Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Hansard source

If the government member does not want to extend my time, I am glad to accept that. But if the government legitimately says: 'Where is the money coming from and how are they funding this?' then the only possible answer is that they are borrowing the money. Of course, if you do the sums, you would have to say that the government is now borrowing twice as much, because the debt is much bigger—the deficit has doubled. So this is curious accounting. I am sure plenty of accountants and economists can work it out and ask the government—and I will not do that here—where they are getting the money from, because I cannot quite see where the money is coming from. It seems to me to be coming from borrowings. But then again, I am not an expert or an economist.

So not only did the Liberal government cut the instant asset write-off and Labor's other tax assistance measures designed to help small business, but they did this in the face of really strong criticism and opposition from the small business and business sectors who actually told the government and the Liberal Party that they had really got this wrong and they should actually reconsider.

So, winding back the clock, as they did, and realising the error of their ways, the government have changed and we agree now that what the government is doing by reintroducing Labor's package of small business assistance is a good idea.

Labor's record on tax assistance goes much further and deeper for small business. And it is a good record. Not only did Labor introduce the instant asset write-off but it also introduced the tax loss carry back, which, for the first time, meant that companies could claw back tax that had previously been paid—tax paid in the past—against any write-offs they might have in the future. This was a really important assistance measure for small business. What it did was to recognise both small businesses that are of a company structure and those that are not. So there were different measures. There was accelerated depreciation for some small businesses and other measures like tax loss carry back for others.

We also recognise the need for small business and business to accelerate their depreciation for motor vehicles. Not only would this help them but it would also help the motor vehicle industry and a sector also reeling from difficult times.

Of course, those difficult times have not gone away. What we are seeing now is that the government should somehow be responsible—they are coming up to nearly two years in government—for trying to assist the economy and making sure that (a) people do not lose their jobs and that (b) small business survives. The strongest thing, as we would all acknowledge, that you can have in a good economy is a job. It is important that the government pay much attention to these factors.

Labor's tax assistance, of course, was for four years. When we put our measures in place we made sure that we gave business that certainty—that forward estimates certainty of four years. Curiously again, this Liberal government has only done it for two years. That is a very short time frame for business to operate in. You would find that most of them do their planning over many years, not just two years. It might suit the government in, let us say, a political cycle rather than an economic one to put forward only a two-year time frame. I know that businessmen I speak to say that they would much prefer more certainty from this government and that four years would be much better.

When it was combined, Labor's tax assistance was worth more than $5 billion over the forward estimates. Labor increased the instant asset write-off threshold from $1,000 to $6½ thousand, as I said earlier, and the number of assets that this applied to was unlimited. Our accelerated deductions for motor vehicles, loss carry-back for companies and the three tax assistance measures for small business provided a significant boost to small businesspeople and their ability to grow and to employ more people.

As an aside, but also related to this: it was Labor that gave one of the biggest tax breaks for unincorporated small business by tripling the tax-free threshold from a bit over $6,000 to $18½ thousand. This was a really important measure and gave significant cash flow assistance to small businesses—particularly microbusinesses. If we are going to have a coffee-machine-led recovery, as the government often talks about, then let it rain coffee machines! I am happy about that; I like my coffee as much as anyone else. But I think that what small business looks for is something a little more substantial from time to time—perhaps some real significant tax measures, like Labor's tripling of the tax-free threshold. Not only did that assist ordinary people and consumers but also small business as well.

Again: good, solid ideas, well implemented, did enormous service to our economy. I would really hate to think what our economy might look like today, and what the face of small business might look like, if Labor had not put all of these very serious measures in place. At the end of the day, the reality is that a government needs to have a vision for the future, a vision for innovation and a vision for jobs. That is certainly what Labor has done and what Labor continues to do, whether we are in government or we are in opposition.

Sadly, today unemployment is trending up and the long-term unemployment rate is unacceptably high. Sadly, this government has given up on the long-term unemployed. Australia currently spends around $30 billion annually on R&D across all sectors, and it is ranked 17th in the world by the Global Innovation Index. However when it comes to our efficiency at converting research dollars into innovation and commercial success we perform poorly, ranking 116th out of 142 countries. When you look at that data I do not think that would match up with everyone's interpretation of Australians being the great innovators and inventors, doing all those great things. In other words, more needs to be done. That is what this government ought to be doing.

Sadly, there is nothing in this budget for small business that will drive innovation, even though the minister likes to talk about it a lot—about how the government is going to help small business by removing obstacles to crowd-sourced equity funding, as one example. In fact, the minister has issued numerous media statements over the last 12 months, talking about what the government plans to do—what they are 'gunna' do. I would remind the minister and the government that it was Labor that consulted with the start-up sector last year on crowd-sourced equity funding, led by my colleague Ed Husic, and then released a discussion paper in 2014. Labor also supported the government's proposed changes to tax concessions for employee share schemes, and Labor has a proud record of supporting innovation.

The Leader of the Opposition, Bill Shorten, announced several initiatives in his budget reply address that have been welcomed by small business.    The new $500 million Smart Investment Fund is a great Labor initiative for small business. It will do a lot to bolster the way in which small business can innovate and grow. I have heard a lot of talk from the Liberal Party and the government about how they want lots of businesses to start up. I think that is a good idea; we should have as many starting up as possible. I would add something to that and say, 'We should have as many of them survive as possible as well, not just start up.'

Unfortunately, the government might want to 'launder' the data on starting up and say, 'Look how many are starting!' But they might run and hide when we see how many might also be failing. I think an important task for government would be to undertake policies that help not only in the start-up phase but in the growth phase and the employment phase, which transform a small business from being a non-employing small business—and I would like to see lots of them as well. The government need to be really cautious in the way that they scare small business when they talk about a so-called number of 519,000 job losses in small business. In reality, if you look at that closely you will understand that the 519,000 were a transfer: non-employing small businesses were taken out of that category—being listed and numbered in a register there—into a different category, meaning that they now employ someone.

We would like to see more non-employing small businesses become employing small businesses. I think that would be a fair thing. I think that it would be a really fair thing for the Australian economy if every non-employing small business could be encouraged and grow sufficiently to be able to sustain themselves and also employ someone. I would like to see that number showing even more transference from non-employing to employing; I think that is a good thing.

But we need to be careful about how we look at these numbers. From time to time I hear the minister talking about this 'loss' of jobs—that they were lost! A transfer is not a loss. They did not actually disappear; that 519,000 are no longer counted in this column, they are counted in another column. If you have a look at the numbers, where one reduced the other grew by that number. If the total pie—and this might be a little complicated for the government—of small business actually got bigger, so that there were more, then you cannot say that there were losses as well.

Inside that pie, some slices may have changed size but the overall pie got bigger. I know this is a nuance and that the government may not quite be able to work its way through this, but it is really simple: more is—

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