Anne Stanley (Werriwa, Australian Labor Party) Share this | Hansard source

I rise to make my contribution to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. The bill contains a comprehensive package of measures to continue the government's substantial support for Australian small businesses. The Albanese government knows that small businesses are the lifeblood of our economy and of many communities across the country, including Werriwa. These measures build upon the significant support provided to small businesses in the last budget to invest in the security and certainty of operation that we know small businesses need to grow. Incentives in this package will help ensure that small businesses—the tradies, restaurants and hairdressers that make up the backbone of all of our communities across the country—share in the economic benefits of the transition to cleaner and more efficient energy.

The amendments are contained in eight separate schedules. Schedule 1 extends the instant asset write-off threshold to $20,000 until 30 June 2024. This was announced by the government in the 2023-24 budget. This will improve cash flow and reduce compliance costs for small businesses. From 1 July 2023 until 30 June 2024, small businesses will be able to immediately deduct eligible assets that cost less than $20,000 if they have had an aggregated turnover of less than $10 million. Small businesses will be able to instantly write off multiple assets, as the $20,000 instant asset write-off will apply on a per asset basis. Assets that cost greater than $20,000 may continue to be placed into the small business simplified depreciation pool. This allows an asset to be depreciated at the rate of 15 per cent in the first income year and 30 per cent for each income year after that. This instant asset write-off measure will provide significant cash flow support and the benefits of simplified compliance to up to 3.8 million small businesses. The measure is estimated to decrease receipts over five years, from 2022-23, by $290 million, which represents a nearly $300 million investment directly into small businesses across the country. This is a significant sum that will appreciably boost the growth of small businesses.

Schedule 2 provides further cost-of-living relief for small businesses by implementing the small business energy incentive the Albanese government announced in its recent budget. It will help small and medium sized enterprises electrify and save on their energy bills. Those 3.8 million small businesses will be eligible to access the small business energy incentive to help support investments that will provide long-term and ongoing electricity bill savings. Additionally, it will help Australia lower emissions by helping small businesses make investments in batteries, electrification of heating and cooling systems, and upgrading to more energy efficient assets such as fridges and induction cooktops. Businesses with an aggregated turnover of less than $50 million will have access to an additional 20 per cent tax deduction for a broad range of eligible assets that support electrification and the more efficient use of energy. The measure will begin on 1 July 2023 and end on 30 June 2024. The measure is estimated to decrease receipts over five years by $310 million and similarly represents a substantial investment in small business and emissions reductions.

Schedule 3 of this bill gives up to 28 community foundations the opportunity to be endorsed as deductible gift recipients by the Commissioner of Taxation. Foundations will be eligible for DGR endorsement if the charity is registered with the Australian Charities and Not-for-profits Commission, has purposes that are consistent with general DGR guidelines, complies with the ministerial guidelines created for the purposes of this measure and is subsequently named in a ministerial declaration. Ministerial guidelines clarifying the purposes for which the foundations may apply for this status and the specifications of the minimum annual expenditure on charitable purposes and grants to other organisations will be released following consultation and will be subject to parliamentary oversight and scrutiny. This will provide organisations and supporters with clarity and certainty in relation to their DGR status. Under schedule 4 of the bill, Justice Reform Initiative Ltd and Transparency International Australia will be specifically listed as having DGR status. The existing DGR status of the Australian Sports Foundation's charitable fund and the Victorian Pride Centre will also be extended. The income tax extension granted to the Global Infrastructure Hub will be extended for an additional year, from 1 July 2023 to 30 June 2024, under schedule 5 of the bill. The GI Hub is funded from contributions made by G20 members. To avoid those contributions being subject to income tax, this exemption is granted.

The government is proposing further amendments to income tax law in schedule 6 of the bill with respect to general insurers to provide alignment with the AASB 17 accounting standards. This measure was also announced in the government's 2023-24 budget. The measure will alleviate the compliance burdens for general insurers from maintaining two different systems of record keeping, one for the purpose of tax and the other for accounting purposes. It will have effect for the income years commencing on or after 1 January 2023. The current non-arms-length expense rules for superannuation entities are replaced by schedule 7 of this bill by introducing new arrangements for general expenses and better target the application of these provisions. The current rules contain the potential for disproportionate outcomes that will be addressed by the measures in the bill while maintaining the broader integrity of the superannuation tax system.

There are additional concerns that when general expenses of a fund are determined to be non-arms-length, all fund income would be taxable at a 45 per cent rate. The measures in this bill will limit the amount of income which can be taxable at the 45 per cent rate due to a non-arms-length expense to a proportionate amount for self-managed superannuation funds and small APRA regulated funds. Large APRA regulated funds will, however, be exempted from the non-arms-length expense rules. This is to account for lower tax integrity concerns with this class of fund and additionally will lower their compliance burden. The rules were first introduced in the 2018-19 income year, and these changes will apply from the same income year.

The government is clarifying that the Australian Financial Complaints Authority, AFCA, has the jurisdiction to consider complaints that 'relate to superannuation'. It was held in MetLife v AFCA [2022] by the full court of the Federal Court that AFCA did not have jurisdiction over complaints relating to superannuation unless the complaint was specifically listed in section 1053 of the Corporations Act as a 'superannuation complaint' rather than simply relating to superannuation. This restrictive interpretation of section 1053 is not one that reflects the original policy intent of the section. The intention was to provide AFCA with the statutory power in relation to the types of superannuation complaints in section 1053, not to severely restrict the range of complaints relating to superannuation that could be heard by AFCA. The bill contains significant financial incentives for the small businesses that the Albanese government understand are the lifeblood of our community. It continues to provide substantial support for tradies, restaurants, hairdressers and all the other small businesses to have a greater share of the economic opportunities in our country. I commend the bill to the House.

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