Terry Young (Longman, Liberal National Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024. Last year, there were a record number of small business closures in this nation—over 13,000. There have been over 27,000 since this government was elected. That's more than at any other time, including the pandemic, which is hard to believe. At this most difficult of times for small businesses, this government's response is to impose more pain on businesses, many of which are on the brink of closure. Schedule 2 of this bill proposes the removal of the tax deductibility of interest paid on late tax debts. I've got news for this government: they're late paying the tax bill because they're struggling and their cash flow is tight. Taking away this tax deductibility is like kicking someone when they're down. The other people it affects are the workers in these small businesses. The extra financial burden by removing this tax deductibility from small business means they'll have to take the money from the only controllable cost you have in business: wages. So much for being the party of the worker.

This proposed measure is seen as such a threat to the small-business community that Chartered Accountants Australia and New Zealand, the Institute of Public Accountants, the National Tax and Accountants Association and the SMSF Association made a joint submission calling for schedule 2 to be removed from the bill entirely. Their submission found:

… it is unlikely that increasing the cost of SIC—

special interest charges—

will impact an entity's ability to correctly self-assess their tax liability and the current cost of GIC—

general interest charges—

means that many taxpayers already have a strong incentive to pay tax on time. Making SIC and GIC non-deductible will inappropriately increase compliance costs of honest taxpayers.

… There are already a wide range of targeted measures that the Australian Taxation Office can undertake to improve the collection of tax debt, and the latest annual report indicates that such measures are beginning to make an impact.

Certified Practising Accountants Australia made a similar submission urging the government to reconsider its proposal. CPA Australia says that denying these deductions will create undue financial hardship for small businesses and individuals, exacerbating existing challenges in the current economic climate.

This is an indiscriminate measure that fails to address situations where taxpayers have historically done the right thing or have, through no fault of their own, accrued these charges due to legitimate tax disputes or administrative delays. In the explanatory memorandum, the government points to the ability of a taxpayer to apply for remission of an interest charge—that is, to ask for it to be waived. But stakeholders report the measure comes at a time of long delays in ATO service delivery and inconsistent outcomes on remission requests. Disputing decisions is already time consuming and costly and will become more costly with the risk of non-deductibility if a remission request is denied. These delays from the ATO will now cost taxpayers even more. This government's decision to introduce this measure despite widespread criticism shows that the business community should have no confidence that this government can consult and no confidence this government listens.

The second hit to small business, and to all Australians, is to those who choose not to purchase an EV because there is no EV option to tow their caravan or load up their tools, no charging stations where they live or not enough range. In schedule 1 of this bill, the luxury car tax threshold will be increased to $91,387 only if the vehicle achieves under 3.5 litres per 100 kilometres. This means LandCruisers, Patrols and the like will not qualify for the new luxury car tax threshold—surprise, surprise. Only EVs will qualify—another example of this government trying to force their ideologies on the Australian people, whether those ideologies suit their lifestyles or not. The coalition will move amendments so that Australians who choose to purchase a vehicle that suits their lifestyle will not be discriminated against for making this choice.

When I talk to everyday Australians in Longman, they tell me that if people choose to buy an EV they respect their right to do that if that's what suits their lifestyle. All they expect is that they be shown the same respect when they make a choice to purchase a vehicle that suits their lifestyle. This latest proposed measure, coupled with the first tranche of the much-hated ute tax that came in on 1 January, is simply hitting hardworking Australians when many of them are doing it tougher than they ever have before.

Schedule 3 again punishes small businesses through cash flow. Currently if there is an error in the amount of tax paid through the BAS system, the refund is issued within 14 days. This bill proposes that that be extended to 30 days. The measure is in response to a recent and new practice of fraud through social media. However, as is a practice of Labor governments, the innocent are punished along with the guilty rather than Labor managing by exception and more severely punishing the offenders with stiffer penalties. If we must go down this path, at a minimum, interest should be paid on moneys owed to the entity after 14 days.

Although schedule 4 of the bill, which reinstates the $20,000 instant asset write-off for small business for the 2024-25 financial year, will be welcomed by the small-business community, small-business owners see it for what it is: pure politics leading up to an election. Instead of legislating this earlier in the term because it was the right thing to do to help small businesses, this Labor government will bring this in with the alleged financial impacts to be felt after the election—again, thinking purely of the politics and not of the actual impact this has on small businesses and their workers.

The coalition will move amendments that increase the threshold to $30,000 and make it permanent to give businesses certainty, which they certainly need more of in uncertain times. It's like this government meets every day to try and find ways to punish small businesses and their workers. In contrast, we see them rubbishing the coalition's recent announcement allowing small businesses to claim up to $20,000 for business related meal and entertainment expenses. Labor keep pooh-poohing this, saying that it's free lunches for bosses—what rubbish! The people that will benefit most from this measure are, in fact, some of the lowest-paid workers. It will mean that cafes and others in the hospitality industry that are currently struggling under this homegrown cost-of-living crisis we are currently in will need to increase hours for employees to meet the extra demand. If they can claim the expense, which will be exempt from the fringe benefit tax, it will be the difference for some small businesses between having a Christmas party and not having one. This will boost morale, leading to increased productivity, benefiting the entire country.

I've never seen a government more antibusiness than this one. A recent study by MYOB reports that one-third of small business owners cannot pay themselves due to cash flow issues and a quarter have resorted to their personal savings just to stay afloat. Only the coalition understands what small businesses need, and, if elected, we will ensure that small businesses and their employees will flourish and prosper. It's time to get Australia back on track.

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