Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Hansard source

This bill, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, contains a number of measures, but today I'm going to focus on schedules 1 and 2 and what these measures mean for small business in Australia.

The Albanese government knows that small businesses are the lifeblood of our economy and our communities, and our budget invests in the security and certainty they need to thrive. There are approximately 86,000 small businesses in South Australia, and they provide important goods and services to the community and to other businesses across all sectors of the economy.

Ninety-seven per cent of businesses in Australia meet the category of 'small business', and small business is a major employer. Businesses defined as 'small' by the ATO—that is, those employing 19 or fewer employees—collectively employ over five million people across the country, and this accounts for about 42 per cent of the workforce. Small business also employs about a third of young Australians and about 40 per cent of apprentices, so it's a really important part of our economy.

A thriving small-business sector means a thriving economy, and that can only benefit all Australians either through their employment or through the goods and services available to them. I've had the pleasure of visiting many small businesses in my electorate both as a customer and, more recently, as their local MP, from food businesses like award-winning Kytons Bakery, an Adelaide institution, and the many fantastic restaurants across Boothby, wineries like Patritti wine, retail shops, wholesalers, manufacturers and health businesses, through to high-tech modern manufacturing, including, recently, Infinitus Aero, which is making electric aeroplanes—I wasn't brave enough to go up yet—electronics manufacturer REDARC, and Micro-X, which makes equipment for stroke ambulances and portable X-rays, some of which have been sent to Ukraine.

Each of these businesses is driven by passion and expertise and the entrepreneurial spirit and each is committed to contributing to their local community. But small business has been doing it tough over the past decade. When I spoke to small businesses during the campaign for the 2022 election they talked to me about the rising costs of doing business. They talked to me about the skills shortage across all sectors of the economy. They talked to me about the increasing red tape that stood in the way of them doing business and growing their businesses. They told me that for all of the rhetoric they heard from the former Liberal-National government—that the Liberal-National government supported small business—that was not what they experienced on the ground. They told me what was actually happening, and that was that the Liberal-National government only supported the big end of town, the big businesses. The small businesses told me that they had felt ignored.

I heard what small businesses told me during the campaign, and I'm here to tell them that this Albanese Labor government heard their concerns and that we understand. This government is making a number of changes to provide an environment where small businesses can grow and thrive. This bill provides some more support for small businesses, and I welcome it.

Schedule 1 to the bill increases the instant asset write-off threshold to $20,000 until 30 June 2024, to improve cash flow and reduce compliance costs for small businesses. The $20,000 instant asset write-off was announced in the 2023-24 budget, and small businesses with an aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2023 until 30 June 2024. Importantly, the $20,000 instant asset write-off will apply on a per-asset basis so that small businesses can write off multiple assets instantly. Assets costing $20,000 or more can continue to be placed in the small-business simplified depreciation pool and be depreciated at 15 per cent in the first income year and 30 per cent in income years thereafter. The $20,000 instant asset write-off will provide cash-flow support and simplification benefits for up to 3.8 million small businesses.

Many of the businesses I talk to tell me they want to grow, and this instant asset write-off will help them with some of the additional equipment required to do this. Others are simply needing to replace equipment that is reaching its end of life or being superseded. Some will use this to make their businesses more efficient, and this will help with the required retooling. While businesses budget for operational costs of doing business, the capital costs and capital replacement costs of expensive assets can be a budget blip that puts financial strain on the business, hence they can be delayed or cancelled. Enabling the instant asset write-off will free up cash flow so that businesses can invest to be more efficient, to grow or simply to meet a changing market. This government is committed to ensuring that small businesses have every opportunity to thrive and grow, and this instant asset write-off is an option that I am sure will be very welcome.

The second schedule is the small-business energy incentive. This helps small to medium businesses electrify and, therefore, save on their energy bills. We know that energy bills have been rising over the past decade—a decade when we should have been transitioning to renewables, the cheapest form of power, instead of remaining reliant on fossil fuels and being exposed to international energy market prices.

In South Australia, we've already provided $650 for energy relief for eligible small businesses and we know that wholesale energy prices have started to come down thanks to the work of Minister Bowen and will in time flow through to retail prices. But many businesses, many entrepreneurs, want to be the masters of their own destiny in this area as well. They want to participate in the transition to cheaper renewable energy and they want to cut their carbon emissions. So schedule 2 in this bill, the small-business energy incentive, will enable businesses to invest in electrifying heating and cooling systems, to invest in more efficient appliances and to participate in the energy transition through installing batteries and heat pumps.

These assets will enable businesses to minimise their power bills through more efficient energy use, both now and into the future. They will also be able to cut their carbon emissions, something that many of them are passionate about and that, increasingly, many of their customers and consumers are interested in. Assets like batteries also have additional benefits in enabling businesses to be blackoutproof. So, when a local blackout occurs—such as what we see time to time from storms, with damage to local power infrastructure—the battery continues to provide power and protect valuable assets such as those that require refrigeration.

To the detail: businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient energy use on 1 July 2023 until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, and the maximum bonus tax deduction will be $20,000. A broad range of depreciating assets as well as upgrades to existing assets will be eligible, and it will help small businesses make investments in electrifying heating and cooling, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

Tradies, manufacturers, restaurants, hairdressers, real estate agents and other small businesses are the backbone of the communities across Australia, and this incentive helps ensure businesses share in the benefits and opportunities of the energy transition that's now finally under way. It will support investments that deliver ongoing power bill savings for businesses while at the same time helping Australia lower emissions. Up to 3.8 million small and medium businesses will be eligible to access the small-business energy incentive and the benefits it provides.

Small business is a vital part of the economy, a vital part of the employment market and a vital part of the community, and it provides so many goods and services that make our way of life here in Australia. We thank them for their part in all of this and for their part in growing the economy. The Albanese Labor government is committed to providing an environment where small businesses can grow and thrive. This bill provides two such measures, which I'm sure will be welcomed by them.

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