Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I'm pleased to rise in support of the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. This is a bill that contains a wide number of measures, but, at its heart, it is a bill that is there to support small business and to support charities. I won't go through every single measure in this bill, but I will work through a number of the key measures and identify how it helps to support the government's broader agenda when it comes to both small business and charities. The major items in this bill relate to easing the tax pressure for small businesses, helping them with cash flow and helping small businesses to electrify and, in that way, to be part of the broader transition of the economy and our society to a cleaner future.

Schedule 1 of the bill amends the Income Tax (Transitional Provisions) Act 1997 to increase the instant asset write-off threshold to $20,000, until 30 June 2024, to improve cash flow and reduce compliance costs for small business. Under the measure contained in schedule 1, small businesses with an aggregated 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. The $20,000 threshold will apply on a per asset basis so that small businesses can instantly write off multiple assets. This is a significant measure for businesses looking to invest in their capital or their infrastructure. Assets costing more than $20,000 can be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Schedule 2 of the bill amends the Income Tax (Transitional Provisions) Act 1997 to introduce the small business energy incentive to help small and medium businesses electrify and to save on their energy bills. Up to 3.8 million businesses with an 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 the more efficient use of energy. This is something that will be good for businesses in that it will reduce their energy bills or their reliance on energy, but of course it will also be very important for the transition of our economy as a whole. The new tax incentives will apply from 1 July this year until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

Small business is the engine room of our economy. It's both the engine room of the economy and, in a sense, the canary in the coalmine. It's the engine room of the economy not only because it employs so many people—5.2 million people—but also because it gives so many people their first go in the labour force. It gives so many people their opportunity to gain experience and to step on the first rung of the employment ladder. Small business is also so important because it gives so many people in our community a chance to be entrepreneurial and a chance to follow their dreams. It's absolutely critical as a driver of employment in our economy. There are hundreds of thousands of small businesses right across all sectors of our economy, and they drive innovation, entrepreneurialism and technology diffusion right across the economy.

So small business, as I mentioned, is the engine room. But small business is also vulnerable in many ways. It's the canary in the coalmine because small business, more than large business, is often subject to short-term cash flow constraints. Moreover small business in many contexts can be subject to risk. Whether it be a natural disaster risk, a business related risk, a business cycle risk or whatever it might be, small businesses often find it more difficult to diversify those risks. Small businesses can be much more exposed to those risks than larger businesses. So, on the one hand, small businesses are incredibly important to our economy. They employ, I think, almost half of the total labour force, and, as I said, they give so many people their first chance and give so many people the chance for independence and entrepreneurialism. However, on the other hand, small business has its vulnerabilities.

That's why these two measures are so important. These two measures go to the cash flow issues and some of the risks that I talked about and provide material assistance. Schedule 1, the instant asset write-off extension, is particularly important as a way of helping small business to manage some of those cash flow risks that larger businesses are often more able to absorb. In my electorate of Fraser, small businesses are thriving and critically important right across the electorate. There's the Migrant Cafe in West Footscray and Big Sams Market in St Albans and Footscray Market. Within each of those markets, they have a whole range of individual food and other suppliers. They're such vibrant, dynamic parts of the economy. There's Bell Industries, an incredibly innovative and dynamic manufacturing firm, and many other manufacturing firms right throughout the electorate. There are also, of course, the many thriving, multicultural shopping strips full of small businesses, cafes and restaurants. They are incredibly important, and that's why for me this is such an important bill.

These measures were announced in the May budget, so it's wonderful to see that these are now coming into force. The small-business energy incentive will be extremely important in helping small businesses to invest in the transition of the economy to a clean energy future. For me, this is a particularly important initiative. This is one of those win-win situations where the measure will not only benefit the business by reducing their bills in the future and by reducing their exposure to energy price risk but also benefit millions of organisations employing millions of people. It is absolutely central to the overarching transition task that our economy faces. Many of the peak industry bodies have been calling for exactly this kind of assistance. For example, in Victoria, VCCI, in their report Achieving a net-zero economy, has called for this kind of assistance for small business to be able to invest.

I want to go back to that cash flow issue that I talked about earlier. Often, investments for longer term savings, including moving towards greater electrification and better managing energy usage, require significant upfront expenditure, and it's for exactly that reason that this measure is in place—to help small businesses deal with the challenges of managing cash flows over the medium and long term so as to be able to take advantage of those benefits.

There are a whole range of other measures that the government has put in place. I want to identify them because I think it's important to put this Treasury laws amendment bill in the context of what else we're doing to help small business. Of course, there's targeted energy bill relief already for around one million small businesses, with $650 coming directly off their energy bills, in partnership with the states and territories. We've already got a range of measures in place to help them deal with some of the cost-of-living challenges. There are already initiatives in place, but this will be an additional measure, which will help small businesses to invest for their longer term energy security and efficiency.

There's $15 million for free mental health and financial counselling support so that small-business owners and directors, who have done it so tough over recent years, get support where they need it. Then there's a range of procurement mechanisms, which I think are particularly important. These procurement reforms will ensure that small businesses can access more of the tens of billions of dollars of procurement that the government undertakes. There was a significant increase in the target for small-business procurement, which will flow through to small businesses and, again, help them with a lot of their cash flow. The government is also committed to a range of measures to ensure small businesses are paid on time, which is a critically important issue for small business. Given those cash flow issues that I mentioned, being paid on time can be so critically important in so many areas.

As I mentioned earlier, this bill also contains a number of measures to support charities. It provides a path for 28 community foundations to be endorsed as deductible gift recipients. In particular, the Justice Reform Initiative Ltd and Transparency International Australia are listed as new DGRs under this bill, and the existing listings of the Australian Sports Foundation Charitable Fund and the Victorian Pride Centre are extended. There are many worthwhile organisations that are identified. I wanted to pick out the Justice Reform Initiative and Transparency International to dovetail that with the government's broader initiatives around greater transparency and probity in government. I think it's really important that this bill gives them DGR status.

To conclude, I'd say this is a TLAB that provides for a number of important measures. Small business lies at the heart of our economy. It employs 5.2 million people—almost half the workforce—and it provides so much more than that. It provides people with opportunity—to work, to be entrepreneurs, to be business owners and to live dreams. But small businesses can also be vulnerable on occasion. Measures like this are vitally important to give small businesses the supportive environment they need to be able to thrive. I very much support this bill and look forward to seeing its passage through this House.

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