Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

They reneged on that promise in 1996. It pays to listen to the debate before interjecting. In 1996, they promised the Australian people they would not interfere with the increase to 12 per cent and they reneged on that promise.

Another measure in this bill will remove the instant asset write-off for small business. It sounds like some sort of arcane tax measure and maybe it is. Actually, it is a small business tax cut, which the previous government introduced. It was a measure to reduce the red tape compliance burden on small business. When Labor came to office in 2007, small businesses could write-off any investment under $1,000 without all the red tape burden which normally goes with that. The previous government increased that threshold to $6,500 so that there was much more that small business could just write-off without the red tape burden. At the last election, we had a commitment to increase it further to 10 per cent.

This bill takes it back to 2007 levels, back to $1,000. We hear a lot from this government about small business. They say that they are the party of small business. We hear a lot about red tape. They are strong on rhetoric, short on action—not only that, counterproductive action. In one of the first pieces of legislation they are bringing before the House, this government want to increase taxes on small business and increase the red tape burden—increasing taxes on small business by a billion dollars and increasing the red tape burden on any small business that chooses to make an investment between $1,000 and $6,500. Now there is not only the cash flow impact but the red tape impact.

I wonder if the member for Kooyong is going to speak in this debate, the member who has been tasked by the Prime Minister to cut red tape. Is he going to support this measure which will increase the red tape burden on Australia's small businesses? We will oppose this measure because we do not actually believe just in the rhetoric about small business; we believe in action to support it. We are proud of our pro small business reforms. We saw this red tape burden and we lifted it from small business, and this government are going to reimpose it. It is not just us who say this; the Australian Industry Group said of the increase in the threshold of the small business asset write-off that it 'will add complexity and compliance costs for eligible small businesses.' This change in the law will increase red tape and affect cash flow at a time when the government needs to be looking to boost non-mining investment as investment in the mining sector winds down. It will be a stymie to investment from the small business sector.

This is a very significant measure that this government are seeking to abolish. It will increase taxes in up to 2.7 million small businesses. It is not just that. This bill also abolishes the loss carry back. Again, it might sound like an arcane tax measure. Loss carry back is a measure not just for small businesses; it encourages innovation and a bit of risk-taking. It says that if you make a loss in one particular year, you can take that into account in future years. I would have thought that it was something that this government would embrace with all their rhetoric about entrepreneurialism, innovation, risk-taking and private enterprise. I would have thought they would embrace this measure, and would have congratulated the previous government for introducing it. But, no, we see them abolishing it in the first sitting fortnight. This will be a hit to businesses of almost $1 billion over the next four years.

Then we get to the accelerated depreciation of motor vehicles for small business. Again, we have heard a lot from this government about the importance of the car industry and the importance of tax treatment for the car industry. This would allow a small business an immediate $5,000 deduction for a vehicle costing $6,500 or more. So do not lecture us about the car industry, when this accelerated depreciation is being taken away by this government, an impost on small business and an impost on the car industry. Let us see this impost play through the car industry. We will be having a bit to say about that and holding the government to account for its impacts. We will not be lectured by this government about fringe benefits tax or any other measure when this new government are actually abolishing the accelerated depreciation of motor vehicles for small business.

The final matter I am going to speak about is one that I know is very close to the heart of the member for Jagajaga, who has joined us in the chamber—that is, the schoolkids bonus. We hear a lot about cost of living, as we should. We heard about cost of living before the election and we hear a lot about cost of living after the election. We get lectured in this chamber about what we should do about cost of living. Well, let us have a talk about cost of living and about government measures to support families dealing with the cost of living.

Something that helps families deal with the cost of living is $410 a year for primary school students and $820 a year for high school students. If a family has two children, that amounts to $15,000 over the course of their schooling life. I think that might help them with the cost of living just a little. I think that might actually help families deal with the cost of sending their children to school. I think that taking 4½ billion dollars from Australian families might be something we might want to talk about in the cost-of-living debate. We might not want to be lectured by this mob about the cost of living when they are putting legislation into this House to take away $15,000 out of the pockets of Australian families.

We hear from the government, 'The minerals resource rent tax has not made as much as we thought or you thought, or was predicted; therefore, we have to abolish this measure.' There is one little problem with the government's equation. The minerals resource rent tax was never designed to pay for the schoolkids bonus. If you look at the announcements at the time, the minerals resource rent tax was never introduced to pay for the schoolkids bonus. They were completely separate policies. If this government want to abolish the schoolkids bonus, it should have the guts to put it in separate legislation, bring it into the House, bring it into the other place and see how you go. Try your luck, because it was not paid for by the minerals resource rent tax. It never was. So how dare this government incorporate it in the same legislation? Do not talk to us about cost of living when you are taking money away from Australia's families with school children and putting it in the same legislation as the mineral resource rent tax. It was never paid for by the minerals resource rent tax.

The schools kids bonus was designed to replace the education tax rebate introduced by this government. That is where it came from. I looked through the legislation and I thought, 'Well, maybe if they are abolishing the school kids bonus then maybe they are at least reintroducing the education tax rebate.' No, they are not. While I am at it, the accelerated depreciation of motor vehicles, which I talked about before, was replacing the entrepreneurs tax offset, not reintroduced by this legislation either. It is the same problem.

This government has some consistency issues to deal with. I really look forward to hearing from honourable members opposite because they have some explaining to do. They have got to explain to Australian families how taking money away from the school kids bonus is going to help the cost of living. They have got to explain to Australia's low- and middle-income earners why every single one of them over there thinks it is fair that they should get zero tax concession for saving for their retirement. And they need to explain why they think somebody with $2 million in their superannuation account deserves quite a good tax concession, thank you very much, but somebody on $37,000 or less deserves not a bit less but zero tax concession to save for their retirement.

We think it is unfair and we will vote accordingly because this is a debate about values, not just priorities but values. Our values tell us that the school kids bonus is important. Our values tell us that the low-income superannuation contribution is important. Our values tell us that the small business tax concessions are important because we do not just talk about small business; we do not have empty rhetoric about how they are the backbone of the nation; we actually do things that help small business; and this government is taking them away.

My challenge to the government is this: tell us why it is fair. Tell us why it is better for small business that they do not have the increased thresholds for the instant asset write-off. Tell Australia's families why it is fair that they lose the school kids bonus. Tell Australia's hard-working low- and middle-income earners why they should receive zero tax concessions for their superannuation. When they tell the Australian people that, I think the Australian people will have a fair bit to say about it. We will certainly be having plenty to say about it in this debate in the weeks, months and years to follow.

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