Allegra Spender (Wentworth, Independent) Share this | Hansard source

I, and other crossbenchers, am getting pretty sick of this kind of behaviour from this government. We're repeatedly presented with these omnibus Treasury bills which package controversial reforms in with policies that are undoubtedly positive. This, we can only infer, is to prevent proper discussion of the issues. The Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024 has four provisions, three of which are good and one of which is terrible.

The first part of the bill introduces a luxury car tax, which I and many others have been advocating for a long time and is a complete no-brainer. It updates the definition of a fuel-efficient car to 3.5 litres per 100 kilometres from seven litres per 100 kilometres. It also indexes the luxury car threshold in line with regular vehicles, so this amendment to the current luxury car tax is welcome.

The third part extends the ATO notification period for retaining refunds for further investigation and, again, is sensible. The fourth extends the instant asset write-off for small businesses until June 2025—an election commitment and, again, a no-brainer.

But it is the second part of this bill, the chapter that removes deductions for interest charges on GIC and SIC, that is highly problematic. I see this as an unnecessary change that will remove the ability of businesses to deduct their general interest charge and their shortfall interest charge. By Treasury's own admission, this will overwhelmingly impact small businesses that are already doing it tough. This chapter of the bill has been panned by accountant groups and small businesses alike.

Now, I understand that, on the face of this, this measure seems sensible. It creates an incentive to tax on time, which I support. But the timing of this legislation is extremely poor, given the rapid growth of small business insolvencies in recent years, with cash flow described as the No. 1 cause of these insolvencies according to ASIC. There just isn't the evidence that these systems are being exploited by small businesses as a cheap form of credit. The government knows this is an unpopular move, and that is why it has packaged this legislation in with a handful of other measures that are difficult for this parliament not to pass. The government should be focusing on measures that actually make it easier for small businesses to flourish right now.

Last year, I and other crossbenchers wrote to the government and said that IR complexity and regulatory complexity more broadly are some of the biggest barriers to the growth of small businesses. It's one of the biggest reasons that small businesses are not hiring people and in some cases are shutting down. We wrote to the government and argued that they should increase the threshold of the definition of 'small business' in the Fair Work Act from its arbitrary 15 employees to 25 employees at least. If you're a small business and you have, in particular, mainly part-time or casual workers, 15 employees are not very many. You're not going to have all the HR support to be able to make sure that you can still manage all the complexities of the IR legislation. This is what the government should do. This is something that would make a difference to small businesses right now, and the government should be trying to support small businesses, rather than punish them.

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