Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015, No. 3 of the government's four bills in this space. I acknowledge the contribution by the member for Herbert—a heartfelt contribution. He is a member who is well connected with his electorate, who not only leads from the front but is a generator of ideas. He is a driving force in his electorate. Having been up there recently, I know he is well regarded by his electorate and, I am sure, a strong, bold and humorous personality within the community. I congratulate you on the speech you just made to this House. It was heartfelt and to the point.

The member made some very pertinent points in his contribution around the government's earlier tax reforms, the No. 2 budget measures which we introduced into the House, which assisted incorporated bodies. These measures were well received at budget by many businesses, including those in my electorate of Wright. One of those measures was the $20,000 instant tax write-off. A company in my electorate by the name of Stark Engineering, trading as Warwick Cattle Crush, put on an extra five staff to handle the increased workload. They are an engineering company that build specialised cattle handling equipment in the way of cattle crushes. Their price point ranges from $5,000 a crush to about $20,000. What they have come up with is partnering with people on the land in what they call 'processing cattle', which is done on a yearly basis and involves taking the calves off the cows and processing the steers. It is quite a labour intensive task. This family has introduced a set of hydraulics into rams so that one person can, from a set of toggles, effectively replace three people in a set of cattle yards, with the use of automated doors and automated crushing. This also reduces the risk of harm to animals. The price point on their top-end range of products is around $20,000. When the instant tax deductibility write-off came in, benefits flew immediately into my electorate. This demonstrated in a real way how the Stark family set about filling orders for those businesses and operators who chose to take up one of the incentives that we provided through the budget. They were an incorporated company and so were able to take advantage of this measure. There are many in the small business sector who were unable to take advantage of it, and there are measures within this bill that provide for unincorporated companies—partnerships, trusts et cetera—to be able to take advantage of a five per cent tax deduction.

Most on this side of the House come from some type of small business background. I was a transport operator. I started with one vehicle. My wife and I gambled. That is what all small businesses do: they take a gamble. You think: 'I'm going to back myself in small business. I'm going to leave the secure job that I have at the moment and I'm going to try and cut out a life for me and my family and see if I can make it on my own.' That is the genesis, that is the motivator, of people making the transition into small business. I bought one vehicle, one truck, and started transporting goods up and down the road. A long story short: I ended up building from that single truck to 14 transport depots around the great state Queensland. I employed 105 permanent staff and had a payroll of roughly $80,000 every week. If I had thought I would have ever got to where I ended up then it was never my dream. I was never driven by the smell of success. I was always driven by the fear of failure.

It is that understanding of the value of money, it is that drive, it is that passion which I know is instinctively inherent in the members on this side of the House, because that is where we come from. That is our belief. That is why we generate small business packages that have such an inherent bias towards small business. The small business sector is the engine room of our economy: 80 per cent of the economy is employed through the small business sector. When we look at our macro figures of the national unemployment rate, yes, there are the large companies who employ a sector, but the bulk of it comes from small business. So, if you want to influence change in the unemployment statistics, the easiest way to do it is to incentivise small businesses to put on one extra employee right around Australia. If you assume that, across the nation, the average income is $700 or $800 a week in the small business sector, then to incentivise a small business to do that the government needs to take its hand out of the small business pocket. We are doing it in a number of ways.

The previous speaker mentioned our red tape reduction: 50,000 pages of red tape. That may not have a dollar figure associated with it from a small business perspective, but I know from a time perspective that if someone is out the back office working, toiling away on occasions until midnight each night, trying to process their daily accounts in order to open trading doors the next morning and be prepared, I would say that they are not productive hours. We need to incentivise businesses to have more productive hours that generate more cash flow so that with any savings that they can find they will hopefully do one of a number of things with it. You want them first to put on an extra employee to make their day a little easier. In the event that they cannot do that, let us ask them to hopefully take a holiday. I know in small business that many years can go past where you do not get a holiday. Guess what happens when a small businessperson goes away on a holiday? They will buy some airline tickets. They will stay at a motel. They will have a waiter wait on them at a restaurant or something like that. Again, it has that flow-on multiplier effect in any economy that they choose to land in. If they have a little bit of extra coin, they might even buy a new vehicle or invest in the community. They could invest in a car dealership that has a number of employees. What I am saying is that the genesis of creating wealth is from making sure that we have a tax environment for our small businesses in which they can prosper and go forward.

This bill speaks to a 1.5 per cent tax rate for unincorporated companies, at a maximum of $1,000 per taxpayer. If you are in a partnership with four partners, it is not $1,000 for the partnership; it is $1,000 for each partner. Also provided in the bill is an immediate deductibility for expenses for small business, and that is in and around professional expenses If you have reached out to a firm to do due diligence for you, or if you have incurred some cost in setting up the business from a professional services perspective, that amount of money would normally be amortised over five years at a rate of 20 per cent. There are provisions in this bill to allow you to bring forward all of that expense and deduct it in the first year. For someone who does not really have their head around tax deductibility, what does that mean? Predominantly, what it means is that—if your net profit was $1,000 for the year and your additional expenses in that professional services area were $500—you would only pay tax on the $500 rather than on the $1,000.

There are also some provisions for the fringe benefits tax and personal electronics devices. That was more of a tidy up. Previously, if you were a business owner you provided staff some tools of trade—for example, a mobile phone and a laptop or an iPad—bizarrely enough, the fringe benefit provisions only allowed that you were able to claim, as a business owner, on one of those items. This bill will address that. That is not going to change the orbit of our planet, but it is in there. It is a step in the right direction, and it moves us toward a more positive environment for small business.

Right in the heart of my electorate, there is a village called Beaudesert. Off to the right of Beaudesert, there is a planned industrial park. It is exciting, from a small business perspective. At the moment, it is just a cow paddock. It looks like outback Queensland. But the plans and the infrastructure that are set to go in there will provide a base for small business to be incentivised to come to Beaudesert and to Bromelton Park, and invest in the future and provide employment. The community are enthused about the new project that is coming to my area, even those who have finished work and are at the later end of their lives—people who have lived in Beaudesert or in the scenic rim and surrounding areas all of their lives. Property values have gone up predominantly with CPI. But, with the possibility of an extra 12,000 people in the community, we are starting to see upward pressure on housing prices. That is driven by small business. With those increased values, people start to become financially independent and, as a result, they start spending more money around town, and it flows on.

It is all about making sure that we get our first building block platform in place. I believe that the state government has made a $25 million contribution to put in some road infrastructure. There is currently an application before the state department for $9 million for sustainable regions. The local government, led by John Brent, has given a commitment of $6 million, in partnership with Urban Utilities, for water and infrastructure. We have three tiers of government lining up to invest large sums of money with the single purpose of trying to attract small, medium and large business to an industrial park. That just shows the focus on stimulating our economy through small business, not only by this government but by all tiers of government.

We all know that a vibrant community and the quality of life that Australians expect must be underpinned through a strong and robust small business sector. We all know that we must allow businesses to get on and make a profit. Profit should never be seen as a dirty word. We should encourage businesses to make profits—especially from a government perspective. That is because when people are making profits, they are paying taxes. With that tax revenue, government can invest in hospitals, in schools, in state government and in road infrastructure. Taxes are good. Quote me on that! Tax revenue is generated when business makes a profit. Most of our tax receipts come from the business sector—from those businesses that have taken the risk, that have gone on the journey, and that are now making a profit and making a contribution to our nation. It is right that this government—full of businesspeople in their own right before they came to the House—partners with small business to make sure that our nation can be the best that it can possibly be. This bill goes right to the heart of that purpose.

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