Steve Irons (Swan, Liberal Party) Share this | Hansard source

I will just remind the member for Whitlam of something. He talked about the definition of a small business. Obviously, not many on that side of the chamber have run businesses; they think $2 million is a lot of money. Back in 1980, my small business—and it was a small business; we only had five people—was turning over $5 million as a company, as a small business. If their definition is turnover, it makes a big difference. It should be profit that marks whether it is a big business or not. There are many small businesses, as you would know, Mr Deputy Speaker Buchholz, that are turning over well over $2 million and are not making the huge profits that the Labor Party think that small businesses make. They do not make those huge profits and they should understand that.

I rise today in strong support of the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016—a plan which is an integral part of this government's reform agenda to improve the state of Australia's tax system. It is a promise the coalition made to the Australian people in the budget—the same budget we took to the election. It was the election we won, which is proof the Australian people are supportive of this coalition government's economic plan for jobs and growth. I only hope Labor can put politics aside to ensure this important plan goes ahead, supporting greater investment and, in turn, more jobs for hardworking Australians.

As I mentioned, the enterprise tax plan is a key component to our economic plan. The enterprise tax plan benefits employees because, when businesses pay less tax, it frees up more money to pay employees more and, of course, give them more hours of work. As you know yourself, Mr Deputy Speaker Buchholz, it is all about return on investment. The more return we can make the better we can put that back into the economy and put it back into employees' pockets as well. It is known that lower taxes allow businesses to invest in themselves, allowing room for capital purchases, more equipment or more machinery and, in turn, requires them to invest in people, offering more hours and actively supporting growth and higher wages. It provides employers with the confidence for them to invest and grow their businesses. As we know on this side of the House, that effectively grows the Australian economy.

Our economy is transitioning. As a member in the great state of Western Australia, I have seen firsthand the positive impact of the investment phase of the mining boom, but now it is time for us to adjust as we transition into much broader based growth in our economy. As we do this, Australia is still growing faster than every G7 economy and our growth continues to be above the OECD average, which shows we are successfully transitioning our economy. I also remind those on the other side of the chamber that part of the slowdown in the Western Australian economy was due to two taxes they implemented: the mining tax and the carbon tax. They were both anti Western Australia taxes. To further this, it is time to give businesses the opportunity to invest, innovate and grow, and develop the support mechanisms for them to do so. To ensure we are best equipped to do this, now more than ever is the time to be supporting businesses and assisting them in their growth and, subsequently, job creation. That is why this enterprise tax plan is so important. It looks to encourage private investment. It looks to generate broader based growth for our economy.

For the benefit of the House, this bill makes a number of amendments to tax legislation to implement our budget commitment to progressively reduce company taxes over the next decade. The measures in the bill include an immediate reduction to the corporate tax rate to 27.5 per cent for the 2016-17 tax year for small businesses—that is, corporate tax entities with an aggregated turnover of less than $10 million. There are more measures in the bill and I will get to those later.

The enterprise tax plan is fully funded and, as a 10-year staggered approach, will decrease the tax rate on all companies to 25 per cent by 2026-27—a plan which is not only providing certainty to business but also avoids a concentrated short-term impact on the budget. We heard before the member for Parramatta talk about other countries that invest in Australia having higher tax rates. I would like to correct her. She stated that the USA had a higher tax rate than the Australian economy. They currently do, but they have already signalled that they are going to reduce their tax rate to 15 per cent by the end of the year. So that was another false claim by those opposite with regard to this bill. This means a lower tax rate for around 870,000 businesses employing over 3.4 million workers across Australia.

On 15 September last year, the Senate referred the provisions of the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016—this bill—to the Senate economics legislation committee for inquiry and report. I read the Labor senators' dissenting report on the bill. After suggesting a number of amendments, the Labor senators' report notes—and I am sure you will be surprised by this:

Labor Senators also call on the Government to abandon fiscal recklessness and instead work cooperatively to continue the work of budget repair in a way that is fair.

Again for the House and for you, Mr Deputy Speaker Buchholz:

Labor Senators also call on the Government to abandon fiscal recklessness and instead work cooperatively ...

I would say that is an absolute joke coming from that side of the House when you saw the six years under the Rudd-Gillard-Rudd government. For them to talk about fiscal recklessness, they have obviously forgotten about the carbon tax, the mining tax, pink batts, the BER—all the things that drove our economy into deficit and debt. I strongly suggest that side of the House take their own advice. After the six years of fiscal recklessness seen in the Rudd-Gillard-Rudd government, they should work cooperatively with the coalition government in achieving real outcomes that contribute to our economic plan.

My electorate of Swan has close to 20,000 businesses. Within Swan we have the Kewdale-Welshpool industrial hub, the Belmont Business Park and Technology Park Bentley. Within Victoria Park, where my electorate office is located, is a cafe strip and multiple car yards. There are about 100 car yards in my electorate. In fact, I have spoken previously in this chamber about Victoria Park becoming a centre for junior sport and elite sport, with the new stadium due to be completed by early next year and an AFL training base located at Lathlain Park, to which the coalition gave $10 million for a $67 million infrastructure project. It has a long been a thriving area for small business in my electorate.

Might I mention that the coalition government also granted $6 million to the City of Belmont through the National Stronger Regions Fund, round 1, for the $12 million Belmont Business Park project. This project plays an integral role for small businesses in Swan as it aims to boost the revival of the City of Belmont's major business area by creating opportunity for the growth of a more diverse economy which will offer more job opportunities to meet the needs of the region. Also in my electorate, the Kewdale-Welshpool industrial hub is a key manufacturing area in Western Australia. It is also a premier freight and distribution centre that employs many of my local constituents. Over my nine years as local federal member of the area, I have made many connections in the Welshpool hub at the transport hub of Western Australia. In fact, I started my own business in Anvil Way off Division Street in Welshpool way back in 1988 and worked in the air-conditioning and refrigeration sector for over 25 years.

As you would know yourself, Mr Deputy Speaker Buchholz, the experience as a small-business owner can be very rewarding and very taxing. How you are going to pay the bills and how you are going to pay the wages keeps you awake at night. You put everything on the line. This is why the coalition government has an economic plan to support small businesses: to help them grow and prosper, and employ more people.

An example of a small business owner in Swan is Gem Gautam, who owns the Busy Bee Deli in Como. In October 2015 a fire destroyed the deli. Just over a year later, in November last year, Gem was able to reopen his deli. But this would not have been possible without the support of local community members and other local businesses. You see, Gem had never started from scratch before. So, he said, it took a lot of patience as he had to deal with the council, architects and tradies who helped him along the way and taught him a lot. In the local newspaper, when he re-opened his deli Gem said it was the support of the community that spurred him on to reopen the business during the 13-month period when he was unemployed. He said when renovations were going on people from the community and other businesses would knock on his door and ask when the deli would be open. He said that some of the local businesses gave him discounts, which he was thankful for.

As you can see just from that example, small businesses are an integral part of the Swan community, and all of them play a big part in driving the Australian economy. But, for too long, local business owners not only in my electorate of Swan but across the country have been forced to watch their own incomes decline and to reach into their own pockets just to keep people in work. This has meant people have kept their jobs and wages to support their families, but at a great cost to many small-business owners. For too long now, small businesses have been forced to make great sacrifices for this nation's economy.

Running small businesses seems to be a common theme on this side of the House. We have business experience. Many of my colleagues over here on the government side have real-life business experience which holds us in very good stead as we take measures like this that actively support and encourage Australian businesses. The member for Wright—you, Mr Deputy Speaker—ran a very successful trucking business in Queensland. The member for Gilmore ran a fudge-making business. Our Treasurer was a CEO and senior executive in various industry bodies and government agencies. I could go on. I know there are numerous of those. I see another member—one from the Nationals—sitting in here. The member for Flynn still runs and owns businesses. On the other side of the House, there is, I have noticed, a lack of business experience. It has been an ongoing obstacle in achieving real outcomes for Australian businesses. But what do you really expect from the Labor Party, whose experience in small business is as extensive as their understanding of how this bill will support local businesses and trigger economic growth and resources?

The Australian Chamber of Commerce and Industry announced last year it supports the government's Treasury Laws Amendment (Enterprise Tax Plan) Bill, particularly the progressive reduction in Australia's company tax rate to 25 per cent for all businesses by 2026-27. The chamber also made a submission to the Senate inquiry, which I agree with far more than I do the Labor senators' report. Treasury modelling indicates that by reducing Australia's company tax rate from 30 per cent to 25 per cent, we would be boosting Australia's national income by 0.6 to 0.7 per cent, including a 0.4 to 1.1 per cent increase in take-home pay for workers. In their submission, the chamber notes that this boost in living standards should provide support for our government's proposed company tax reforms. It includes a two-page table that provides reasonable and factual responses to many of the poor objections made by those across the other side of the House.

Similarly, the Business Council has also thrown their support behind the bill, noting, 'Australia is falling behind in the global contest for new investment,' and highlighting the need for Australia to remain competitive in, and attractive for, investment. I refer to one of the key points made in the Business Council's submission, which I think will resonate in this chamber:

Choosing not to pass this Bill in its entirety would be a decision to let Australia fall further behind other countries and give up on competitiveness and building future prosperity. It would be a decision to continue imposing self-inflicted harm on the Australian economy, workers and households. We cannot afford not to pass this Bill.

Again, they said, 'We cannot afford not to pass this bill.' These recommendations and this resounding support came from a range of industry associations and industry bodies. Yet, thoseopposite still cannot quite grasp the benefits andimportance of these measures—which, come to think of it, is quite surprising given thatin 2011 the Leader for the Opposition himself said:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Has he backflipped on that? We have not heard about that, but I could not have put it better myself. In addition to this, the shadow Treasurer, the member for McMahon, in 2013 in his book Hearts & Minds wrote:

… it's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

It is a Labor thing. I tend to disagree with the member for McMahon because the only Labor thing we have seen in relation to this bill is cynical and opportunistic politics that now is the greatest threat to the Australian economy. But it does not stop there. In addition to this, the shadow Treasurer told the ABC's Lateline in 2014:

I'd like to see it lower over time. I think we've had 14 years of having the corporate tax rate stable. That's too long. Over time, I'd like to see it lowered.

But it gets even better. He continued:

As the alternative Treasurer, I'm telling you that I think it would be a better thing if Australia's … tax rate was more competitive …

These are statements they have made again and again, but they are all backflipping on them now.

After proposing just that, the shadow Treasurer—or the alternative Treasurer, as he likes to call himself—says he cannot support this bill. Labor is demanding that small- and medium-sized businesses pay nearly $5 billion more in tax but is refusing to support more than $6 billion in savings in our welfare system to get the budget back into balance. As they say, it is the Labor thing to want Australians to pay more tax to support a larger welfare system.

In contrast to this, our government—through this bill, the National Innovation and Science Agenda, the crackdown on multinational tax avoidance and a range of other measures—is proactive in its efforts to raise the living standards for hardworking Australians. This bill is designed to drive investment in our economy, support jobs and wages. I commend the bill to the House.

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