Phillip Thompson (Herbert, Liberal National Party) Share this | Hansard source

I move:

That this House commends the Government on the delivery of the 2021-22 budget, and in particular the measures to incentivise business investment, including:

(1) extending temporary full expensing;

(2) extending loss carry-back measures; and

(3) establishing a 'patent box' for the biotechnology and medical technology sectors.

Small and medium businesses are the engine room of our economy. That's why the Treasurer's recent budget focuses so heavily on ensuring our small- and medium-business owners get the relief they need to keep our economy moving forward. There are more than 10,600 small and medium businesses in the electorate of Herbert, and that's why I wanted to move this motion this morning—to highlight how this budget will potentially help not only each and every one of them, but others around the country as well. We've made a massive investment in small and medium businesses through a range of tax relief measures, but in particular by extending temporary full expensing—what we used to call the instant asset write off—extending loss carryback measures and establishing a patent box for the biotechnology and medical technology sectors.

We know that these measures work. Since the October 2020 budget, investment in new machinery and equipment has increased at its fastest rate since March 2003, increasing by 8.5 per cent in the December quarter and 10.3 per cent in the March quarter to be 7.2 per cent higher over the year. Extending temporary full expensing and temporary loss carryback for an additional year is estimated to deliver an additional $20.7 billion in tax relief to businesses over the forward estimates period and support an estimated $320 billion worth of investment. Temporary full expensing has been a policy of ours for a number of years that has been really ramped up during the response to COVID-19. It allows businesses to deduct the full cost of equipment in the first year, instead of over a number of years. Come tax time, this results in more of their profits back in their business and more money pumping through our local economy.

This is so important. Just think about the flow-on effect. If a local business in my electorate of Herbert buys a new piece of equipment, its productivity will hopefully increase and it will be able to put on more people and create more jobs for locals in Townsville. But it doesn't stop there. Think about the supply lines, the small business where they purchase the equipment and the sale that that small business may not have otherwise had. It means they can support more jobs and grow and expand themselves. We're already seeing this at work in Townsville. Business confidence is now at its highest level in 14 years with hundreds of jobs vacant. And into the mix come other initiatives like HomeBuilder, where the construction industry is going gangbusters keeping up with building new homes, not to mention the extra places for the First Home Loan Deposit Scheme we announced over the weekend. The loss carryback measures are also a huge win for local businesses. Eligible businesses can carry back losses to earlier years, resulting in a refundable tax offset and potentially more cash in the bank to pump back into their business. So I would encourage all local owners of small and medium businesses to talk to their accountants about how they may be able to make the most of this opportunity.

Finally, in this time of global pandemic we should be doing everything we can to be supporting and encouraging local medical and biotech businesses to innovate. Through this budget we're doing that by introducing a patent box. The patent box will reduce taxes on income from innovative research to encourage businesses to undertake their research and development in Australia and keep patents here.

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