Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

It is with great pleasure that I rise to speak today in support of the Tax Law Amendment (Small Business Restructure Roll-over) Bill 2015 in its original form.

This is an important bill that plays an important role in assisting Australian small business, the backbone of our growing economy. The small business restructure roll-over bill seeks to amend taxation laws to allow small businesses to change their entity structure without incurring a capital gains tax liability at that point in time. With more than 11,000 small businesses in my electorate of Forde, I believe this amendment will help support this vital sector of our economy.

Small businesses account for 97 per cent of all Australian businesses, employing more than 4.7 million people and producing over $340 billion of economic output each year. In a time when our economy is transitioning from a mining-construction boom, it is more important than ever that the government is providing the right economic environment to help our small businesses grow and invest. We want Australian small businesses to back themselves with the assistance of the government, to give them the confidence to do exactly that.

To do this, the coalition government announced the $5.5 billion Jobs & Small Business Package in last year's budget. Already our government has passed legislation for the 1.5 per cent small-company tax cuts, the unincorporated small-business tax discount, immediate deductibility of assets under $20,000 and the immediate deductibility of professional expenses. Small businesses that provide their employees with work-related portable electronic devices will also be allowed a fringe benefit tax exemption from April 1 this year.

This bill contains the final tax measure from the Jobs & Small Business Package. Schedule 1 will allow small businesses to change the legal structure of their business and to have the capital gains tax liability disregarded and deferred until eventual disposal. This measure is important in reducing administrative burdens and cash flow impediments for small businesses.

Sometimes a small business will start operating with a legal structure that is not necessarily best suited to the owner's needs as the business grows. This can occur because they did not receive correct advice, or the advice was inadequate or because the business has developed beyond the original aspirations of its owners. For small business owners who find themselves in this situation, the burden can have a massive impact on them financially.

To remedy this situation, a small business owner could choose to restructure their business, but currently the restructure would likely require the owner to pay capital gains tax on the assets of the business, even though there is no change in its ownership. This aspect of the tax laws means small businesses are effectively locked into the structure they choose, when many small business owners do not have the time or money to seek professional advice on the best legal structure for their business. To resolve this problem, the measure in schedule 1 of the bill will allow small businesses to roll-over assets from one entity to another, providing the underlying economic ownership of the assets remain unchanged.

This bill has a cost to revenue of some $40 million over the forward estimates period and, along with other tax measures announced in the 2015-16 budget, will provide more than $5 billion of support to Australia's hard-working small business owners.

The coalition government is proud of its commitment to Australian small business through this package of measures. We are the government that is creating the right environment to back small businesses in our transitioning economy. In my electorate of Forde, small business provides thousands of jobs for people in our community. Our everyday small business owners are anything but ordinary. They have great ideas and great vision, and can change our country for the better.

Our government policies are focussed on backing these small business entrepreneurs. We want small business to be strong, successful and to create jobs and opportunities across the country. It is this government that will continue to foster an entrepreneurial culture and reduce red tape and regulatory barriers so that small business owners can take advantage of the opportunities to grow and diversify their business and adapt to our transitioning economy.

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