Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015, the third of four bills associated with great measures the government introduced in the last budget. I start on a bit of a sour note. I do not like to talk down my electorate, but there was some talk in the previous debate about unemployment rates, and, certainly, my electorate, which is home to virtually every resource project in South Australia, is feeling the brunt of the tailing-off of the resources boom at the moment. In a little over six months, the electorate has probably lost about 2,000 jobs in that sector. There have been lay-offs—limited lay-offs, it must be said—by Santos, up in the Moomba gas fields. There have been significant job reductions at Roxby Downs. In fact, since BHP announced a couple of years ago that they were not going ahead with a major expansion, we have seen large losses of jobs in that area, with another 380 announced just last week. Alinta Energy, in Port Augusta, which operate the only coal-fired power stations in South Australia, have announced their closure. Some time within the next 15 months there will be over 400 jobs lost. While some will celebrate the fact that coal-fired power stations are closing, this is an inevitable result of policies that both sides of government have pursued to reduce CO2 emissions. Largely, in this case, it is the RET which has been responsible for the closure of the power station. Many people will applaud that, but of course it affects the workers and the communities concerned. I have repeatedly raised in this place the impacts it will have on the fairly isolated South Australian electricity supply market. There will be more comments on that another day, I am sure.

We have also seen Arrium close down Southern Iron, which is a rather strangely named iron ore operation because it is in the north of the state; but it just depends where you stand, I suppose. Southern Iron put off 600 workers and closed down what was a relatively new mine. In fact, it had been operating for only about 18 months. We were exporting up to 13 million tonnes of iron ore a year out of the port at Whyalla. At the moment, Arrium are undergoing another review of the Whyalla operations—in fact, their operations Australia-wide. All those things are leading to a fair amount of angst in my communities.

The reason I mention them is that they are the big businesses. If you look around Australia, by and large, big businesses are doing it tough—and small businesses are as well, it must be said—and not employing a lot of new people. Throughout my time as the member for Grey, small business after small business has come to me and said: 'Doesn't anyone care about us? Don't you know that we employ 4½ million people Australia-wide. In fact, 96 per cent of all Australian businesses are small businesses, and don't you care about us? Do you people in government just want to drive us out of business?' Since the budget, I have had a different response—a completely different response. Small businesses are saying, 'At last somebody is listening to us.' Whether or not they can turn on the key overnight, I am not sure; but the Australian government has identified small business as the sector most likely to be able to deliver a faster turnaround in the Australian economy. If you like racing terms—and I know you are a keen observer of the racing circuit, Mr Deputy Speaker Jones—then let's say the Australian government is putting its money on small business. It is putting the taxpayers' money on small business. I always like to qualify that statement: governments do not have money; they only have taxpayers' money. We are putting the taxpayers' money on small business because they are the best opportunity. I make the point that there are over two million—about 2.1 million—small businesses in Australia. If only every fourth one were to put on an extra employee, we would for all intents and purposes be back to zero unemployment—about 2½ to 3 per cent. We all know that you probably cannot get below that in this modern world.

This third tranche of incentives to small business specifically gives to the unincorporated business the same tax break as I think tranche 1 gave to incorporated businesses. It was a 1½ per cent cut in their effective tax rate. In this particular case it is a $1,000 reduction on an individual's overall tax bill. It is roughly equivalent. This is really important, because there are a lot of small businesses, micro businesses, out there which do not have that company structure. In fact, so many businesses are run, as my farming business was, as a partnership. It is a perfectly admirable way to run a business. It does not make them any less a business than anything else. But if you are going to restrict your tax reductions to just corporations, to just registered businesses, then you are missing out a very important sector of the economy. That is the first one.

The second one is the immediate deductibility for professional expenses, professional advice, government fees and particularly start-up expenses for small business. These expenses have previously been deductible over five years. That is a pretty slow pay-off for somebody having to stump up the money to start a new business. What a great incentive that is! 'Look, mate, we're going to give you your money back over the next five years.' It is pretty tough. So I think this measure clearly recognises a problem that has been inbuilt in the system, because we want people to have a go. One of the things I think I said in my maiden speech was that governments should allow people who are able to help themselves to get on with the job. We should also help those who are unable for whatever reason to help themselves. But so many of these small business are those who are prepared to have a go, who are prepared to mortgage their house, to put it on the line, to start up a business to give themselves a job and hopefully maybe their children a job and also give their neighbours and friends a job. That is a great service to the community—and more power to them, in my opinion. The immediate write-off of those start-up expenses is a bonus, because there are enough obstacles in your road already when you are trying to start a business.

The fringe benefit tax exemption for portable electronic devices for work purposes just recognises the fact that work today is so flexible. It does not necessarily stop at five o'clock when you bang the bell. Often people need to take work home with them. They take their mobile phone home, they take their laptop home, they take their iPad home. There are a plethora of devices—maybe it is your diary or whatever that is synced in. Everybody has something a little bit different. In some cases, this is the only fringe benefit these workers get—the fringe benefit of being able to take their work home, I must say, with a smile on my face. It is the reality of today's workplace. So once again the government has said: 'We don't want to tie you up in red tape. We want you to get on with the job. We want your employees to be properly equipped and we want you to employ people.' That recognises those issues as well. This goes with the three tranches of legislation that we have previously put forward.

I can tell you, Mr Deputy Speaker, that as I drive around my electorate I can see that it has received a very warm response. Only the other day I was talking with a commercial pilot. He has taken the opportunity to put in a new $20,000 navigation system in his aeroplane. Everything in aeroplanes costs a lot of money—trust me, I know. He said, 'I would not have done this if it were not for the immediate tax write-off' but it is so much better flying the aeroplane now.' He showed me how it all worke It is a very smart little box of tricks, it must be said. In fact, he was showing me on one of the apps that he could plot every aeroplane in the world. He just brought them up. The sky is full of aeroplanes worldwide. It is an advance to his business; it is an investment in his business, and it is one that he would not have made if it were not for the change in the legislation.

One of the parts of this bill that I have been particularly enthusiastic about—I must say, as a farmer and someone who still owns a farm—is the ability to write off water catchment and storage over a much shorter period. I will give you an example. On Eyre Peninsula, which is the part of South Australia where my farm is, many places have clay subsoils. It is quite good. You can grade up some water runs and dig yourself a dam. The western half of Eyre Peninsula has sandy soils, and there are no surface dams. Water is pumped from a very long way. While we have a flat price across South Australia, stock water at $3.50 a kilolitre can be pretty discouraging for livestock investors. One of the things that modern plastics and technologies have brought us, of course, is that we can now dig a dam in dirt that leaks like crazy, line it with plastic, put a plastic top on it to stop evaporation, built a plastic water run, virtually drought proof your farm, and disconnect from the reticulated supply. I do not think many people will do that, because it will always be the backup.

But water being that expensive actually provides a real investment opportunity within your own farm. There have already been a number of these around on Eyre Peninsula. I could name about five or six without even trying. There are a lot of other farmers thinking, 'Yep, if I get a decent income year, I think I will have a go at this.' It will probably cost them $100,000, but, if you can write that off over two years instead of over that extended period, that becomes a real incentive to manage your taxation arrangements in the short term.

While it is not related to any of these bills, I also congratulate the government on the agricultural white paper, which has telegraphed the fact that we will be lifting the farm management deposit scheme caps. One of the points that I make is that changes in agriculture have seen farms get bigger and bigger. Many of the farmers I know are now cropping 10,000 or 15,000 acres year, which is 6,000 or 7,000 hectares—much bigger than the electorate of Wentworth, I might point out while the member is sitting there. So large tracts of land, it must be said. These are super efficient farmers. It is one of the downsides of Australian agriculture; I say every year that Australian farmers will grow more food and more fibre, more efficiently with better quality and, probably, at a price. That will be great for Australia, great for the state and not bad for the farmer who is still involved, but it will be an absolute disaster for our local communities, which is another story about how we deal with our local communities. So if they are able now to reinvest in their properties in a way which expands those properties, that it is very good thing.

I think that probably rounds it out pretty well, but these bills really do string together a coherent government policy, which is saying 'We recognise small businesses as a driver of the Australian economy.' Gee, I have heard that out of parliamentary members' lips a lot of times—and I have been the almost eight years now—'We recognise how important small business is.' But, up to now, not much has been done about it. That is why I am so proud of the last budget, and that is why I am proud of these bills. They are assisting small businesses to get on with the job and do what they do best.

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