Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

The point here tonight is that the Tax Laws Amendment (Small Business) Bill 2007 amends the law to make it easier for up to two million Australian businesses to determine their eligibility for a range of small business concessions. The current tax laws contain a number of special concessions for smaller businesses. The issue is that the law defines ‘small business’ in different ways and, in the past, each tax type has had its own set of eligibility criteria based on the particular group of taxpayers being targeted for assistance. Each definition was tailored to the specific characteristics, policy objectives and constraints of each particular tax concession. The managed separate eligibility criteria determining what is a small business, however appropriate when considered individually, are a source of complexity and unnecessary compliance costs for small businesses. This bill collapses all of those many definitions into just one based on aggregate turnover.

The bill also delivers on a number of the government’s 2006-07 budget announcements, including increasing the capital gains tax maximum net assets threshold from $5 million to $6 million, increasing the goods and services tax cash accounting turnover threshold from $1 million to $2 million and extending the rollover relief available under the uniform capital allowance system to small business entities who use the simplified depreciation rules. This bill demonstrates what the government has demonstrated time and again: its commitment to reducing the red tape and compliance costs for Australian businesses—in this instance, Australian small businesses.

Over the past decade, the government’s strong economic performance has seen both individuals and businesses benefit from lower taxes and greater incentives to save and to invest. Now 80 per cent of individual taxpayers have a top marginal tax rate of less than 30 per cent and businesses face a top tax rate of 30 per cent. Real household wealth has doubled since 1996, and business profits are now at record highs. These results have not been achieved by good fortune alone but as a consequence of a clear economic philosophy and experience.

The member for Rankin has moved a second reading amendment asking the House to call on the government to implement amendments to the GST law to assist small businesses. The member might not have paid attention to the budget speech, but the government announced four initiatives to make the GST easier for small businesses. Firstly, I would like to note that the GST was part of the A New Tax System package, which is the most comprehensive and successful tax reform in Australia’s history and one Labor opposed at every step. The GST replaced a narrowly based and inefficient tax system and broadened the tax base to cover the services sector. What Labor always refuse to acknowledge about the introduction of the GST is that it removed sales tax, it removed stamp duty on marketable securities, it removed the BAD tax and it removed the FID—it removed all those taxes and more— and that is part of the reason why this economy is in good shape today.

People who are listening to this debate tonight, particularly those in small business and those who are trying to balance their family budget, should recognise that Labor opposed this economic reform every step of the way. They stand condemned for that stance again tonight. Although Labor now make themselves out to be economic conservatives and people who could continue to manage the Australian economy well in the future, they have opposed every step that this government has taken, particularly in relation to tax reform.

The states and territories are much better off with this broad based, secure and growing revenue source. The GST is expected to generate $42 million in revenue in 2007-08—and I remind the House that it is the states and territories, not the federal government, that benefit from every cent of GST revenues. This government recognises that tax compliance can present a challenge for small businesses. There is no doubt about that. The government has demonstrated time and time again, though, that where possible we take steps to simplify taxes for small business. To that end, the budget included four measures to simplify the GST for small business. Of course, those measures are in addition to the significant changes that are contained in the bill that is now before the House.

The government announced a start date of 1 July 2007 for all these changes and, in accordance with the Intergovernmental Agreement on Commonwealth-State Financial Relations, changes to the GST base require the unanimous agreement of the states and territories. The government has sought the relevant approval from the states and territories and, once that approval is obtained, I will move quickly to bring the changes before the parliament. I do suggest tonight, though, that Labor members contact their state Labor colleagues if they wish to expedite the process—and while the member for Rankin is talking to his Labor colleagues about this, he may also wish to discuss the payroll tax that they rip out of business. His comments about inconsistent payroll tax bases are a matter for the states and territories, and this government cannot be held responsible for Labor’s continuing mistakes in running the state governments.

The member for Rankin also raised concern about the take-up rate for the simplified tax system. The take-up rate for the STS has been reflective of any new system, in that the number of taxpayers entering the STS has steadily increased since its introduction in 2001—and some 850,000 small businesses are in the STS. The bill before the House today introduces a new small business framework. The framework removes the elect-in element of the STS and, from 1 July 2007, small business taxpayers will be able to access any of the STS concessions so long as they are a small business entity.

This bill is expected to further increase the take-up of the already successful and popular STS concessions. Through all of these debates the point remains that the coalition government has been responsible for reducing interest rates for small business from where they were under Labor—at about 20 per cent—down to the levels they are at today. The government has been responsible for driving the unemployment rate down from over 10 per cent under Labor to 4.4 per cent now—a 32-year low. We have employed 326,000 people over the last two months, and two million since we have been in government. The Labor Party have opposed us on every measure that we have put up to help small business, to reform the Australian economy, to make sure that we can build on the successes that we have maintained over the last 10 years and to set ourselves up for continued economic prosperity into the future.

People, particularly those in small business, should be reminded of those facts on a day-by-day basis. In particular, they should be reminded that the Labor Party, which is now dominated by the unions—with more than 80 per cent of their frontbench having been either a former union boss or a union hack in some other form—would stand against small business in this place if they were ever elected to government. People in small business recognise that small businesses are the backbone of the Australian economy. If we want to see small business in this country broken, then we need a return to a Labor government. Small business does not deserve that, Australian families do not deserve that and the Australian economy does not deserve that.

I thank those who have participated in this debate, and I commend the bill to the House.

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