Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency and Minister for Industry and Innovation. Minister, how is the government using tax policy to support Australian industry? Are there any challenges to delivering this support and how is the government dealing with those challenges?

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

I thank the member for Makin for his question, because supporting Australian industry is an absolutely fundamental priority for this government. Whilst we have a strong economy, low unemployment, low debt, moderate inflation and massive private sector investment coming into the economy, some industries in particular are feeling the effects of the high value of the Australian dollar. The government is therefore making tax reforms to relieve pressures in areas like manufacturing, which is feeling the effects of the high dollar. That is one of the reasons why the government has moved to cut company taxes across the board. We propose to cut company tax from 30 to 29 per cent.

In relation to small business, many unincorporated small business people will also stand to benefit from tax changes the government is making through the trebling of the tax-free threshold. So there are cuts in company tax, there are increases in the tax-free threshold that will flow tax cuts through to people and, in addition, the government is increasing the instant asset write-off for small business to $6,500. This measure is an extremely important one for small business as it will improve cash flow, improve investment, provide an incentive for capital investment and improve productivity in the small business sector. As well as all of that, the government has announced $1 billion in programs to help manufacturers improve energy efficiency, cut pollution and boost productivity.

All of these measures will help business investment, they will support jobs and they will ensure all sectors of the economy share in the benefits of the resources boom. I am asked about the challenges to these reforms. Incredibly, the coalition are opposing every single measure to support business and to support jobs. They actually oppose a cut in company tax, and the Leader of the Opposition wants to put up company tax for thousands of businesses in this country. They oppose a billion dollars in assistance for the manufacturing sector for clean technology. They oppose a $6,500 instant asset write-off for small business. They oppose $300 million in assistance for the steel industry, which is under pressure. They propose to strip $1½ billion in assistance from the automotive manufacturing sector. This is an incredible performance from the Liberal Party. No wonder people in the business community are asking themselves what on earth is going on with economic policy in the Liberal Party these days.