Terry Young (Longman, Liberal National Party) Share this | Hansard source

We bang on a lot about small business in this place. People ask why we keep banging on about it. Today I want to speak as a small-business owner rather than as a parliamentarian. I've got a couple of small businesses and I mix with the business community. During the COVID pandemic there were some that did it really tough, there were others that went okay and there were some that boomed. We put in some really great initiatives during the pandemic to help support small businesses around the country: JobKeeper, the JobMaker Hiring Credit scheme, boosting cash flow, the apprenticeship scheme, business investment and the SME Recovery Loan Scheme. There are a lot of them, but I've got to say that I think the greatest measure has been the instant asset write-off.

When I first came into this place I had a chat with Treasurer Josh Frydenberg, and he said, 'As a small-business owner, what do you think we can do to help small businesses?' I said, 'Mate, the first thing we've got to do is get rid of this stupid depreciation.' The problem is that when you buy something you don't get the tax advantage for four to 10 years. It stymies cash flow, and small business needs cash flow to reinvest in more staff and to buy more equipment, which will create more jobs further down the track.

A lot of people I talk to in the pub, if they haven't had business experience, don't understand why this is so important. I'll explain it in layman's terms. If a business makes $200,000 on paper, as a business owner you pay tax on that $200,000 that year even though you might not physically take that money. You don't take the money; you leave it and reinvest it in your business. You'll go out and buy a piece of equipment that's $100,000, but you still pay tax on $200,000. That's the issue. What happens is that you depreciate that over four years, so you can claim $25,000 a year over four years instead of the whole $100,000. This is a detriment. It stops the small-business community from reinvesting. If there's anything good that came out of the pandemic, it's the fact this thing has been brought forward. I didn't bring on the pandemic on purpose—I want to put that on the record!—but if there's anything good that's come out of it, this is it, and I really hope the instant asset write-off will continue. It will encourage businesses, and we will see a tremendous investment in staff and equipment. I think that's a good thing for the economy.

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