David Coleman (Banks, Liberal Party) Share this | Hansard source

What those opposite say—and this is a good one as well; this is worth reflecting on for a moment—is that a big business is a business with revenue of $2 million or more, that if you have $2 million or more you should not get a tax cut. I think they think that a business with $2 million of revenue is a business that makes $2 million. But it is not, because the average business makes a very, very small operating profit margin. It might be five per cent. So, if it has a turnover of $2 million, it might be taking home $100,000 at the end of the year, which is not much more than the average wage. Those opposite say that is a big business that should not get a tax cut. Again, it would be really interesting for the shadow Treasurer to explain why a business that might be making 100 grand is a big, bad, evil corporation that should not receive any tax relief. It really is quite extraordinary. That is why it so important to reject these very shallow and superficial ideas of those opposite and to support vigorously the enterprise tax plan the Treasurer has put forward.

This is going to help Australian businesses a lot to invest more in the Australian economy. You would think that we would all want to see that. We know we are in a globally competitive world, and it is effectively a race to attract capital. We have people like Singapore, not far away, at 17 per cent; the UK going down to 20 per cent; and there are proposals for the US to go as low as 15 per cent. From the member for Parramatta's logic, it is all okay because it does not matter what the tax rate is, because business will just invest the same amount anyway. On that logic you may as well make the tax rate 70 per cent and they will just keep investing. That is clearly not such a good idea.

What you need to do is ensure that your tax rate is in fact very competitive. That is what the government and this Treasurer are focused on doing. We start with those smaller businesses of up to $10 million—there are many great businesses in that area in my electorate in Padstow, Revesby, Mortdale, Peakhurst; they are some of the key industrial centres in the Banks electorate, but of course they are all around Australia— and we then gradually provide that tax relief to all corporations, including big corporations. Because—guess what?—they also employ millions and millions of people.

According to some numbers that the ATO has put together, close to five million people work for small business. They are the biggest employer in the private sector, and it is absolutely appropriate that the tax relief starts with them. It is also the case that there are millions of people who work for medium-sized and big businesses. Those people benefit when those larger businesses invest in the Australian economy. Those opposite say that those large businesses will do exactly the same thing regardless of what their tax rate is. That is ridiculous—it is like primary school proposition. These corporations have people, some of whom are paid a lot of money, to do calculations on investment proposals, Big businesses might be looking at investing $100 million in a project and—guess what?—if they invest $100 million in a project, they employ heaps of people in the process. When they go through that process, they calculate the rate of return on that investment and that includes tax. If there is less tax, there is more investment—and that is an absolute economic fact.

Medium-sized businesses, as defined by the ATO, employ 2½ million people but more than three million people work for large businesses. The notion that large businesses are disconnected from the Australian people and that they are bad, nasty, evil corporations that should not be provided any tax incentives to further invest in our economy is absolutely ridiculous. The notions of those opposite on capital gains tax and their definition of what a small business is demonstrate an abject lack of understanding of the most basic fundamentals of the Australian economy. It would be funny if it were not so serious. These are the people pretending that they could handle levers of the Australian economy. They could not—it would be disastrous for the nation. It is so important that we get this Enterprise Tax Plan through the parliament to support Australian business.

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