Rick Wilson (O'Connor, Liberal Party) Share this | Hansard source

I rise today to speak on the Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017. This bill provides for the extension of the instant asset write-off provision, which was introduced in the May 2015 budget. The provision allows small businesses with a turnover of up to $10 million—it has been increased from $2 million—to claim an instant deduction on capital equipment up to the value $20,000. I thank the member for Macquarie for her support for this terrific initiative. It is good to see the member for Paterson here as well supporting small business. I suspect that these members will be trotted out fairly regularly when the opposition talk about small business. Their entire contingent is here, I think. It is good to see you are here supporting small businesses.

Mr Deputy Speaker Irons, if I may, I would like to use you as an example of a small businessman who has carved out a very successful career. I know that you were described as a 'privileged white man' during the election campaign, but I happen to know that you did come from humble beginnings. You got a trade and developed a very successful business. That, to me, embodies the story of small business—people can come from any type of beginning and if they have some initiative, are prepared to work hard and are prepared to take a risk, they can carve out a successful business and a very good life for themselves and their family. I take my hat off to you, Mr Deputy Speaker, for the success that you have made of your life and your business.

Before I get into the detail of the legislation and how it impacts on my electorate, I want to thank Minister McCormack, who visited my electorate of O'Connor several weeks ago, just before the budget was handed down. We held a series of forums. They were very well attended by very well-engaged small businesspeople across the electorate. The minister was accompanied by Kate Carnell, who is the Small Business and Family Enterprise Ombudsman; Dr Michael Schaper, who is the Deputy Chairman of the ACCC, and Les De Wind, who is an Assistant Commissioner with the ATO. I know that the small businesspeople across my electorate found those forums very useful. They were well attended. It was a worthwhile exercise. Once again, I thank the minister.

Just prior to the 2016 election, I was reading the Fairfax newspaper. The Treasurer had just announced a better than expected growth figure. Of course, our friends in the media—as we can always rely on them to do—were trying to find a negative spin on that particular number. I think it was about 2.75 per cent. It was about 0.5 per cent above expected growth. Fairfax were running a story, asking: 'Where is the poor growth? Where is the growth not happening?' This was so that they could identify some areas and go to town on us about that.

So I thought I had better read this story because I just wanted to know where my electorate of O'Connor sat in the scheme of things. I opened the story online and had a look at the table, and there, right at the top of the 150 electorates, was the electorate of O'Connor and of course the electorate of Durack, represented by my dear friend Melissa. There was 11.6 per cent growth in the case of O'Connor and I think 11.7 per cent growth in the case of Durack.

People may say, 'Well, these electorates have large mining interests in them.' At that point in time, in 2015-16, we were seeing a significant contraction in the mining industry. So where was this growth coming from? I can tell you, Mr Deputy Speaker Irons, that there is only one source where that sort of growth could have come from: the 18,765 small businesses across my electorate. So I salute them and I acknowledge their achievements. I say to them here in this place that this government is here to support them going forward.

I want to bring the conversation back to the instant tax write-off. I will use the example of a business which does not actually operate in my electorate, but which certainly sells an enormous amount of product into my electorate. It is the Heiniger company, which is run by a very good friend of mine Garry Lyon. They produce shearing gear, among other things, and also wool presses. The TPW wool press is the most-recognised brand of wool press around the country. They are far and away the best, and designed and manufactured in Western Australia down at Bibra Lake. As I said, that is not in my electorate but it is a wonderful business.

I asked the managing director, Garry Lyon, about 12 months ago, 'How's the instant tax write-off working out for you guys?' It just so happens that a wool press is about $19,990. He said that they just could not keep up. They could not keep up; they were putting staff on and trying to train people up but they just could not keep up with the demand. That is exactly what this scheme is about. It is about generating more jobs, more investment and more economic activity. This is one side of the equation.

The other side of the equation, of course, is to allow other businesses which need equipment or which need to upgrade equipment to purchase that equipment and get the tax deduction effectively up-front. So those are the two sides of the equation—stimulating demand for those businesses that produce assets in that price range and also for the businesses that require assets in that price range. Those may be new display cabinets in a deli or some new shelving in a newsagency. It is those types of investments back into the business, to stimulate demand for that business and to bring forward jobs.

I want to run through some of the different types of businesses across my electorate of O'Connor, because it is a wonderful and varied electorate. I am very proud that we have such a diversity of businesses. Of course, agriculture is a very important business across the electorate. I am a farmer myself so that is the industry that I understand the best and it is the industry that I am very proud of. Agriculture across the electorate of O'Connor produces around 40 per cent of the Australian wheat crop in an average year. We do dry land farming better than probably anywhere else in the world. I have been learning a lot about irrigated farming on the east coast as part of the agriculture committee and with the member for Paterson, and I am thoroughly enjoying that, but when it comes to dry land farming we are as good as any there is in the world.

The free trade agreements that the government has signed are seeing a real impact in our export activity, particularly in the areas of meat, wool and grains. That area of my electorate, that industry, is certainly going extremely well. There are subdued grain prices at the moment, admittedly, but there are record high beef prices, record high sheepmeat prices and record high wool prices. So we are going pretty well. We just need it to rain, and I am sure it will sooner or later.

We have a very significant horticultural sector down in the south-west part of the electorate—down around Manjimup and Pemberton. There are some wonderful businesses down there in the southern forests producing world-class produce. I know that people like the Newton Brothers and Harvey Giblett are exporting some of the best apples you will ever eat into South-East Asia. The Bendotties are exporting from their potato plant, once again into South-East Asia and doing great work. Those businesses are the sort of businesses that will be out there at the moment looking at their end-of-year financial figures and thinking, 'We can pick up a bit of new gear before the end of the financial year and write that off pretty quickly.'

Tourism is a very important sector in my electorate. There are thousands of small tourism operations, whether they be hotels, motels and cafes along the south coast and up through the Goldfields. They have been doing it pretty tough in many respects, but we are starting to see the wheel turn. Those businesses are well run and will make a big contribution going forward.

Forestry is a growing industry. We saw a lot of plantation going on 10 to 15 years ago, we are now moving into the harvest phase. There are some big businesses involved in the harvesting. The transport of those chips to the port is a very important aspect of that business. There are a lot of owner-driver small-business operators involved in that sector. With road transport, Southern Transport and Esperance Freight Lines are businesses that probably do exceed the $10 million, because they are very big businesses now that they have grown into substantial businesses. They have been extraordinarily well run in a very competitive environment, and those businesses have really outcompeted the competition from the bigger metropolitan areas. They are based in the electorate and I am very proud of them.

Certainly everyone would associate Kalgoorlie and the Goldfields with the mining industry. The mining companies are big businesses for the most part. Some of them started as small businesses. That is the great thing about the mining industry, particularly around the Goldfields: you can start off with a tenement, drill a few holes, find a bit of gold and all of a sudden you get to the share market, you get some capital and all of a sudden you can be a big business. There are a lot of people out there having a go at that. That is what I love about the mining industry, particularly the gold mining industry. But the mining industry requires a lot of support services. Those support services are mainly based around Kalgoorlie. They include engineering businesses. I have visited Harlsan Industries and taken the minister for industry there. I have been to Newlands engineering and taken the minister for resources there. These businesses are world leaders in what they produce. They are producing mining technology that we are exporting to the world, bringing in much export income to this country. They are world leaders.

Engineering is only part of it. We have tyre supply places. We have mechanics, we have hydraulic fitters. The number of small businesses around Kalgoorlie that service the mining industry is extraordinary. Those fellas up their work very hard. They work 12-hour days as a minimum, a starting point, and they work longer if they have to.

Those businesses work very hard and they do deserve a tax break. That is what brings me next to cutting the company tax rate to 27.5 per cent this financial year for businesses earning up to $10 million. I think that is a great initiative of this government. Those hardworking small-business people are out there growing our economy, contributing to that 11.6 per cent growth in O'Connor. They need a reward for their effort, so they are made to feel like the government does not just have its hand in their pocket taking the bulk of their hard-earned revenue.

I fear for those small businesses, because the opposition, it would appear, will reverse those tax cuts. It does not appear that they have accounted for that loss in revenue to the budget through the tax cuts in any way shape or form. So I fear for those small businesses that at the next election the opposition will be taking a tax hike to those small businesses. Of course, over time we are going to extend that 27.5 per cent tax cut to a 25c in the dollar rate. That could all be in jeopardy at the next election. But if we continue to govern and win the next election we will be extending the reduced tax rate to companies over $25 million and from 1 July 2018 that will be extended to businesses over $50 million. So that will pick up most of those businesses across my electorate, bar those very large mining companies.

There are a couple of other tax issues that I just want to touch on while I am speaking on the issue of small business. There is the tax reform delivered in the agricultural white paper, and that is: the immediate write-off of new water infrastructure, uncapped. So irrigators who might be upgrading irrigation equipment, dams, storage et cetera can write that off almost immediately, uncapped.

I want to touch on one last issue before I wrap up, and that is the PaTH job program. This program, I think, will be very well received across my electorate of O'Connor. I do not know how many times I have been told by young people looking for work: 'I can't get a job because I've got no experience. But how do I get experience unless someone gives me a job?' The PaTH program will allow an internship for three months. It will allow an employer—one of those great small business people in my electorate—to take somebody on at no cost to the business. The employee will get a top-up of $100 on their normal job search payment. And, after three months, they can then move into full-time employment, with a subsidy from the government. That will give a lot of young people an opportunity to get that work experience and get into the workforce. Even if it only lasts nine months, they will then be able to go and apply for their next job, having had some work experience.

I want to wrap up by saying that I am proud to support the fantastic small businesses in my electorate. This government is recognising the hard work and enterprise of this vital sector of the economy, and I welcome these tax incentives that will give small businesses in my electorate reward for their hard work. I commend the bill to the House.

See this speech in context