Sarah Henderson (Corangamite, Liberal Party) Share this | Hansard source

I rise to speak on the Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015. This bill, like so many of our other initiatives in our budget handed down on 12 May, reflects our government's strong focus on jobs growth and opportunity. This bill recognises that small businesses cannot grow and prosper and become bigger and more successful businesses unless they get the right start. Just consider how quickly the world is changing. This is something about which the Treasurer has spoken often. Facebook is the biggest media company in the world and it does not employ a journalist. Uber is the biggest taxi company in the world and does not own a taxi. Airbnb is a global accommodation giant and does not own a single piece of real estate. At the heart of their success is a great idea supported by great innovators, great financial backing and the right regulatory environments to inspire investors to invest. Great ideas do not turn into great businesses without first creating the right investment climate.

This bill is all about driving innovation by helping to build investment confidence and, very importantly, those incentives. I am delighted that this bill rights the wrong that has been a real drag on driving investment in start-ups. I do not say this with any sense of rhetoric at all. Just a couple of weeks ago I attended a function and spoke to a gentleman who runs a relatively new internet business. It is going well. Sales are improving. But it has the potential to grow into a very major business. He told me that he could not wait for the rules to change on 1 July when our new employee share scheme comes into effect. This will give his employees great incentive and will give him a great way of partnering with his employees to ensure that his business goes from strength to strength.

I welcome the support of members opposite on this bill. I want to particularly recognise the positive comments from the member for Chifley, who has indicated his very strong support for this bill. As we have heard in this debate, back in 2009 under the previous Labor government a number of changes were made to the way employee share schemes were taxed. One of these changes meant that the discount component of shares or options issued under any employee share scheme were taxed when the employee received those shares or options. I accept the member for Chifley's remarks that these were unintended consequences. Nonetheless, it demonstrates that perhaps the previous government did not properly consider the way in which it changed the employee share scheme, because it had a very significant and serious consequence. It meant that employees were forced to pay tax on their options before there was any opportunity to realise a financial benefit on those options.

Very importantly, the changes contained in this bill will better align the interests of employers and employees and do much to stimulate the growth of start-ups in Australia. It is incredibly important that we do everything that we possibly can to do that. Just to reiterate the main changes in the bill, for all companies, employees who are issued with options will generally be able to defer tax until they exercise the options or convert the options to shares rather than having to pay tax on those options vest, and eligible start-ups will be able to issue options or shares to their employees at a small discount and have that discount exempted or deferred from income tax. This is a very important part of our very strong support for small businesses. We are seeing a very strong realisation that, if employees can have skin in the game, it follows that they will be more involved and more interested in a company's future, working together, hand in hand, with the company owner to ensure that the company goes from strength to strength.

I think the member for Chifley said this is only one part of the solution. We have seen in our budget a comprehensive package of solutions for small business to drive jobs growth and innovation. I reflect on the 1.5 per cent company tax cut that we have announced, and for businesses which are not incorporated there is a tax discount of five per cent. They make up some two-thirds of all small businesses. These are the forgotten businesses under Labor. In the Leader of the Opposition's budget reply speech, he spoke about a five per cent unfunded discount or company tax cut that he intended to roll out, but we have heard no detail or proper commitment that that will ever happen. The Leader of the Opposition forgot that most small businesses are not incorporated. It is the sole traders, the independent contractors and the unincorporated businesses which make up the majority of small businesses. So that is perhaps one example of where Labor and members opposite have fundamentally let down small business.

Measures such as our $20,000 small business tax deduction, the instant asset write-off, have been broadly welcomed right across the Australian community. They reflect our have-a-go budget, as I have talked about often. We are encouraging businesses to go out there and spend and invest in their businesses to help grow their businesses. It is a wonderful incentive. I do have to say that when the Minister for Small Business was in Colac and Geelong last week he received a great reception. We hosted small businesses forums in both of those cities. These measures have been incredibly important in exciting the small business community. As Kylie Warne, the President of the Geelong Chamber of Commerce, said: 'We feel that small business finally has a voice.'

As a former commercial lawyer practising in intellectual property, I have to say that Australia has travelled a difficult road when it comes to supporting our innovators, our inventers, our businesses of today to become the giants of tomorrow. It is why this bill is so important, and it is why these initiatives are so welcome. I do believe the wonderful electorate that I represent, the people of Corangamite and the greater Geelong region, has the potential to become an innovation capital. I just reflect on the work of Deakin University. Deakin is now ranked 45th in the world for universities under 50 years of age. Deakin's medical school—an initiative of the previous Howard government—is doing wonders. There is incredible work happening in future fibres. Just last week we were very proud to announce a $4.7 million grant to Deakin University to establish an industrial transformation research hub. Deakin will be working in conjunction with a number of industry players, as well as with universities such as Oxford and MIT, to create a future fibres research hub. It is just an example of the wonderful innovation going on in Geelong at the moment.

We hear a lot about tech companies, but I want to reflect on the fact that innovation is not just about high-tech companies. Innovation should and is being applied across so many sectors of the economy. Advanced manufacturing is an industry, a sector, driven by innovation. We are a very proud home of advanced manufacturing, and I was delighted that Andrew Stevens, the new chair of the Advanced Manufacturing Industry Growth Centre—one of five growth centres being rolled out as part of an initiative of the Minister for Industry and Science—was in Geelong just a couple of weeks ago, holding a stakeholders round table. We are a great home of advanced manufacturing and we have great potential. That is why I am pushing so hard that Geelong become the home of the advanced manufacturing growth centre. There are wonderful advanced manufacturers like Marand, which is helping to manufacture the Joint Strike Fighter. Carbon Revolution, which are based at Deakin University, came out of some research done at Deakin university. Carbon Revolution are building carbon fibre wheels for the world; they are doing some extraordinary work. I will not hear, as I do often from members opposite, that auto manufacturing in this country is dead. I say: do not forget the 490 workers at Ford's product engineering and development plant in Geelong who are doing incredible work, high-tech work, innovative work, for the international car industry. Look at the likes of Carbon Revolution and what they are doing in supplying the global auto market: these are the global auto companies of the future. It is very, very exciting to see what is going on there.

We have also made a very strong commitment to conduct a pilot of a P-TECH in Geelong. The school is yet to be announced, so we are still waiting to hear which school has been selected; but it is incredibly exciting. This model has been very successful in America, particularly in New York, where it brings businesses together with high schools to help students develop an academic and industry path into the jobs of the future. It is a model which focuses very much on science, technology, engineering and maths working hand in hand with industry to present and provide students with those incredibly important opportunities in those sectors.

There is one missing link in Geelong. We are very proudly rolling out the NBN to some 40,000 premises across Geelong There are 35,000 by fixed line, another 2,500 fixed-wireless connections are in the planning and 2,500 are actually active. So we are again very, very quickly righting the wrongs that we saw with the disaster of the NBN under the previous government. However, I am working very hard at advocating that the rollout of the NBN be expedited in Geelong, particularly in Grovedale, Waurn Ponds, Belmont, Highton and Marshalls. These are very large growth areas in Geelong. There has been very significant growth in these areas and many residents are struggling with internet connections. So I can assure the people of my electorate, particularly in the Geelong suburbs, that I am working very, very hard at advocating an expedited rollout of the NBN

I am very proud to commend this bill today. This is a very important bill for innovators, for inventers. It reflects a strong support for small business, which is very much reflected through many of our measures in the budget. I commend this bill to the House.

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