Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

I was quite happy to go along with what my daughter did recently—which was to engage in the World’s Greatest Shave campaign for the Leukaemia Foundation of Queensland, a wonderful organisation. When the Mayor of Ipswich decided to put in $1,000 if I got my head shaved, I could not resist the temptation. I speak in support of the Tax Laws Amendment (2009 Measures No. 1) Bill 2009. This bill deals with some tax law reform which improves the fairness and the integrity of the tax system in this country. It does it by three schedules, and I will deal with schedule 2 firstly, then schedule 3 and then schedule 1, which is the main schedule I want to talk about.

Schedule 2 makes some very technical changes to ensure that the general unclaimed superannuation money regime is more consistent with the temporary resident unclaimed superannuation money regime. There are some consequential amendments as a result of the payment of temporary resident superannuation to the Australian government. Schedule 3 gives effect to some reforms with respect to income tests which were announced by the Treasurer in the budget 2008-09. With effect from 1 July 2009 the reforms amend the relevant income tests in the tax and transfer system to include certain salary sacrifice contributions to superannuation, which will henceforth be known as reportable superannuation contributions, net financial investment losses and adjusted or non-grossed fringe benefits.

I listened with interest to the member for Casey talk about the third schedule. I understand the position of the coalition is to support schedule 3, which means that they will be supporting income test changes to include certain salary sacrifice contributions to superannuation. This is interesting because yesterday we heard many unctuous and sanctimonious comments from those opposite on the reform that we are bringing in with respect to social security and, particularly, the Commonwealth seniors healthcare card. Under that legislation and those amendments that we brought into this House yesterday the definition of a cardholder’s adjusted taxable income was changed to include income from a superannuation income stream with a taxed source. In other words, there is consistency between income earners—whether they earn money working at a computer, in a retail outlet or digging ditches for the local council or whether they receive money from an income source from superannuation which is taxed. So effectively taxpayers are treated the same way whether they are wealthy or whether they are working class.

The other aspect of the change we brought in yesterday was to include, in the definition for the cardholder’s adjusted taxable income, income being salary sacrificed to superannuation. So yesterday the coalition opposed it and today, with respect to another bill, they support it. There is a real inconsistency in the coalition’s position on this matter. One only has to look at the coalition to see that they are Arthur one day and Martha the next on this issue. The comments made yesterday can only be interpreted as political in the circumstances, because, truly, if they were consistent then they would not support our position with respect to schedule 3. The amendments with respect to net financial investment loss are consistent with other reforms and other legislation. For example, losses on rental properties and negatively geared properties are taken into consideration for the purpose of payments of family tax benefit and also for child support assessment. We are making the tax system and the assessment system, with respect to benefits, consistent across the board. Schedule 3 is an important reform and I think it is worthy of support.

Schedule 1 is the schedule I want to talk about in particular. It gives effect to the government’s December 2008 announcement to provide relief to small business. I have contended on numerous occasions that this side of the House, the Labor Party, supports small business and always has done. I go back to the Trade Practices Act, which we brought in under the Whitlam government. The Labor Party is the party which supports small business. Those opposite on many occasions simply mouth rhetoric, but what action have they taken? One example is the greatest burden that small business bore under the Howard government, which was the imposition of the GST. I was in business for 20 years before I came to this place, and the Howard government increased our administration by bringing in the GST, something they never previously supported but foisted on the Australian taxpayer.

Changes under the Howard government with respect to income tax payment and assessment also caused a lot of grief for taxpayers throughout the country. The PAYG instalment system replaced the provisional tax and company tax instalment system from 1 July 2000. That system was supposed to be designed to ensure efficient collection of company income tax, amongst other payments to the Commonwealth. But if you ask anyone in business they will tell you that the quarterly situation continues to cause them grief. It is a problem for people in business. Having to come up with money every quarter rather than annually is often a burden on cash flow.

Taxpayers who satisfy certain criteria can have their quarterly tax instalments based on the prior adjusted taxable income year. Of course, that is changed for the base year and is reduced by any net capital gain included in the assessable income—except for superannuation entities—by any tax deductions used in calculating that assessable income and by any tax lost, to the extent that it carries forward into the succeeding income year. Businesses, individuals and taxpayers who pay the quarterly payments include certain individuals, small business, multirate trustees and other taxpayers—for example, companies which are taxed as entities—which have $2 million or less in base assessment instalment income for the previous income year. Many small businesses would have smaller turnover than that. Those who report more than $2 million in instalment income for the previous year and are eligible to pay annual PAYG instalments but have not chosen to do so can also pay under the PAYG instalment regime.

Paying tax is a burden if you are in business. We know we all have to do it because we want to travel on good roads and make sure that our hospitals function effectively and that our schools, which educate our children, are cathedrals of learning and education. So we have to pay tax, and business has to pay its fair share. The amendments in this bill have received positive press comment. Peter Anderson from the Australian Chamber of Commerce and Industry, who is not always the greatest friend of this government, talked about the amendments in schedule 1 of this bill as being a boost to business confidence. He applauded the small business tax deferral in that regard. The Australian Chamber of Commerce and Industry also welcomed the measures in the circumstances. Reducing the impost on a temporary basis is good in the circumstances when business is facing the challenges of the global financial crisis.

This bill is important for business. It is important because business and small business make up the heart of the economic development and wealth of this country. Small business is a challenge for anyone. Those who take up the burden and the challenge of small business are on their own in many ways. No-one provides holiday pay for them. No-one provides sick leave for them. They go out on their own and take a punt, and they should be supported as best they can. Small business employs millions of Australians. Whether it is small shops, accountancy practices, doctors’ surgeries or trades, small business is the absolute heart of our economic development.

Too often, small business is the forgotten player in our community and is not given the kind of assistance and help that is needed. Big business can lobby hardest and has government relations officers. Big business is often the entity which has the ear of government. It is a tragedy, I think, that small business does not get the voice that it needs in the halls of government. It seems that small business is often left out when it comes to reform as well. So I am so pleased, as someone who was in business for more than 20 years, to support this change. The PAYG instalment system, which is supposed to smooth taxpayers’ cash flow throughout a year, is a burden, as I say. It is difficult for taxpayers to meet the quarterly instalment. I sometimes wonder whether, in fact, going back to the days of an annual system would not be better.

Taxpayers pay tax under the Taxation Administration Act. Subdivision 45-L of schedule 1 of that act stipulates the way the Commissioner of Taxation works out the amount of PAYG quarterly instalments. As I say, it is based on GDP adjusted notional tax. There is an uplift factor, of course, which, again, is a challenge for small business people. They get their instalment; then the tax office sends them the letter they do not like to receive and they find they have to increase the amount they have to pay. Every time I received one of those I thought, ‘Oh, no, not again.’ This is a problem for those in business, so amendments like this, which provides for a 20 per cent reduction of the amount of the PAYG instalment worked out under that subdivision for the quarter including 31 December 2008, are important for small business.

The announced 20 per cent instalment reduction broadly represents the reduction in average instalments necessary in a single quarter to reflect the expected slowdown in small business growth for the 2008-09 income year. We will see that because of a rise in unemployment and a downturn in GDP growth. We have seen six or seven of our trading partners in recession, China’s growth slow down for the first time in seven years, Japan go back 4.6 per cent in the last 12 months and the effects on our trading partners’ economies wash across our shores as well. For the next year or so we are going to do it pretty tough in Australia, and any help we can give small business is always worthy of consideration and support.

Broadly, a small business is a business that had an aggregate turnover of less than $2 million in the previous income year. I know that in my electorate of Blair there are many, many businesses which have turnovers less than this. I go through the big shopping centres in my electorate and see small business operators everywhere at shopping centres like Riverlink, Yamanto Shopping Village and Brassall Shopping Centre. All those shopping centres have small business operators, people who are real entrepreneurs and who have taken the risk. They should be rewarded and supported. If we can help them in any way, that is terrific.

The amendments in this schedule are aligned very much with what the Rudd Labor government is doing to help small business across the country. We have announced a $42 billion Nation Building and Jobs Plan to build infrastructure. Things announced in my electorate of Blair in South-East Queensland will help small business—like trade training centres in Ipswich and the Lockyer Valley. They show the assistance we are giving small business as well, because small business employs tradespeople: carpenters, plumbers and people who work in the other wet trades. Helping our tradespeople and building industry is really important in Ipswich, where the growth in population is so rapid.

Small business operators in my electorate have warmly welcomed the stimulus packages announced last year and earlier this year. I also think the $2.7 billion tax break to allow small business to claim an additional 30 per cent tax deduction for eligible assets costing $1,000 or more is tremendous for small business. That is extremely helpful to small businesses who thought about bringing in a new computer system but could not do so, or thought about bringing in a new lathe or buying some more equipment for their business. That is important because now they have a chance to get an increased tax deduction in those circumstances. That will help the operators in manufacturing areas such as Wulkuraka, Ipswich and Raceview. It will help them to achieve what they need to do.

The small business advice we are giving in rolling out business enterprise centres throughout the country is also helping small business, just like the amendments in this legislation. The Ipswich Business Enterprise Centre in my electorate is dealing with not just Ipswich but the rural areas outside as well. It is functioning, operating, helping, mentoring and giving advice to small business. For those people who want to take a chance—tradespeople, those who want to set up business or a franchise or who just want to get ahead and do the best for their family—business advice is really important. Giving money to assist businesses in their pockets and business advice from business advisory services located in suburban, rural and regional areas is so helpful to small business. It beggars belief that those opposite are not supporting our Australian Business Investment Partnership. The Property Council of Australia supports it and the big banks support it—they are putting money in to support it. But those opposite seem to be opposing it. They say they support jobs, but Treasury says we will lose up to 50,000 jobs if foreign banks leave this country. So helping business by establishing the Australian Business Investment Partnership is so important in the commercial property sector in Ipswich and the rural areas. Guess what? Those commercial enterprises employ small businesses. They employ independent contractors and tradespeople to work in those sectors.

The investment in local schools in my electorate is very important too. Yesterday, during the MPI, I announced a number of schools which were looking forward to bringing forward projects. One of the schools which I mentioned, All Saints Primary School at Boonah, is bringing forward their property development by five years. Bethany Lutheran School, which is a little school of about 200 in Ipswich, is bringing forward its redevelopment by about four years as a result of what we are doing. This is making a real difference, because schools cannot just think, ‘We’ll reconstruct our school’. It gets done by tradespeople and architects, and they are so excited about that. That will help small business in my area and small business generally. This is the biggest school modernisation program in history, supporting construction and tradespeople and small business across the country.

During the many mobile offices I run across Ipswich and the rural areas, what really strikes me is the number of people that come to me and say, ‘I am going to buy a house. I am going to build a house. I haven’t done that before, but I am going to do that.’ We have seen nearly 30,000 first home buyers enter the property market to the end of January as a result of the increase in the first home owners grants. These are practical ways to help small business, because houses get built by trades people and businesspeople. In my electorate it was announced that 133 new homes were to be built, mainly on the south side of Ipswich, by local tradespeople—a $36.3 million injection into the local economy. This is extremely important for building confidence in the Ipswich and rural areas. Tragically, we saw a rise in unemployment in the Ipswich and West Moreton areas of about 400 last month. But delivering 711,000 new training places over five years, and the recent $298 million commitment with the jobs credit account, will make a big difference to helping those people in their transition.

One of the most exciting aspects in my area to help small business and business generally is the redevelopment of RAAF Base Amberley near Ipswich. It is getting an injection of $1.1 billion by the Rudd Labor government, and that is having a big impact locally in terms of investment, infrastructure and jobs. So investing in roads and infrastructure is really important to help small business. In my area you can see the impact on small business of changes brought in by the jobs plan. You can see what it is going to do to help small business, so the schedule 1 amendment, which provides instalment reduction for small business of 20 per cent, will have a big impact on the small businesses that operate locally. It is to the credit of the government that we have undertaken this task, because helping business is just so important.

I have said before that those on this side of the House are the real advocates of free enterprise. We are the real advocates of free trade and the free market. We support business because we believe that giving people the opportunity to earn an income, to advance in life and to uplift the economic development of themselves and their families is what Labor is all about. It is lifting people up. It is helping people who come from disadvantaged backgrounds, giving them an education, giving them decent health care, giving them help in business. That is what the great Labor tradition is about: nation building, jobs planning, helping the economy and helping small business. I commend the bill to be House.

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