these measures are too little and too late to deal with the mountain of paperwork and red tape that is swamping small business in this country. It is another desperate attempt by this government, after 11 years of, effectively, inactivity on the alleviation front but a lot of activity in adding red tape and burden to small business, to show that they are doing something because of the continuing complaints that come from small business about their inability to get on with what they want to do—running effective businesses and being able to spend more time with their families instead of just filling out forms for the government or becoming unpaid tax collectors for the government’s GST. Having said that there are some important initiatives in this legislation, the government have still baulked on an important measure, which I will come to later, that could alleviate or give the option to alleviate a significant burden that falls on business in being that GST tax collector.

As for the measures in the bill which we welcome, effectively this legislation introduces a standard $2 million turnover threshold to obtain tax concessions. Prior to this legislation, there were a range of thresholds for different concessions. This was a terribly confusing situation. It was another example of the red tape nightmare that the government imposes on small business. So this step is welcome.

Labor also supports the standardisation and the three definitions of aggregated turnover to determine if a business satisfies the threshold. We also support the provisions in this legislation to increase the capital gains tax maximum net assets threshold from $5 million to $6 million and we support the decision to remove the $3 million depreciating assets test from the simplified tax system. We, of course, support the GST cash accounting threshold going from $1 million to $2 million. But we are still very concerned that so few small businesses take advantage of the simplified tax system.

In Senate estimates hearings last year we learnt that less than 30 per cent of small businesses access that system. Under the arrangements, small business can group assets and depreciate them much quicker to improve cash flow in the early years. This, you would have thought, was a welcome initiative, so why is it that so few avail themselves of it? I hope when the minister responds he can enlighten us more as to why so few businesses take advantage of this system.

Finally, we support the increase in the GST registration threshold from $50,000 to $75,000. This is an initiative that the Leader of the Opposition called for earlier in the year, and we welcome the government embracing this initiative that Labor put forward.

As welcome as those measures are, they do not go far enough in easing the pressure on small businesses, the burden of red tape. After 11 years of inaction and of promising when they came to office to halve the amount of red tape, these measures are too little too late and a further desperation in the government’s desperate throes to try to pretend that they are doing something that they have neglected for so long.

I remind the House of the Prime Minister’s commitment back in 1996, when he made a promise to ‘cut red tape for small business by 50 per cent’. What happened when the government won office? We had a review, the late Charlie Bell review, soon after the government came to office. That was followed by a report, a big launch and a lot of words, but no effective action. And then we had another report, the Banks report.

Not only did those reports not ease the problem; plenty of additional measures added to the red tape and the paperwork. The most significant measure that added to this red tape, of course, was the introduction of the GST and the mountain of paperwork that that involved. Instead of saying to small businesses: ‘We want you to do what you’re best at. We want you to get on with running your business. We want you to have the time to spend with your family,’ this government turned every small business into an unpaid tax collector for them. Tax collections through the GST now net in excess of $40 billion—a tax, I might say, the government say is not really theirs. I was almost gobsmacked last week when I heard the Treasurer get up in this House in question time and argue that this budget will see a lessening of the tax burden in proportion to the GDP. The problem in arriving at that proportion is that he left out the GST; he left out the $40 billion.

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