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

The minister wants to parrot on in ignorance and ignore the real solutions that will help ease the red tape burden on small business. Labor proposed a concept called BAS Easy as far back as 2001. It was developed when I was the shadow Treasurer and with the assistance of the member for Rankin. Previous leaders of the Labor Party announced it, including me in that role. At the time this initiative was announced, it was criticised by the Treasurer. He had not even read the detail but he criticised it. He then moved to a position in which he criticised it, on the one hand, because it would cost business more but, on the other hand, because it would cost revenue more. How can it do both? The Treasurer, as always, was never across the detail. He is only the show-pony performer in this chamber in question time—always lazy on the job, lazy on the detail and not prepared to understand the sorts of burdens that small businesses are under. He has ignored a real proposal that could have had strong bipartisan support.

The proposal that we put forward was called the ratio method. It effectively said, based on one’s past history in terms of GST remittances, let us give small business the option of a system for GST tax remittance that would essentially involve two boxes. One box, on the approval of the tax office, would include the ratio of GST that should be submitted and the second box would contain the turnover of that business for the quarter in question. The quarter in question was the calculation that businesses had to make—but they have to do it anyway. They have to know what their turnover is. The simple calculation would have been the turnover for the quarter times the ratio. We made sure that there would be no requirement for reconciliation at the end of the accounting period. You cannot get a simpler system than that. Why wouldn’t it be embraced? The truth of it is that the government has embraced it in part. But if it has embraced it in part, why not extend it as an option to all small businesses? I ask the minister to tell us, when he gets up to respond in this debate, why he has not done it.

I said that there would be two simple boxes. The ratio could be arrived at by two methods: a snapshot method where the business could opt to have it determined at two different points in a 12-month cycle or a business norm. Business norms, interestingly enough, are already embraced by this government when it comes to the mixed food business, so it is possible and we know that the tax office has already identified business norms in certain professions. From memory, it has identified them for a whole range of initiatives in the case of retailers of mixed businesses. It has identified those norms in relation to, for example, retail trade at 0.87 per cent; the wholesale trade at 0.77 per cent; accommodation, cafes and restaurants at 0.87 per cent; property and business services at 0.76 per cent; cultural and recreational services at 0.65 per cent; and personal services at 0.80 per cent. Clearly, there is the capacity for the tax office to identify the norms. We ask: why shouldn’t small businesses be able to exercise this option in whatever category they operate?

As I said, we proposed this initiative six years ago. Small businesses in this country could have had the relief we were urging six years ago. We also proposed the $2 million threshold. We are pleased that the government have at least embraced the $2 million threshold but we want to see the BAS Easy notion extended to small business. Interestingly enough, the government have introduced what are called SAMs, simplified accounting methods, but only for retailers that sell food. That is what they did way back.

Under division 123 of the tax act the commissioner can create SAMs that some retailers can choose to exercise. It does not provide the past history method but it does provide for the schedules method, the business norm method. It only goes to, if you like, the one form of simplified BAS Easy and it is limited in its application only to those that sell food. In 2006 the Banks review said it should be extended to restaurants, cafes and caterers, and in October 2006 it was extended to them. But the question that I again pose to the minister for response when he gets to the table is this: if it is to be extended to other food retailers, why not make it available to all businesses? The machinery is there, the option is there, the principle is there, so why does it have limited application?

In the 2007 budget we had the interesting circumstance where the government claimed it was adopting this BAS Easy approach. It basically said that the SAM could be extended to all entities that have mixed supplies, taxable and GST-free, or mixed businesses. But from my reading of the bill—and perhaps the minister can enlighten us—it still seems to be restricted essentially to food businesses, because the businesses have to be mixed suppliers of both taxable and GST-free goods. Why not all businesses? That is the question that I pose to the minister.

Labor has come forward with an initiative, a practical initiative, that can ease the red tape burden on small businesses as the unpaid tax collectors of this country. This government has ignored Labor’s call to embrace it in a bipartisan way; the government is pretending to have embraced it. We have seen no legislation come forward to amend the tax act to extend the BAS Easy option beyond the food sectors of industry. I ask the minister: if the Treasurer announced on budget night that he was going to extend the principle of the SAM, when we are going to see the legislation that extends it to all businesses in this country? That is what the small businesses of this nation want to know tonight. They want to know from this government when it is going to lift the red tape burden.

I say this to you, Mr Deputy Speaker Causley: Labor are committed to lifting the red tape burden. We have been committed to doing that for some years. This government has ignored those calls. This is smart policy. It deserves bipartisan support. But, as usual, the government has squibbed it because it has failed to understand the important ramifications for small business.

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