Kylea Tink (North Sydney, Independent) Share this | Hansard source

I move:

That this House:

(1) notes that:

(a) the politicisation of tax reform is holding this country and economy back; and

(b) this process of politicisation is frequently felt by small to medium sized businesses through their contact and engagement with the Australian Tax Office (ATO); and

(2) calls on the Government to recognise the importance of improving productivity within the small to medium business sector and ensure the ATO is working with businesses towards this outcome.

As someone who both grew up in a family that relied on the income of a small family business and has owned and operated small businesses myself, I know exactly how rewarding and at the same time challenging this environment can be. Now, as the member for North Sydney, I am delighted to speak on behalf of the third-largest business community in the country. It's for this reason that I move this motion today—for, if I cannot speak out against the politicisation of our tax system and the impact this is having on small to medium-size businesses across our community, who will?

At a time when these businesses should be protected and supported by our government systems, they are instead being drowned by red tape and dreading calls from the ATO as the tax office pursues modest debts from small operators, whilst large multinationals continue to report bumper profits with little attention. Twenty twenty-three was a tough year for our usually resilient small-business community, with the Australian Securities and Investments Commission identifying that rising business costs were a key contributing factor to small-business annual insolvencies.

As we entered 2024, CreditorWatch predicted the business failure rate would increase from 4.4 per cent to almost six per cent by the end of the year. At the time, the Council of Small Business Organisations of Australia CEO Luke Achterstraat warned that small businesses would need to prioritise cash flow management as higher costs were undoubtedly set to continue throughout the year, and cost-of-living pressures would make it difficult for small business to pass additional costs on to customers. He also argued it would be critical for banks, business partners and regulators to support small businesses wherever possible. Yet, two months into the year, my office was inundated with calls from accountants and small-business operators who suddenly found themselves under the direct scrutiny of the ATO.

Then, just last week, as we waited to hear what the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, would suggest our government prioritise to support small to medium-sized businesses, many were dismayed to read that the number of administrators being appointed to struggling businesses had grown at an astonishing rate. Not surprisingly, it was businesses in New South Wales and Victoria who were at the greatest risk of being forced under. The report identified that, gallingly, the ATO is playing an active role—a significant role—in driving businesses to the wall as it goes into overdrive collecting debts, particularly from small businesses. While I was not surprised by the finding, I was relieved to see it was finally being identified as an issue.

We know small-business owners are currently paying themselves less and working longer than average to support their enterprises. The modest initiatives the government identified to try and help—like the instant asset write-off and the energy rebate—came far too slowly to make any meaningful difference. Large multinational businesses, including supermarkets and companies in the mining and energy sectors, seem to get away with modest tax payments relative to their profits while small businesses face lightning-fast calls from the ATO for payment of small debts and with threats of insolvency.

Interestingly, the recommendations of the ombudsman on Thursday included, among other things, an ambitious plan for tax concessions. Disappointingly, while he identified the upside of reform, he stopped short of criticising the way in which tax reform in this country is currently pursued. For what it's worth, I agree with the ombudsman that better access to government contracts and savings from cheaper payment systems for the sector will be welcomed, but these things will not fundamentally reset an environment that has become dominated by increasingly complex red tape.

Last week, the Reserve Bank further downgraded its expectations for our economy, reporting it has grown by just 0.9 per cent in 12 months to the end of June. At the same time, a corporate insolvency measure compiled by Insolvency Australia showed many businesses are struggling to deal with the drop-off in economic activity and the increase in overall costs. Businesses in New South Wales accounted for over half of all insolvency appointments in the last 12 months. The reporting identified that small and family businesses are being hit particularly hard.

While the nation's small-business ombudsman warns that without ambitious and targeted reform we could as a nation be 'sleepwalking into a big corporate economy', we are yet to see this government show any intention to push for far-reaching tax reform. Indeed, if the actions of the ATO are anything to go by, it seems the appetite is simply not there.

As someone who fundamentally believes small family businesses are the engine room of our economy, I believe it's time for this nation to have a government that looks beyond the politicisation of tax policy and supports and incentivises small family businesses while ensuring our nation stops relying on income generated off the back of individual workers.

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