Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Deputy Speaker, I rise today to support these bills, the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and the Tax Laws Amendment (Small Business Measures No. 2) Bill 2015. These bills legislate a number of measures announced as part of the government's Jobs and Small Business package in the 2015-16 budget.

Before I go into the detail of these bills, and the impact of this government's savage cuts and sustained attacks on Canberra and what the bills actually mean for small business, I just want to give a word of advice to the member for Mallee. The fact that he had no knowledge of the instant asset write-off and the loss carry-back schemes that Labor introduced when we were in government to help small businesses—particularly to steer through the GFC—is absolutely breathtaking. That he is ignorant of the fact that these schemes existed—the fact that he did not know about them—does not mean that they did not exist. They existed for a number of years. They were set up to help small businesses steer a course through the global financial crisis. It is almost like the member for Mallee sort of sticks his fingers in his ears, closes his eyes, and hums loudly—'I did not know about it, therefore it does not exist'. I do not know whether he still has his business anymore, what was it—I think a truck business, a shearing business, or was it all of the above? I am not really quite sure from the five-minute contribution he made as the last speaker—but all I can suggest is that he gets a new accountant. The fact that his accountant did not actually notify him of it is something that I would be very concerned about if I was running a small business, which I did before I came into this life. Deputy Speaker, I also remind the member for Mallee that small businesses also have responsibility. Small business owners have a responsibility to keep up to date with what is happening in the world, and to keep up to date with the schemes which are being introduced to help them out and to improve their businesses. And so, I suggest, if he goes back into that life—the trucking life or the shearing life; whatever business he had beforehand—that he listens to the news every now and then, and also that he finds a new accountant.

The first bill amends the Income Tax Rates Act 1986 to reduce the company tax rate from 30 per cent to 28.5 per cent for companies that are Small Business Entities with an aggregated turnover of less than $2 million. For all other companies over the threshold, the company tax rate will remain at 30 per cent The second bill deals with the $20,000 accelerated depreciation for small business, and it also allows for accelerated depreciation for primary producers, which is a welcome addition. This increased threshold is available to all small businesses, including those who previously opted out of the simplified depreciation rules. The second bill also amends the Income Tax Assessment Act 1997 to allow primary producers to claim an immediate deduction for capital expenditure on water facilities and fencing assets, and to deduct capital expenditure on fodder storage assets over three years. Labor welcomes these measures, which are of course great news for small business.

In fact, I welcome the opportunity to speak on this legislation, because as a former small business owner I am always very keen to speak on small business, as you know, Deputy Speaker—and I think that you had your own small business before coming into this life. I am always keen to get out there and shout out to the Canberra community about the fantastic businesses that we have in this town—businesses that have been doing it very hard since this government was elected; businesses that have seen either their growth just plateau or their turnover fall by between 20 and 30 per cent. But I will come to that later. I always welcome the opportunity to talk about small businesses and the great work that they do, the great contribution they make to our economy, and the great contribution they make in creating millions of jobs each year. That said, I probably would have been more grateful if the government had accepted the opportunity to vote on this bill and to pass this bill this morning. While it is wonderful to have the opportunity to speak about small business, what is best for small business is for this legislation to actually be passed. So while I welcome this opportunity, I would have welcomed even more the bill being passed through the House this morning.

We on this side welcome these measures because we understand that small businesses are the engine room of the Australian economy. I am acutely aware of the key role that small and medium-sized businesses play in the Australian economy, and the support and recognition needed from government and from parliament. At a time when unemployment is increasing, it is critical that this House acknowledges the important role that small to medium-sized businesses can play in turning this trend around. As I have said, before this life I had my own small business, I had it for 10 years and I absolutely loved it. I understand the challenges that small business owners are facing. Since entering parliament, I have spent a great deal of my time talking to small-business operators in my electorate of Canberra, and advocating for their needs and interests. I go out regularly on what I call business walkarounds. I go and speak to businesses in Woden, in Fyshwick and in Hume, and in Phillip, in Manuka and in Tuggeranong—in every part of my electorate. The most frequently occurring concerns that I hear from these small business owners are around what this government is doing to this town—what this government, since it was elected, is doing to Canberra, and what this government is doing to our public servants; our servants of democracy.

This government has again launched a savage and sustained attack on Canberra and on the public service. The damage that this has done to Canberra's economy is acute. Business confidence is down: it has been down since this government was elected; in fact, it started to fall in advance of the election. Those opposite say they stand for small business, but how does taking the axe to more than 8½ thousand public service jobs in Canberra help small businesses? Many Canberra businesses are struggling, and that is a direct result of the Abbott government's first budget.

'Since the 2013 election almost every facet of the ACT's economy has spiralled. Building approvals in the ACT are down by 41 per cent in the year to March 2015, whereas nationally the number of residential building approvals increased. While we are down by 41 per cent, nationally it has increased by 23.6 per cent. Our GDP increased by 0.7 per cent in real terms in 2013-14, compared to 2.5 per cent for the rest of the country. In the retail sector, through the year to March 2015 ACT retail trade turnover increased by 4.1 per cent, whereas nationally it went up by 4.5 per cent. More concerning, in January a survey of 1,000 businesses found that the territory had the lowest business confidence in Australia, with 31 per cent of businesses expressing grave concerns. According to the Canberra Business Council chief executive at the time, Chris Faulks, who has just been replaced by the fabulous Robyn Hendry, formerly of the Canberra Convention Bureau:

The big issue for the Canberra economy is the ongoing fragility of business and consumer confidence, which impacts on consumer spending and business investment. While rising unemployment levels will be a concern over the next three to four years …

As you can see, the Abbott government's track record on small business in this town is absolutely appalling. You cannot be proud of what you have done to this town since you have been in government. You cannot be proud of what you have done to this city—the nation's great national capital. This is the national capital, too, that Sir Robert Menzies strongly believed in. He had a great vision for this city. This government has decimated it. And it is true to form. We saw it in 1996 under the last coalition government. We saw it then when business bankruptcies and non-business bankruptcies went up. Businesses closed down, people left town and house prices plummeted. We had 15,000 Public Service jobs cut here in Canberra, 30,000 nationally. It sent us into an economic slump for five years. It took a long time for us to recover from what you did to this economy last time. And you are doing it again now.

You have a complete contempt for the Public Service, a complete contempt for Canberra and a complete contempt for your own workforce. These are the servants of democracy. These are people who serve you, provide advice to you, write your submissions, write your question time briefs and your policy. These are people sitting over there, who serve you with loyalty, integrity and professionalism. And how do you repay them? You get rid of 8½ thousand of them just in the first year of being in office. And who knows what is going to happen. You have eight functional reviews actually taking place or planned in this budget. Who knows what is going to happen in terms of jobs. To me, 'functional review' is code for job cuts. That is what a 'functional review' means. It is code for job cuts. You are already doing functional reviews in health; you are already doing functional reviews in education. What is going to happen with those jobs? You have already decimated those departments, so who knows what is going to happen with these latest functional reviews. This government has taken the axe to Canberra. And, as I said, true to form, in 1996, when the coalition was last in office it decimated Canberra. We went into an economic slump for five years. You need to talk to businesses.

The Prime Minister was out this week and, from memory, I think he was out last week, in Fyshwick. The Prime Minister was with the member for Eden-Monaro in Fyshwick. I do remind the Prime Minister that Fyshwick is not in the electorate of Eden-Monaro. Fyshwick is actually in my electorate. He was out there talking about these fantastic new small business initiatives which, as I and my colleagues have said, we support. He was out there talking to franchisees. He was at, I think, a coffee shop last week talking to business people. Apart from actually advocating these small business measures which, as I said, Labor supports, I wonder if he actually discussed what the business environment was like for these businesses here in Canberra and what taking the axe to 8½ thousand public servants had done to business. I wonder what their growth figures have been like over the last 18 months since this government was elected. In my business walk-arounds, in my conversations with business people in the many forums I run for the community and where business is also involved, I know from those conversations that, as I said, growth has either plateaued or fallen by about 20 to 30 per cent since this government was elected. Business confidence has absolutely fallen. It has fallen through the floor since this government has been in power.

I wonder whether, again, they closed their eyes, put fingers in their ears and hummed loudly when the reality of doing business in Canberra was actually discussed with the Prime Minister and, curiously, the member for Eden-Monaro, even though the suburb of Fyshwick is actually not in the electorate of Eden-Monaro but in my electorate. I wonder what they actually said. Did they actually ask: 'How's business going? Have you had growth recently? How's it been going since we've been in government? How's it been going since we axed 8½ thousand Public Service jobs? How's it been going since our GDP has had this minimal growth rate? How's it actually going for you? Are people coming and buying coffees? Are people coming and buying furniture?' I would say that the answer is probably, 'No. Prime Minister, we are doing it tough. Canberra businesses are doing it tough.' If he was actually listening to these businesses, businesses that are run by Canberrans, that employ Canberrans, that are proud Canberrans, he would have heard that things have been really rugged for these businesses since this government was elected. He should be ashamed of it. He should be ashamed of the fact that he has a complete contempt for this city, this nation's capital and the Public Service. He has a complete contempt for our servants of democracy.

As I said, these are people who serve you so loyally, so professionally and with such integrity. All they get are not only job cuts but also attacks on their pay and conditions—attacks on their below-inflation pay offers. Basically, the message has been sent from public servants that they are not happy about it and it is going to be very interesting to see whether any enterprise agreements get through this first term of the government. But there are attacks not just on the pay but also on the conditions. These are proud public servants and proud servants of democracy. The Prime Minister's workforce, the ministers' workforce, this government's workforce have also been accused of being double dippers, of being rorters and fraudsters, as a result of the government's revised view—although it is very difficult to keep up with what the view is at the moment—on paid parental leave. We have had so many positions on paid parental leave—like we have had so many positions on the GP tax—who knows what the current position is? All I know is that the current position is attacking the workforce that serves the Prime Minister, the ministers and this government. It is attacking them, it is accusing them of double-dipping and it is accusing them of being fraudsters. It is an absolute outrage. The government should be ashamed of what it has done to small business in Canberra. (Time expired)

Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in strong support of the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015. It is great to see that the opposition is strongly supporting this budget measure. Sadly, the Labor Party has never been a friend of small business. We on this side know that small businesses are the engine room of the economy. It is great to see all the young ladies up in the gallery—they are waving to me—and I am sure that a lot of them will one day own a small business. It is a national economic, cultural and community reality that 96 per cent of all Australian businesses are small businesses. Combined, they contribute over $330 billion to our national economy, an incredible amount of money. They employ an amazing 4.5 million Australians. Everywhere you go in my electorate of Latrobe—whether it be driving through the suburbs of Emerald, Cockatoo, Gembrook, Boronia, Fern Tree Gully, Upper Gully or Berwick—there are a small businesses. All the shops there are small business people. There are a small business people in the houses too. In fact, one in three Australians active in our economy is employed in small business and more than four of every 10 private sector jobs rely upon hardworking small business people.

These enterprising men and women—and it is great to see so many women taking up small business these days—represent what it is like to be Australian. They are truly out there having a go. They are taking a risk and giving their best efforts to succeed in life not only for themselves but for their children. They display an extraordinary work ethic and a deep commitment to our country. They are prepared to mortgage their house. They are prepared to take a risk. That is what Australians are all about. Small business people are an amazing lot, because they are prepared to put their homes on the line to create jobs for their family. And they do without; they would rather put money into the business to see it grow. They apply all they have when it comes to finance and support to drive their venture and provide opportunities for themselves and the people they employ. They put dinner on the table for Australian families each night. They serve them, they feed them and they clothe them.

I congratulate the Treasurer, Joe Hockey, and also the Minister for Small Business, Bruce Billson. He has been an incredible ambassador for small business. We had him out in my electorate for a breakfast function. He makes small business very exciting. The company tax rate will decrease from 30 per cent to 28.5 per cent for small businesses with an annual turnover of under $2 million. That is fantastic news. Small companies will pay less tax for every financial year commencing on or after 1 July 2015. I recently had a small business event in my electorate. I was guest speaker with St Margaret's School. The principal, Doug Bailey, and the school community are doing a great job. Ron Wienzerl was another guest speaker there. These changes went down really well. They were excited about this government's changes to small business—in particular, the $5 billion injection to get small business right back on track and leading the economy.

This package will provide accelerated depreciation arrangements to small businesses and primary producers. This change is the centrepiece of the budget's small business package. Incorporated small businesses make an important contribution to the Australian economy. They, along with the unincorporated small businesses, account for the vast majority of active private businesses in the country and represent a large share of its employment. The Australian economy is facing significant structural adjustments. Small businesses are typically more vulnerable than larger businesses to shocks and changes in economic conditions. This makes it particularly important that, during this period of economic transition, the policy settings support small business growth and innovation. That is precisely what this budget does. This bill will amend the small business simplified depreciation rules in the tax law to increase the threshold for immediate deductibility from $1,000 to $20,000. This is a significant increase in the threshold and a massive gain to cash flow for small businesses. It is estimated that up to 780,000 companies could potentially benefit from this measure.

Looking specifically at my electorate of La Trobe, there are many local examples that demonstrate the benefits of this bill on the whole. I have spoken with many local business owners who welcome the support and recognition that the federal government will give in this bill. I know that Karen Rook, from Piccaninny Recycled, will be glad to have the $20,000 tax write-off available to her so that she can re-fit her store if she chooses to do so. I know that Michael Muaremov, from Michael Muaremov & Associates, will be pleased to have the 1.5 per cent tax cut. It will allow him more room for investment and further employment of even more local staff, as he already has been doing for the last 15 years, and I am sure he will be advising all his clients of the changes. I know that Ron Wienzerl from APT Engineering will be happy to see growth in our local small business development, thus providing a boost for the whole locality. I know that Christina and Anthony from Mountain Harvest Foods will be happy to immediately deduct all eligible capital expenditure on fencing and water facilities in their farming area. I know that Graeme Bulte of Aquaterro will be happy to hear of increased employment in our area as a result of tax reductions, thus improving productivity in our whole region.

In conclusion, because I want to allow more speakers to speak on this bill, this is fantastic in order to get the Australian economy moving again. Small businesses are the people who cut our hair and our keys, sell our meat and our clothing, make our coffee and our furniture, do our taxes and our laundry, fix our cars and our roofs, and grow our flowers and even our potatoes. There is virtually no industry that small business does not operate in. Small business is the backbone of the Australian economy. It is the backbone of our nation. And the coalition recognises this with the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015. This bill helps our nation prosper and grow, and I proudly support this bill in the House.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I rise, as have previous speakers, to speak on the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and the Tax Laws Amendment (Small Business Measures No. 2) Bill 2015. And, like my colleagues, I stand to say that I support both of these bills, as Labor supports these bills. Of course we support the 1.5 per cent company tax cut for small business and the $20,000 accelerated depreciation for small business and primary producers, and we have been absolutely clear about this. As the Leader of the Opposition, Bill Shorten, said this morning, we were not going to delay for a minute on this bill. And Bill Shorten made clear in his budget reply speech that we support this bill. But what a farce we have had in the past week: member after member on the opposite side calling for us to get out of the way and get this done immediately. Then this morning when we tried to immediately pass this bill, at the first opportunity the government blocked Labor and voted against its urgent consideration.

I came down for the division after listening to approps last night and this morning in the Federation Chamber. Member after member from the benches opposite was exhorting Labor. They all had a piece in their approps speech exhorting Labor to get out of the way, to let this go through immediately, without delay—member after member after member. And what did I come down for a division for? I was shocked to find that we were dividing on our move to get this bill out of the way, right away, at the first opportunity. And I was shocked because I had heard Tony Abbott, the Prime Minister, in question time saying, 'I say to the Leader of the Opposition, let us not let politics get in the way of economics, let us not let self-interest get in the way of national interest'—puffing himself up, getting to his last line—'Let us pass this bill straightaway.' He was leaning across the dispatch box, looking into the eyes of the Leader of the Opposition as though there was a problem on our side of the House with this bill. Then the member for small business—I mean the Minister for Small Business; I always get it confused, whether he is a member for small business or the Minister for Small Business—

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

The small minister for business!

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

Yes, thank you very much, member for Chifley. He gets up at the dispatch box and says that the only thing that stands in its way is Labor: 'We need no more of this shiftiness, no more game playing, no more of Labor's blah, blah, blah. Do you know what the small businesses of Australia are saying, Bill? Pass the budget measures.' That was the Minister for Small Business, across that dispatch box. 'No more game playing', he said. Then this morning we had the government playing politics with people's lives, missing an opportunity to use government to change people's lives for the better, playing politics with people's lives. Then in a moment of chagrin we had Minister Pyne tweeting:

Labor are a joke. Ending the debate on small business won't get the bills to the Senate any faster - the Senate isn't in session!

I was stunned when I saw the tweet, absolutely stunned, because what had he done? He had exposed his own tactics. He had exposed the fact that for day upon day we have listened to this. And here he was, the manager of government business, saying that we were playing politics, that we cannot move it to the Senate yet, so what is the big rush in here, what was the pressure in question time, why were those opposite not missing one opportunity to suggest to the Australian public that members on this side, that the opposition, somehow had a problem with this bill, somehow did not support small business? It is outrageous, absolutely outrageous.

Of course we support these measures, because they reinstate sensible Labor measures. Of course we support them. Interestingly, though, there was a bit of to and fro today about why the government blocked it. Perhaps it is because once upon a time they did not believe in these measures; in fact, they opposed two of these measures and completely scrapped the third when they came into government. So, it is a very confusing day for the Australian public. They are not quite sure what that government stands for. Then again, the electorate is getting used to that. Most days they do not know what this government stands for, because you cannot trust this government to do what they say they are going to do.

There is a lot of scurry around why small businesses are not out there borrowing money. The government would like to blame Labor and suggest that somehow they thought Labor was going to block this measure in the Senate. We made it clear that that is not what we were going to do. It was made perfectly clear. I would suggest that the reason small business was worried is that they have learnt that they cannot trust this government. They have learnt that this government will say one thing and do another. They heard the Treasurer say in his budget speech that the government was going to do this. They may have even seen it in the budget papers. But trust is low out there. Trust is low in my community; it is incredibly low in my community. But my community knows where I stand on small business. It knows that I know the value of small business, and it knows that Labor knows the value of small business, because we spend time on the ground in our communities every day with people who run small businesses, with people who own small businesses and with people who work for small businesses. Despite the brouhaha and protestations from those opposite, Labor members know and appreciate small businesses in their communities and electorates, because we live and work every day with those people. We stand beside them at the football club. We cheer our kids on, with them, at junior sport. We share meals with them around our kitchen tables and at community events—because they are our families and our friends.

In Lalor there are 11,000 small businesses. I would suggest small business is the largest employer in the electorate of Lalor, and many of these are owner-workers running a business that allows them to draw a salary. In fact, nearly 7,000 of the small businesses in Lalor have no employees. In this debate about small business we should note that many who would once have worked for a company are now companies themselves operating with an ABN. Many of them are modest earners, tradespeople working on small margins in the affordable-housing industry. They are retail owners, food businesses, and those working in hairdressing and personal training. They are operating on small margins. Many of those in my electorate are drawing very small salaries and are recipients of the family tax benefit. So they stand to win on the small-business measures but will have it taken by the other hand, by this government, off their kitchen tables.

When I stop for a chat with small businesses they are concerned about lots of things. They are concerned about staying afloat while they wait for overdue payments, the cycle that is late payments creating late payments down the line. What causes this late-payment cycle that chokes the cash flow, that threatens the viability and profitability of the small businesses in Lalor? Uncertainty and low consumer and business confidence. That is what causes those cash-flow problems, both of which have been festering under this government and its priorities, that have been spelt out so clearly in their first and second budgets. Both these budgets have packed inside them detrimental impacts on our local economy.

The debt-and-deficit emergency damaged confidence, and the cruel measures, the cuts, outlined to family budgets—in a community already under pressure from low-employment levels and job insecurity—means limited disposable income. That impacts on our local businesses. People are not buying new furniture. People are thinking twice about getting that landscaper in to do their garden. There are thinking twice about starting that renovation, getting their nails and hair done or taking the family out for meals and movies.

I welcome these measures because they may give a gift to our local economy. I welcome these measures because they might help everyone in Lalor. Everyone who sits on this side of the chamber sees the value of that. However, moving through the electorate over the weekend I found there were other views, some of which those opposite might be interested in hearing. Some small-business owners who have low turnover and uncertain work also have young families. There are very concerned about the cuts to the FTB. They have also seen the schoolkids bonus cuts and the changes to pharmaceutical benefits.

In 2014, at one point, it was calculated that the changes to the GP tax threatened $11 million out of our local economy. That is still on the table—coming through the back door—so they are worried about that. Small-business people understand the economy and they know that cuts to the tune of $84 a week for a family earning $60,000 with two children are going to hurt their small businesses. Others are not sure about borrowing money to purchase, because they are worried about what will happen in two years. They are worried this could be a short-term sugar hit and this government will leave them stranded. They are worried about the risk—that trust factor—coming in again. Some of the local businesses I spoke to last weekend knew that these were Labor initiatives, because they had looked forward to those Labor initiatives. In fact, one I spoke with had to redo his tax return after clumsy handling by the government, last year, when it did not believe in these measures. But today it does. Some of them know exactly who they are dealing with, in terms of this government. The local economy is of very big concern for local businesses in Lalor.

I and others on this side of the chamber really hope that these measures go some way to building confidence in the local economies across this nation, because that will help families and working Australians. Others understand a bit more about this government. They are worried that they have limited investment in road and rail infrastructure. They know that business would be better with fewer clogged roads. Lots of people in the electorate of Lalor are employed or own businesses that work in transport and logistics. They understand what clogged highways mean. They understand that if public transport were better and workers were on trains to go to the city—and not on the roads next to them—they might be able to run their small businesses more efficiently. These are important points. Those in Lalor understand that this government is giving eight per cent of the infrastructure budget, over the next four years, to Victoria. It has 25 per cent of the population and eight per cent of the infrastructure spend. They are very right to feel dudded.

Small business also wants employees who are ready to work. In my area they are puzzled that the apprenticeship support programs valued by small businesses—that supported our young apprentices, locally, to get through their apprenticeships with mentoring and support or by buying tools and other equipment—have been cut

They are puzzled that the trade training centres program has been cut. My community needs a real commitment to education, skills and jobs. These measures will not deliver sustained improvement in these areas. This government needs to get to work—it needs to get to work around jobs, around skills and training, around supporting apprentices so they complete their apprenticeships without taking on a debt burden. People in my electorate are very interested in Labor's plans for education and skills.

In conclusion, I would reiterate that the economy in my area has been suffering under this government. Businesses in my area understand that Labor reacted with stimulus when the GFC hit, that a deficit was created to save business, to save this nation's economy. This time they are asking: 'Are we going into more deficit?' Has this government doubled the deficit to save the Prime Minister's job?

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

The question before the chair is that this bill be now read a second time, and I take the opportunity to remind all members that, under standing order 74, it is not normal practice to adversely reflect on votes or proceedings of the House. I give the call to the member for Canning.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

It is my pleasure to speak on the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and cognate bill, emanating from the most recent budget. I want to say at the outset that this budget delivered a very good outcome for small business. We have heard so many people talk about the role of small business in the Australian economy. We know that it accounts for 96 per cent of the business economy. Everyone talks about being attached to large business et cetera, but when I say '96 per cent' I do not mean 96 per cent of the volume; I mean 96 members of the business community. We will have the Minerals Council dinner here tonight—there will be BHP, there will be Peabody, there will be a whole range of large businesses and multinationals here. And of course the large companies—the Rios et cetera—employ a lot of people, but none of them employs as many people as the small businesses in Australia today.

We have heard testimony after testimony from people here who have been involved in small business. This was a business package that brought a $5.5 billion outcome for small business. It was loosely described by some as 'a tradies budget'. In my electorate of Canning, for example, I have 10,000 small businesses. Some of those are businesses of one—as we heard one opposition speaker say, they operate from home. Some of them do not even have an ABN number; some of them just work for a personal contract. Some of them are cleaners—what is the matter with an honest day's work as a cleaner? But you have to be given some relief in the taxation system, as we have done by reducing the tax rate from 30 per cent to 28½ per cent and, of course, there was a tax offset of 20 per cent for those who were willing to invest in new equipment. That was an absolute boon and I will refer to that later on.

We on this side of the House know something about small business. My wife and I dared to venture into a small business by owning a bakery. It started off as an absolutely marvellous thing to do. It was delivering a very good result until the shopping centre decided to destroy most of the businesses in the shopping centre by developing it and then bringing in competitors. We were a sole baker and, by the time we had finished, there were four bakeries in that shopping centre. They were more interested in selling space than they were in maintaining their tenants. That is the sort of thing that small business people go through all the time. I do not want to be too partisan, because I see the member for Chifley nodding, so I will try and be as generous as possible. But if you go through the list of people on our side of the House, you will see we come from very diverse backgrounds. The member for Canberra says that she is a small business woman of 10 years experience and I take that as a statement of fact. I have heard her speak here before. I actually listened to her maiden speech and she is somebody who does know something about small business. But there are not many on that side who have had to use their own hard-earned cash—

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I have been in business for over 20 years!

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

I am pleased to hear that, Member for Blair, and I acknowledge you. You probably would not acknowledge this but there are not a lot on your side compared to this side because of the traditional background that members opposite come from. We do have skin in the game and dirt under the knuckles when it comes to small business. We have seen a whole range of people on our side—the member for Forrest is a dairy farmer. It is not a big business, because we know that a small business is one that is described as not turning over more than $2 million annually. Her farm might be worth a lot more than that in Harvey but, at the end of the day, when times get tough some of these people have to use their own credit card to pay their workers and do not take a wage themselves. That is the challenge of small business. So we need to give them relief.

Let's face it: after the GFC the Australian economy went through quite a downturn. Business confidence was down and for a whole range of reasons we needed to ensure small business realised that we needed to create this ecoclimate for them to grow and develop again, not overtax them and see them as a cash cow. Again, I will tend to be generous, but because these small businesses are not very unionised, because they either are sole traders or employ only one or two people, they do not get the same attention as other businesses do. They often have to fight for themselves and fight for their own terms and conditions. If you are a corner store or if you are somebody who has decided to start up a mechanical business from your house or you do CVs for somebody as a part-time job from home, you are not unionised. You are on your own and you have to create your own business climate and struggle to do your best to get an income. This is the climate that we are having to create for those in small business. They create about $330 billion of Australia's annual output. It probably does not do the argument a lot of good to compare and contrast, but we do know that on our side of the House we have been touted as those who are champions of small business, mainly because we understand it.

We have a different view on collective bargaining and enterprise bargaining and on a whole range of other matters. Other speakers will compare and contrast further than I will. I take at face value that every member in this House is interested in supporting people in their electorate, whether they be families or whether it be an issue like schools or roads et cetera. They also support small business people because they are their constituents. It is just about how you go about helping them. In his budget reply speech the Leader of the Opposition said that they would have gone further. Well, they had six years to do that and they did nothing. I just want to put that on the record.

In my electorate of Canning, as I said, we have a range of people in areas where jobs are tough to get. In fact, the southern part of my electorate around Mandurah has a huge youth unemployment problem, mainly because Mandurah is seen as a dormitory suburb. There is not a lot of industry around Mandurah or in the Peel region. A lot of people leave Perth and, thanks to the Perth to Bunbury Highway, instead of taking an hour and a quarter to get to Perth, they can be there in 45 minutes, and students get on the train to Perth, which I am sure the member for Perth would take a lot of credit for. Unfortunately young people have to leave the area to either educate themselves or to look for work.

My electorate of Canning has a lot of FIFOs in that area. In fact during the boom time my electorate was the second highest, believe it or not, to the member for Brand's electorate for the number of FIFOs that flew in and out. Being less than an hour from Perth, people bought lifestyle blocks and a whole range of accommodation that suited their purposes so that, when they came off after their two weeks on, they could sit down and have a bit of a lifestyle.

I also have drive-in drive-outs in the electorate. I have the Boddington Gold Mine which is now exceeding the super pit in Kalgoorlie in terms of production, which is something like 700,000 ounces of gold a year, which is a massive amount of gold. People drive from Mandurah and the Peel region to jobs at the mine. I even met a day-care person in Boddington, which is nearly 100 kilometres from Mandurah, or thereabouts, who drove from Mandurah just to get the job. Youth unemployment in particular and unemployment generally in the Mandurah region is tough. We need to do what we can to foster anything that will help small businesses starting there.

There is a production called 'Peel away the mask' which was authored by a lady called Dorothy Lucks. When I first became the member for Canning in 2001 she had produced this to give a snapshot of the demographics of the area and the challenges. The area has a mixture of young families, affordable accommodation and a large component of retirees. It is an area with a lot of complexities. As I said, the area still suffers from the fact that it needs greater support to allow businesses to foster and grow. In that area is the City of Mandurah as well as the Shire of Boddington, the Shire of Murray, the Shire of Serpentine-Jarrahdale and the Shire of Waroona. All those areas find it pretty tough. If you have a mortgage and your wife cannot get a job, you struggle to pay your mortgage. Even part-time work, casualisation of the workforce, is something that happens a fair bit in that area. If a small business cannot flourish and make a profit, it cannot put on workers, even casual workers.

What we have done in this budget is to recognise that those wanting to develop in that area have the climate to do so. Alongside that we have had the Minister for the Environment, Greg Hunt, reignite what was called the Green Corps into the Green Army. That does a lot for young people. I was out last week looking at a Green Army project at Birriga Brook near Byford in my electorate. The young people told me that they need the opportunity to get their first job so that they could get a CV which was transportable somewhere else. A lot of them have done minor courses from TAFEs but they could not get a job because they did not have a CV which they could take to someone and say, 'Look, I've been in the workforce'. There is a saying that the hardest thing to getting the job is to get the first job. In this case the first job for these young people was the Green Army.

We know that the previous Green Corps was a highly successful program. The trouble is that, when the Rudd-Gillard-Rudd government came in, they combined it with long-term unemployed and work for the dole and totally destroyed it, so it was essentially switched off. We have started it again and we are looking at having many, many projects in the electorate of Canning for young people who want to get their first job. It does not matter if it is in the horticultural industry or a related industry as long as they can get that first job where they get on-the-job training and certification to take it somewhere else. Australia-wide small businesses provide for four and a half million Australians with jobs, providing four in 10 jobs in the private sector, six in 10 in the construction industry, and eight in 10 in agriculture. Measures like, as I said, reducing the corporate tax rate will lead to more jobs and even better wages.

In the remaining time that I have left, I would like to say that the small-business package in the budget was absolutely grabbed with two hands by people from my electorate. I have had nothing but positive comments from people in the electorate in relation to it. I will give you an example. The Federal Chamber of Automotive Industries said: 'Cheap tradie utes bolted out our showroom doors last month.' They had to be bolted down because people came in as quickly as they could to take them up. There is something like a 45 per cent increase in the sale of utes in Australia at the moment—today—because of this package. As we know, when people spend money it then goes around. The person in the car yard makes money and the mechanic servicing the car yard makes some money—it goes around and it helps the economy in general.

The 2015 budget is a historic budget for the growth of jobs and small businesses around Australia, and also in the electorate of Canning. This will take away a lot of the red tape that has also been a hindrance to small business. We are committed to doing everything possible to assist the small-business sector to continue as a source of growth and unemployment relief, by also seeing that they get involved in innovation.

Innovation and productivity are the keys to economic growth. Just getting a job is not necessarily the only thing—getting productivity out of people working has a multiplier effect. We know that small-business men and women and their employees are one of the driving forces for our future prosperity. While those opposite do not necessarily oppose this, and we know that Bill Shorten said he would go further, we need their support. We know that we are going to get that support when it goes to the Senate. The sooner we can get this package in place the better it will be for small businesses and the employees of Australia.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Why are we debating this? Why are we talking about two pieces of legislation that both sides of this House support? There has been unequivocal, concrete, definite support from the opposition to vote on this, to get this through, and to make this happen. Why? Because it is reinstituting measures that we introduced, measures that we believed in ourselves and that we thought would be able to provide support and help to the small businesses of this country, aiding them in investing in new equipment, helping them with their cash flow, ensuring that they could grow, or, through the course of the impact of the GFC, helping them through difficult economic times and then putting them on a trajectory for further success. We believed that.

What was the first thing this government did on coming into office? They cut it. They took these measures away, claiming they were unfunded and claiming that they should not be in place. We have heard the Minister for Small Business, in times past when he was the opposition spokesperson for small business, criticise the measures that he is championing today. So, I ask again: why are we discussing this?

If the coalition are supposed to be arguing that this is something new, I think it is new in two places. One is that they are overcompensating for what we had in place. Why? Because when they cut there was a hiatus in the level of support for small business. They are now having to make up for that by putting in a bigger payment than we had when we were in government. They are also doing it because they have to. Economically, they are forced to because the impact of their 2014 budget on confidence, on consumer spending, and on business investment means that they now have to put the money in to see this investment happen. When you see investment, when you see capex at the levels that it is—and that it is failing to lift—you can tell straight away that they need to do something to support it, which is why they are putting money in at the level that they are. We are happy that they are putting these measures back. Let us get it done. There is no need for us to continually debate this. The government, through the week, called on us to support their measures. In fact, I am reminded of the words of the Minister for Small Business when in question time on 28 May he said:

The legislation is in this place. Let us get it through this place in a hurry, and let us see if Labor is true to its word. It is not about the backswing; it is all about the follow through. Let us follow through and get these measures enacted

That was said on 28 May. The only problem is that on 12 May, when the budget was brought down, we indicated there and then that we would support these measures. We actually supported them and commented favourably on them. Why wouldn't we? As I said earlier, we introduced these measures. We have reconfirmed that in a number of other places, not least of which being in this place during question time. Today we said, 'Let's put it to a vote.' We said, 'Bring it on. Let's have this vote, move on, and get the legislation to the Senate.' And yet, what happened? We were denied it.

Why? Because those opposite wanted to have a speech-led recovery. They had all their members ready to let loose with their soliloquies, telling us about how close they were to small business and how much they supported small business. Instead of action and getting the support for these pieces of legislation, those opposite did not want the resolution. They did not want the matter to be put and did not want the vote to happen. They believe that those coalition speeches are the engine room of Australia's small businesses—that those speeches alone would power Australian business. That is why we were forced to endure speech after speech from the coalition, to ensure that we heard how close they were to small business.

We are continually told how close those opposite are to small business. They believe that they are closer to small business and that they have an affinity for small business. They tell us that so many of them have been small business operators themselves. That is great. I am absolutely supportive of that, and I congratulate them on it. But if they are so close to small business, why did every single one of them support a cut to those small businesses when the government removed those measures. And it not only removed them; it made them retrospective. This had an impact on small business. They tell us they have an affinity with small business and that they understand small business, yet they voted to stop measures that supported those businesses, and made that retrospective. They put that pain on small businesses.

They are not friends of small businesses. They betrayed the small businesses of this country with their measures and actions and the way that they refused to support them on the way through. And now, in an attempt to rebuild their credibility with small business, they have put forward these measures that reinstitute the measures we had in government and that should have been in place for a lot longer.

Instead we have to listen to them, like windup toy monkeys banging away at their cymbals, telling us about how close they are to small business. They have been told, I understand, that they are only supposed to speak for five minutes to try and get this through more quickly, and the reason they have been doing this is because they have been embarrassed. When we had a chance to get this legislation through they refused to take it because symbolism rather than action matters more to those opposite, and now we are forced to go through this. I will not speak for the full 15 minutes. I am more than happy to cut my contribution. I am happy for them to cut their contribution because I would rather we get to a vote, put these measures in place and get this up to the Senate and through. We have also indicated we will not submit it to an inquiry process. We are happy to see the vote put to the other place so we get these measures in place ahead of 1 July.

But on the way through, I will make a few quick observations about the government's claims that this budget is friendly to another section of small business: start-ups. Those is the start-up community, while they may be small businesses, are in a league of their own. They have a productivity and an employment generating capacity that makes them quite different from other small businesses. It is something that will be a national priority for us to see how we are able to create an environment in which start-ups in this country can flourish a lot more. My comments take nothing away from other small businesses in this nation, and I recognise their contribution to the strength of our economy. But we should recognise the powerful ability of start-ups to drive productivity and economic and employment growth in this country.

You cannot keep saying in a federal budget that you support start-ups but not do anything to support them. By that I mean that we saw very little to advance the types of things that start-ups are concerned about, for instance, the critical skills shortages that have been in place for a number of years that affect start-ups and their ability to progress. We do need to see more in investment in education, particularly, as we have said on this side, in terms of STEM skills in this nation. We do need to see, for instance, more to deal with the capital issues that confront and inhibit the ability of start-ups in this country to move much more quickly, much more strongly.

Certainly, we saw money assigned in this budget for a legal framework for the establishment of crowd source equity funding platforms in this nation, but we still have not got the legislation before us. We have indicated to the government we are more than prepared to work with the government on a bipartisan basis to fast track the introduction of legislation in this place that would see a framework that will allow crowd source equity funding platforms to emerge in Australia. I have had some initial, very positive discussions with the small business minister, and we are certainly happy to do that.

But my criticism of the lack of initiatives and support in the start-up space is not something that I have just come up with. It is not something that is without any sort of substance or evidence. I have, for example, seen the comments of some that have said that there is a gaping hole in the budget where there should have been a vision for a digital future—people like Matt Barrie, who have helped found start-ups that have had a massive impact not only here but elsewhere. Matt Barrie, who is involved in Freelancer, has said, for example:

Government does not know the difference between the word startup and SME at all … Every time there is a discussion about startups it morphs into SMEs, and that's why we don't see anything major happen … but I can't think of a greater industry for producing multiples than technology. The fact a 20-year-old can start a company worth $20 billion in a decade is mind-blowing.

They say that we should be working a lot faster to help start-ups in this country. He is right. Andrew Johnson from Australian Computer Society says:

… many initiatives in the budget were supportive but it was worrying not to see a significant focus on STEM skills.

Rui Rodrigues from Tank Stream Ventures, say:

Overall, it's positive that the government has mentioned startups twice in the budget but specific incentives are still lacking …

We need to see more in this space not less, and I certainly commend the government. If they were prepared to work with us, we will work with them in advancing the interests of this sector because it will have a massive benefit to the nation and will ensure that we have jobs for the next generation of Australians in years to come.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to speak on the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 that is of so much benefit to small business. I will deal with some of the measures within this package of bills that is coming alongside these shortly. But I cannot resist starting where the member for Chifley left off. The member for Chifley gave the parliament a lecture on the importance of start-ups, and we wholeheartedly agree start-ups are important. I know the member for Chifley pretty well. The member for Chifley follows these issues closely. But the member for Chifley, unfortunately, airbrushed away some of Labor's history. He lectured this side of the parliament on start-ups when it was his side of the parliament that did all they could to stop the start-up sector with respect to employee share ownership. I say to the member for Chifley you were—

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

We did the wrong thing.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

That is an interjection I am happy to take. Let's put it on the record. He said: 'We'—being Labor—'did the wrong thing,' and that is a good acknowledgement. I think you are the first member on your side to acknowledge that. We had the legislation on employee share ownership just a week or so ago, and I will check the Hansard whether you acknowledged it then, but speaker after speaker airbrushed away the catastrophic damage your tax changes in 2009 did to the start-up sector and employee share ownership more generally. I welcome the fact that you acknowledge you did the wrong thing. You were not there at the time, but you were there for a few years in government where at no point did I hear one single Labor member say, 'We did the wrong thing and we've got to fix it,' and fix it when you had the chance, and you have the chance. Maybe you were arguing this in the party room—maybe you were—but, of course, the start-up employee share ownership killer was your shadow Treasurer. He became Treasurer. If he thought he had done the wrong thing, you would have thought that the first thing he would do was do something about it, but he did not. I think the member for Chifley is passionate about this area, as am I, but at least acknowledge that failure. Acknowledge the six lost years—and that is what they have been: six lost years.

Now we are rectifying and rebuilding what Labor wrecked. I am the first say I want to go further—of course—but when it comes to these small-business measures, Labor airbrush away the history of their failure on employee share ownership and start-ups. They were not listening to or quoting the start-up sector then. You would not find too many quotes of the start-up sector from Labor members during their six years in government.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Or from you.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

That is absolutely not true. You will find lots of quotes from me.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

No, sorry, your side.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

You will see me, because you will go back to your office. I know you will; you are a diligent—

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Order! We are not having a conversation. We will have comments through the chair.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

It is friendly banter, Mr Deputy Speaker, but we will follow the procedure. You are a diligent member. You will go back and read the Hansard, and you will see me pleading with your shadow Treasurer in the days after that catastrophic budget to stop, to pause and to rethink. You will see your side defiantly moving on and causing the damage it caused.

When it comes to this bill and the bills that will follow it, those opposite say they support them—and that is great—but they distort their own record. It does them no justice to say that the instant asset write-off is something they did when the amount they were talking about was $6½ thousand compared to $20,000, trying to pretend it is the same. As everyone in small business knows, it is a monumental difference. The head of the Council of Small Business Organisations of Australia said it best on budget night. In an interview with Macquarie radio, he said: 'The $20,000 is big. That was unexpected and unseen. No-one saw that coming, but it's everything else that goes with it and it's the message out to small-business people we are thinking of here, and that's what the government's done, in a way I've never seen before. And all those things you bring up, Ross, you're right to bring them up. They're very important in the real world of running an individual business.'

The tax cut for all small businesses under that $2 million threshold is comprehensive; it is real. The instant asset write-off for items up to $20,000 is a huge benefit. Those opposite say that they had an instant asset write-off and refuse to acknowledge its smaller size and its smaller benefit. But there is another thing they refuse to acknowledge. They paid for that by jacking up income tax on small businesses, because they abolished the entrepreneurs tax offset. They abolished it, as the very dedicated and passionate Minister for Small Business pointed out in this House, back in 2011. They abolished the entrepreneurs tax offset, which was a modest 25 per cent rebate, for the 400,000 smallest businesses. So what Labor actually did was put up income tax for 400,000 small businesses—the smallest; the micro-businesses. They were those start-ups—people starting out back then.

Then, of course, we had the Leader of the Opposition's budget reply, where he said our 1½ per cent cut to company tax was not enough. He said that Labor would go to five. Of course, in doing so he did not have the comprehensive policy to benefit, in a tax sense, all small businesses under that $2 million threshold. Apart from having no real costing around it or how he would deliver it, what we do know is that he left out the majority of small businesses—because about two-thirds of small businesses are not incorporated. That clearly shows how we had a comprehensive package, with a 1½ per cent cut for those that are incorporated and, for the small businesses that are not, which is the majority, a tax discount of five per cent up to $1,000, which roughly equates to that same 1.5 per cent. But the Leader of the Opposition left those small businesses out. You could say he left them out because he does not know they exist. That would be a harsh criticism—and do you know what, Mr Deputy Speaker? I am not going to make that criticism. I am going to make a harsher one. He left them out so he could make his speech sound better by saying he would have a five per cent cut in the corporate rate and make all small businesses think they would benefit from something he is never going to deliver and something that is not comprehensive.

These measures are the most significant small-business measures in any budget in living memory. They are critical measures to help start small businesses, to support existing small businesses to grow and create more jobs, and to strengthen our economy at a critical time of economic transition. There are measures there for those just starting a small business to be able to instantly write off their costs of setting up. There is the tax cut for small business that this bill deals with. There is the instant asset write-off. And, as the small business minister outlined last week at the National Press Club, there are other measures for the farming community as well.

Some of us have electorates that are partly suburban and partly rural. I represent the Yarra Ranges and the Yarra Valley, and, on the ground, the small business owners see this as a breath of fresh air. I was at the Wandin football club on the weekend. Knowing you, Mr Deputy Speaker Randall, you would have been at a local football club somewhere in your electorate, over the other side of the country. Wandin were playing Monbulk in the seniors. This is a country league football-netball club. I wandered up to watch some of the netball, and a small business owner asked me about these incentives and where he could get more information, and said, 'That is absolutely fantastic!' Those measures are going to help enormously and they are going to be a real benefit to his business and to his staff, and of course they will have flow-on effects to the other small businesses in and around the electorate.

Those opposite would do themselves a favour if they acknowledged these good measures without distorting their own record and without failing to acknowledge the areas in small business policy in particular where they took the wrong decision. We have said many times in this chamber that we are the party of small business. And the member for Chifley spent some time on this. Those opposite will criticise what we say. But I say to those opposite: you need a long memory in this business. And I am saying to them: the Labor Party is not the party of small business. The reason I can say that in a compelling way—because it is not just my opinion—is: Labor has long thought this. And I will finish on a quote from your former leader, Kim Beazley, who said, back in 2000, when he was leading the Labor Party: 'We have never pretended to be a small business party, the Labor Party; we have never pretended that.' He was right then. He was telling the truth. So you can take his word for it, because you will never take ours.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I love being lectured by the other side about what the Labor Party is and is not! Perhaps, if people are so well versed in what the Labor Party is, they might consider joining the Labor Party! I can tell you right now that the Labor Party is a party that stands for small business.

I, like many in this House, grew up in a small business family. I can remember: on the weekends, I was in the shop. It is how I learnt to count; I was helping with the cash register. CJ Discount Furniture was my family business. We sold second-hand furniture, and we had one employee. So it was a small business that employed one person who helped out and was paid award wages. But largely it was my mum and dad who did the work.

I was reflecting on how my parents, as owners of this business, would have engaged with this debate and whether they would have had the confidence now, because of these measures, to go out and buy new assets for that business, whether that be a truck, or a new cash register—one of the electronic ones. And I thought to myself, 'Probably not, because this government just can't be trusted.'

This particular policy is a fabulous example of this government's ability to backflip. There have been so many backflips from this government in a short period of time that they could almost qualify for the Australian Olympic team—seriously. When these measures were put forward by the former Labor government, those people, who are now claiming to be the best friends of small business, voted against it. They voted against increasing the instant asset write-off and they sided with the Greens in the Senate to block cutting the company tax rate for small businesses, but now we see them in this bill, the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015. One of the very first things they did when they got elected into government was to scrap Labor's instant asset write-off of $6,500. How could you do so many backflips in such a short period of time, when your record states your position on these measures, and think that small businesses are going to trust you this time and have confidence in you? What is going to happen next month? What is going to happen next year? In a three-year term of government, the first year you repeal it; in the second year you bring it back; what is happening in the third year? I understand why small businesses in our communities might be a bit sceptical about this government and their measures, because their talk is quite cheap, because of their track record. They are backflipping over and over again on policy, particularly in this space.

In Labor, we have said consistently, since before budget night, in our contributions after the last budget and after this budget, that we will support the company tax cut of 1.5 per cent. We said that in our contributions because we believed it was a good idea when we were in government; we believe it is a good idea today.

When this government came to power, one of the first things they did was to cut assistance to small and micro businesses by $5 billion. That is what they did in their last budget. They also slashed the instant asset write-off for small businesses—the very measure that this government is trying to bring back in this bill. These cuts have hurt small businesses, particularly in my own area of Bendigo.

Yes, in Bendigo and in regional areas, we have a very strong network of small businesses. The Bendigo small business network meets every Friday morning. They reviewed the measures that were in the budget and when it was put forward that the instant asset write-off was back they went, 'Then why did they get rid of it in the first place?' They were the words at the breakfast the Friday after the budget night. They were scratching their heads going, 'So now it's a good idea? They're bringing it back.' They have lost and broken the trust of so many small businesses out there. These cuts, as I have said, have hurt small business cash flow, they have hurt consumer confidence and they have also hurt the confidence of small businesses to get out there and invest. Now, in an effort to save their own jobs, their own backbenchers, their own marginal seats and their own ministry jobs, they are proposing to bring it back. Their track record, though, means that they cannot be trusted.

Labor believes in small business. In government we had a good record on supporting small business with a number of the tax incentives that we introduced. Labor increased the instant asset-write-off threshold for small businesses from $1,000 to $6,500. The number of assets that this could apply to was unlimited. Labor also introduced the accelerated deductions for motor vehicles and increased the tax-free threshold, something that had not happened in this country for a very long time. Labor tripled it, not only helping low-income earners but a number of our sole traders. The sole traders that I have met in small country towns like Maldon and Elmore have said that that measure, that particular introduction by Labor, helped out their small business.

This is in contrast to what we have seen from this government, and their appalling record since they came to power—the backflips that we have seen. We have members of the government who voted against these measures when they were in opposition, who then voted to repeal them after last year's budget, and who are now going to vote for them. Can you imagine the score card that is going to go out in their electorates? We talk about trust and credibility in this place. On this issue, which they are championing so loudly, you would think that they would be a little bit embarrassed. You would think that they would be a little bit humble about it. Instead, they have gone and made this big song and dance about the fact that they have backflipped, and about the fact that they are now supporting Labor reforms that we put forward when we were last in government. I am quite surprised that people are quite openly going out there and promoting the fact that they have backflipped on these policy measures, because it is not going to take long for the score cards to be developed and distributed.

As I said, in the Bendigo small-business network, in my own electorate, the day after the budget, the question was asked: if they support it, then why did they scrap it? It is not just the backflips, and that they are now agreeing to really good Labor policy. They have also tried to overreach by suggesting that this policy will create thousands and thousands of new jobs. Sure, there might be some jobs that it creates in retail, but they will not create jobs in small business. Sure, they will help the productivity of some of these businesses. But when I have asked small businesses if they will hire an extra person they have said no. They might by a coffee machine for the workplace. They might be a TV. They may or may not by an asset that they do need, but it is not enough for them to hire a new person.

I really think they have overreached on how many jobs they believe this measure will create. This policy is not about creating jobs. It may create some retail jobs, but it is not the silver bullet to solving Australia's unemployment problem. It is not the silver bullet to reducing our unemployment rate, which is now at the highest level we have had since the Prime Minister was the employment minister in the Howard years.

There are other examples about how this government is failing small business—in government procurement and in cleaning. Cleaning companies by and large are small to medium businesses. They work on margins. This government scrapped the Clean Start Guidelines, meaning that contract prices are going to fall. Contract prices will fall as a result of this government. This government has failed cleaning companies that are competing for contracts. They are now undercutting each other and going to a lower rate and smaller contracts as a result of this government. That hurts those businesses.

Defence manufacturing is another area where this government is hurting small business. Some people may think it is all large businesses that are involved in Defence contracting; it is not. In Bendigo we have Thales, which built the Bushmaster, but 120 companies are part of that supply chain. The mufflers on the Bushmaster are made at a small business up the road in Long Gully. At that business, they are worried about future work at the site, because this government is dragging its feet on signing the Hawkei contract, which is the next vehicle that we want to build out of Bendigo.

This government is hurting small businesses in other ways. I think it is important that in this debate we highlight the other attacks this government is making on small businesses. Consider petrol prices and the fact that this government is increasing the fuel excise, and that it will be passed on to motorists, including small businesses. Petrol prices are going up for our courier drivers—not the ones who use diesel—but for the simple car for small businesses. In regions like mine, people drive further. To get from A to B means that you spend more on petrol. It is a hidden cost that is going to hit our small businesses. Now consider farmers. We all know that our farmers are small businesses, yet what this government failed to do when they were first elected was to support the farmers who supply SPC. They refused to support SPC, and left it up to the state government to help SPC modernise and survive. They hurt the small businesses—the farmers—around Shepparton, by not supporting SPC.

GPs, too, are small businesses. We have heard time and time again that they are small businesses. What does this government do to our GPs, which are small businesses? They tried to hit them with the GP tax. They tried to introduce a GP tax and make them be a collector of tax to pass on the government. What is this government now doing in this budget to our doctors? They are freezing the Medicare rebate—another hidden attack on small business. I could go on and on about the hidden attacks in this budget by this government on small business—whether it be procurement; whether it be their ridiculous red tap repeal days that involved abolishing minimum pay rates and standards in the Clean Start Guidelines; whether it be their budget; whether it be their failure to invest and support industry development and growth; or whether it be the backflipping they are doing on important, key, core legislation like this. This government is failing our small businesses. They are creating uncertainty. We have seen more backflips in this area of public policy, more backflips here than elsewhere.

As I said, these are good ideas that Labor introduced when they were in government. It is great to see the government change their mind and join us and vote with us. Let us hope that it is for longer than 12 months. Let us hope that in next year's budget we do not see another backflip and that it does not go from 20,000 back to 1,000. Let us hope that these measures are genuine and real and that they have finally caught up and are on the same page as Labor when it comes to small business.

Let us also hope they get on with supporting industries and the small business industries that we have, like Defence manufacturing, like contract cleaning, like government procurement. Let us hope that this government realises that the support for small business also includes supporting industry, the industries that we have.

Let us also hope that they get behind trades, get behind our skills and ensure that we have the skilled young people ready to work for these small businesses. When I talk to small businesses—when I am out there in Kyneton talking to the shopkeepers, when I am talking to the Bendigo Small Business Network, when I am talking to the Bendigo Business Council—they talk about a couple of key areas, and one them is trades.

One of them is the fact that another thing this government they scrapped was Tools for Your Trade. Small businesses want to talk about how this government withdrew so much money from the apprenticeship scheme. They want to employ young people; they want to find skilled young people, but this government has made it harder for them. This government walked away from ensuring that we have skilled young people ready to go into their business.

They also talk about the need for this government to buy what we make; to have genuine, decent procurement policies for local goods and services. Again, all we see is stalling from this government. These measures are welcomed. We on this side have said that we support them. It is great to see the government backflip the right way and support these measures.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I know the member for Bendigo is a new member here but I think a bit of history lesson is due in relation to the previous government's wonderful dismissal of small business and their importance to our economy. The member for Bendigo touched on the instant asset write-off that Labor introduced; that was funded by a tax that raised no money. But that is not unusual for the former government. She touched on increasing the tax-free threshold to $18,000, as though that was some magnificent achievement. In reality it was compensation for the increase in the carbon tax. I would like to remind the member for Bendigo that it is actually this government now that has repealed the carbon tax, but we left the increased tax-free threshold in place. So individuals and small businesses that are not structured as companies are far better off under this government as a result of the fact that we got rid of the carbon tax.

In regard to Defence procurement, I have a couple of small businesses in my electorate that supply services to Defence, and I can tell you from discussions we had when the previous government was in power, when they removed $16 billion from Defence, those businesses suffered at the hands of that previous government. So to be lectured by the member for Bendigo about what the previous government did or did not do for small business is a little bit rich.

I have great pleasure to rise today to support the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and Tax Laws Amendment (Small Business Measures No. 2) Bill 2015. The 2015 federal budget's $5.5 billion Growing Jobs and Small Business package is the biggest economic recognition of this sector in Australia's history. Introducing policy initiatives to grow Australia's small business sector is imperative in boosting confidence in our nation's economy.

Small business makes up 96 per cent of all Australia's businesses, employs more than 4.5 million people and produces over $330 billion of our nation's economic output per year. In 2013-14 alone, Australians started over 280,000 small businesses. What a transition, compared to six years of Labor where around 519,000 jobs were lost in small business—equating to around 1544 job losses each week.

When the Howard government left office, Australia ranked 68th on the global competitiveness index when it came to government regulation. After six years of Labor and six different small business ministers, our nation was wrapped up in red tape and slid down the ladder to 128th.

The hardworking women and men of Australian small businesses are the engine room of our economy, and it is our belief as a government that they deserve a better, fairer and more competitive system that supports—not hinders—small business growth.

Small business owners are the 'have a go' Australians who follow their dreams, take a risk and dive in to the world of business. They are the people who provide services; train and employ people; and contribute to the economic growth of their local communities. There is no doubt small business is at the forefront of Australia's jobs and growth, and the coalition is delivering for small businesses now and into the future with this legislation.

The first small business measure is about the reduction of small business company tax rate, a measure that will boost cash flow, profits and productivity of Australian small businesses, and give them the opportunity to grow their business, become more competitive in the market, take on new employees and retain more earnings for reinvestment to provide the capital that they need to grow their businesses. Providing the ability for businesses to reinvest leads to existing output being produced at a lower cost, new and improved ways of doing business, and overall improving our nation's productivity.

We want to see higher investment leading to higher employment and wages over time, and the measures undertaken in the Growing Jobs in Small Business package is the first step in achieving this. Reducing the company tax rates for incorporated small businesses is at the heart of this Growing Jobs and Small Business package. This will be achieved by reducing the company tax rate by 1.5 per cent to 28½ per cent for companies with aggregated turnover of less than $2 million, from the income year commencing 1 July 2015. I am proud to say that this is the lowest tax rate for small business since 1967. This proposal will create a two-tier company tax system whereby companies with an aggregated turnover of below $2 million will be subject to the lower rate and those above $2 million will be subject to the current 30c tax rate.

Some 780,000 small businesses in Australia will benefit from the 1.5 per cent tax cuts. The flow-on effects will be instrumental in boosting our economy. Along with other Growing Jobs and Small Business package measures, reducing the company tax rate will assist small business to grow and compete more effectively with larger businesses and will create more jobs for more Australians. More people in work means fewer people on welfare and more money for individuals and families, resulting in a stronger Australian economy.

The second small business measure will do three things. It will provide accelerated depreciation arrangements to small business as well as primary producers, will encourage the prosperity of small businesses and will improve the resilience of Australia's farming community. Helping more small businesses become profitable and sustainable will put small business owners in the best position possible to hire new employees and provide more jobs, particularly to Australia's younger people and older workers. I will use the example of one of our local businesses shortly.

This bill will amend the small business simplified depreciation rules to increase the threshold for immediate deductibility of assets, from $1,000 to $20,000, and an unlimited number of assets provided they are each less than $20,000 in value. This is a significant increase in the threshold and will create significant gain for small businesses, with around 96 per cent of all Australian businesses able to access the accelerated depreciation and to potentially benefit from this increase.

I was speaking to the owners at one of my local businesses, CG's Coffee & Grub at Bethania, who have been open about six months. They said that there was not a single piece of equipment in that shop that was worth more than $20,000. So under these measures they will now be able to write-off that whole investment of $70,000 or $80,000, which they used to set up that new business six months ago, in this financial year.

Small businesses are complex in nature. These budget measures strongly reflect our government's understanding of this. Small business is at the very heart of rural and regional Australia. With this in mind, the second thing this bill will do is amend the tax law to provide simplified accelerated depreciation rules for all farmers.

I am very proud to have seen these two important measures introduced to encourage a more prosperous and economically sound business climate in Australia. As I have touched on many times, our small business sector is vital and important to where we want our economy to grow, develop and prosper because, more often than not, it is where the innovation and creativity is reflected. Many of the large businesses that we see today not only in Australia but globally were once small businesses that were innovative and leading the pack. Through that innovation they have grown to now be major global businesses that, in some cases, employ thousands, if not tens of thousands, of people.

Along with the Growing Jobs and Small Business package measures, I think we need to reflect on some of the other things that we are doing in the broader context of employment. The member for Bendigo touched on Tools For Your Trade loans. I would like to remind the member for Bendigo that we introduced trade support loans for apprentices, to the value of $20,000. If they complete their apprenticeship, they get support in the form of a discount on that for having completed their apprenticeship. There are many other things that we are doing in the employment arena to support small businesses both in this budget and in the previous budget, because we recognise that if we can get people into the workforce it is better for all concerned. It is interesting to note the comments from the Australian Chamber of Commerce and Industry CEO Kate Carnell. She said:

… the government is looking after those 1.7 million unincorporated small businesses—

with these measures—

including tradies, sole operators and partnerships …

She made the point:

Making it easier for small businesses to claim tax deductions for their expenses will make it easier for small businesses to invest.

Another item in this budget to assist many small business producers, particularly in our rural areas, allows primary producers to receive accelerated depreciation on a wide range of matters. Australia's primary producers have been dealing with tough conditions both naturally and economically. These budget measures will improve the resilience of our primary producers who face drought by assisting with cash flow and reducing red tape by removing the need for primary producers to track expenditure over time.

The three main changes to the depreciation rules for primary producers will see all primary producers being able to immediately deduct capital expenditure on fencing. Currently, the effective life of fences is 30 years. I think it was the Minister for Agriculture who, in reflecting on his previous life as an accountant, said, to paraphrase, 'I never saw much repair and maintenance occurring on the fences. They were always fixed.' Secondly, primary producers will be able to immediately deduct expenditure on water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers, windmills and water facilities that are currently depreciated over three years. Thirdly, primary producers will be able to depreciate, over three years, all capital expenditure in forage storage assets such as silos and tanks. Currently, the effective life of fodder storage assets can be up to 50 years. The capacity to write these things off, and also the fact that you do not have to keep all of the associated paperwork for that length of time, reduces the paperwork burden on many small businesses. It will also reduce the cost of getting their accounting and book work done every year, so that is another cost saving to small business.

Our government is focused on strengthening the competitiveness of the whole small business sector in agriculture and manufacturing. The member for Bendigo touched on GPs but neglected to mention pharmacies. We have put an extra $2.8 billion back into community pharmacies through the Sixth Community Pharmacy Agreement. The Australian economy is currently facing some structural adjustments as the mining boom wanes, and we see that effect flowing through the economy. Small businesses are typically more vulnerable than large businesses to shock and changes in economic conditions. So during this period of economic transition it is important that the government's policy settings support small business growth and innovation. We have also done this in the employee share ownership space. We have removed some of the onerous restrictions on employee share ownership that the previous Labor government introduced in 2009. We have made it much easier for businesses to start issuing shares to employees to balance the remuneration mix—start-up businesses might not initially be able to pay higher rates of wages. Helping small businesses become profitable, sustainable and competitive is in the long-term national interest.

I commend these bills to the House.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

It is a pleasure to speak on these bills and indicate my support for them. It has been amusing to watch the government's contortions in its attempt to create a sense of concern that Labor was ever going to not support the bills given that all the indications we have given since the initiatives were announced on budget night have indicated quite clearly that we were intending to support the bills. As many others, including the Leader of the Opposition, have said, the ALP's position reflected the fact that many of the initiatives were actually ones that we had put in place and that the government actually abolished in the 2014 budget. So, of course, it is a pleasure to be able to support these initiatives. It is a pleasure to be able to welcome a positive backflip by the government and to see the opportunity to support measures that we, when in government, felt were important and useful for the wellbeing of small businesses. We were very disappointed to see the government abolish these measures at the last budget so, of course, we support the bills that are before us.

I want to outline some of the major initiatives under the bills and talk about the implications in my seat of Cunningham. I also want to talk about a less happy side to this story, which is my portfolio area and what is happening with small businesses in the skills space. The first bill before us, the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015, amends the Income Tax Rates Act 1986. Its purpose is to reduce the company tax rate from 30 per cent to 28.5 per cent for companies that are small business entities—that is, those with an aggregated turnover of less than $2 million. For all other companies over that threshold, the company tax rate will remain at 30 per cent. The government's estimate of the financial impact of the bill is approximately $1.45 billion over the forward estimates.

The new tax rate of 28.5 per cent for incorporated small businesses will take effect from 1 July this year, and it commences a two-tier tax system for business in Australia. Labor supports the bill. Schedule 1 of the second bill before us, the Tax Laws Amendment (Small Business Measures No. 2) Bill 2015, amends the accelerated depreciation rules for small businesses by temporarily increasing the threshold under which certain depreciating assets, costs incurred in relation to depreciating assets and general small business pools can be written off. The increased threshold of $20,000 applies from 7.30 pm on 12 May 2015—budget night—until 30 June 2017. From 1 July 2017, the threshold reverts to $1,000. The increased threshold is available to all small businesses. Schedule 2 of that bill amends the Income Tax Assessment Act 1997 to allow primary producers to claim an immediate deduction for capital expenditure on water facilities and fencing assets and to deduct capital expenditure on fodder storage assets over three years. The date of effect for that measure also is 12 May 2015.

In relation to the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015, which deals with the tax rate, I want to put on record the fact that Labor has supported, and had a significant commitment to, reducing the tax rate for small businesses. In fact, we had a proposal to do just that when we were in government. For the record, it is interesting that those opposite actually voted down that small business increase at the time. They said it was unaffordable. It is hard to see what the difference is now, given that they are a government that claims there is now a debt and deficit issue that must be handled. Apparently, this is now a positive stimulatory measure. The only difference really is that that was a Labor government proposal and now it is a Liberal-Nationals government proposal. It is interesting to see that what was, when Labor was in government, an unaffordable measure has now become a critically important one. But we welcome that.

I also want to touch on what I believe was an important contribution by the Leader of the Opposition in his budget reply speech. He indicated that we would be keen to talk to the government about the opportunity to make that a more significant, five per cent, decrease. Given that there has been quite a history now, across the Rudd-Gillard governments and the Abbott government, to look at ways to stimulate small business activities in all our communities, that that would be a good opportunity for the government to take up.

I think it is particularly critically important to also acknowledge that the measures in the second bill before us, which introduce accelerated depreciation for small business entities and primary producers, are something that we support. We support them because we actually introduced them, just a few short years ago. We in government increased the instant asset write-off from $1,000 to $5,000 and then further increased it to $6,500. In fact, it was this government, in its first budget, that then wound it right back, to $1,000. It is hard to understand why something they did not like only 12 months ago they now do like, but we can only be grateful that that is the direction they have taken, rather than cutting something again. The instant asset write-off and other tax measures that are designed to help small business and business more broadly are important initiatives, and they are proposals that will make a difference to small businesses in many of our communities. We agree that they are great for small business, and we have done so since budget week.

I also want to talk about the other side of the debate that is occurring around these initiatives. Obviously many members on both sides of the House have talked about the role these initiatives will play in stimulating activity, innovation, business development and the opportunities for improved efficiency and productivity in small businesses across our area. I think that is true, and I certainly hope that that is how it plays out.

The other area that is talked about quite a bit is the capacity to address jobs, and this is what I specifically want to focus on. I have expressed in the parliament my serious concern that there was no vision for jobs in the budget and specifically no articulated vision for how we would ensure that we had the flowthrough of people to take up whatever new jobs the government proposes will flow from these small business initiatives. I have concern about this because there are ongoing and consistent reports from business about a skills mismatch, about their inability to access the skilled people they need for the emerging job opportunities they have. Only today, on the front page of the Daily Telegraph, there was another story about feedback from businesses, about their concern that there has been such a significant drop—over 20 per cent—in commencements of apprenticeships. They are concerned that the ability to find young people who are the right match to undertake an apprenticeship is getting increasingly difficult. And I should point out that there has also been more than a 20 per cent decrease in completions of apprenticeships. So, even those they take on are not actually completing their apprenticeships.

I think that is a major failure of the government, and it has a direct relationship to small business opportunities. When I talk to small businesses in my region—and I know that members across the House would have the same experience—for many of them the No. 1 concern is not just that they get the right skills to match the jobs that they might have available; they are just good people who want to give young people a go. That is the consistent message I hear from so many small business people, particularly as many of them have themselves gone through trade training or some of the paraprofessions that are available in our TAFEs and VET sector, and they have used that qualification, that skill and experience, to set themselves up as small business operators. They have families and nieces and nephews. They are connected into their communities—of course they are, very much so, probably more significantly than is the case in the big businesses that many of us have in our regions. Small businesses are significantly community people, and they really want to give young people a go.

So, it is a particularly important task for government to be supporting the next generation of tradies and small business people, giving them the opportunity to get a leg-up and a start their own small business. That is why I have been particularly critical of a number of cuts the government has made. The first one I want to talk about is the program Labor had, in government, that specifically addressed this. It was called the Apprentice to Business Owner Program. It recognised that many apprentices finish their training period, quite often with a large employer—which, to its credit, has had an ongoing apprenticeship program and puts people through the program—and only a few are kept on at the end, and the others need to go out and either find alternative employment or, as so many do, set themselves up as their own small business. That requires a whole range of additional skills and knowledge quite separate from the sort of training they got in their apprenticeship—business regulation requirements, marketing and promotion, or a range of other skills and knowledge. This program offered training to post-apprentices so that they could actually get that skills and knowledge and get themselves set up and operating as a small business. What happened to that program? It was abolished in the 2014 budget.

The other issue that is raised by small business and reflected in today's Daily Telegraph story is getting young people with the right level of skill to actually undertake an apprenticeship. Employers, people wanting to take on an apprentice—and I am sure all the members here have had similar experience in their areas—will often say that they cannot get someone who really has the ability to undertake the apprenticeship. They need some more language and literacy, numeracy and other forms of job-readiness training for the employer to have the confidence to put them on as an apprentice.

In answer to that, in government we had a program called the Apprenticeship Access Program. This enabled organisations to take on a young person who was really keen to do an apprenticeship but was not quite ready for it. They gave them the training and skills, and it was highly successful in translating those young people into full-time apprenticeships. When I was a minister I met a great example of that, at Parramatta, with the Motor Traders' Association. They were heavily committed to providing this access point—and had a great relationship with a whole lot of traders across Parramatta—to give disadvantaged young people the opportunity to skill up and be ready to undertake an apprenticeship. It showed you how all of those small- to medium-sized businesses across that area were dedicated to giving young people a go. What happened to that program? It was abolished in the 2014 budget.

The last one I want to touch on—although there are many of them in my area that have been cut—is the Joint Group Training Program. Group training organisations have been fantastic for decades in employing apprentices and then having them placed with small- to medium-sized businesses in order to get the training. They were set up because people recognised it was difficult for small- and medium-sized businesses to manage the employment, mentoring, support and all of that administration and additional work that needs to be wrapped around an apprentice to make a successful completion. In big organisations you have HR departments and people who have the capacity to do that, but small businesses were missing out on taking up apprentices or trainees. So the Joint Group Training Program was funded by government to boost training organisations—to ensure and guarantee that small- and medium-sized businesses would be supported to take on apprentices. I am very sad to report to the House that in the MYEFO last year it was cut by 20 per cent, and it has been completely axed this year.

We want to talk about providing opportunities for the next generation of small businesses and meeting the requirements of current small businesses who want to get the right skills-match for emerging jobs or just give young people in the area a go. This government needs to have a really good look at the decimation created in the skills portfolio. There is not a single new initiative in this budget. They are failing the next generation of small businesses, tradies and people who want to give young people a go.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise to speak on these two bills, Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and Tax Laws Amendment (Small Business Measures No. 2) Bill 2015. In fact, the 10,000 small businesses in my electorate of Lyne will probably frame these bills, they are so useful to their businesses.

What does 'small business' mean? A small business means you are putting your family's wealth and income on the line and taking responsibility for your life. You are also often putting a mortgage on your house to fund your small business. If anyone in Australia has ever been 'having a go' in difficult times, it is people in small business. It is the employees who get paid first. It is their super. The boss is the last one to get paid in a small business and, until you are very successful, that is the lot you lead. But you are taking control of your life, you are backing your own judgement, you know your product, you know your market and away you go.

I am so proud to be part of a coalition government that is giving small businesses—finally—some concrete, tangible help that will improve their bottom lines. For incorporated businesses a 1½ per cent tax cut in the company tax rate is delivery on a promise we made in the 2013 campaign. If your aggregated turnover is less than $2 million, it will happen straight away—in fact, retrospectively, once this gets up to the Senate and through the Senate. It would be a very brave senator in the other house to knock back this legislation. Even the opposition is trying to claim credit for it, it is that good. So bring it on, I say. There is also a five per cent tax benefit—

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

Bring it on is what we did! We tried that today.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Order! Let the member speak in silence, please.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Unfortunately, the other side does not realise the Senate is not sitting today. Maybe they just wanted the legislation to sit on an empty bench on the tables up there. The attendants have it all locked up. Democracy is what it is. There are lots of coalition people who want to speak, so I do not want to dwell too long—because good news is here. If you are an unincorporated company, a sole trader or the like or a tradesman and you are operating in the Lyne electorate, once this legislation is through it will be backdated to that magical date that the biggest minister for small business has spoken about—that golden day of 12 May—and you will have a five per cent tax cut up to the value of $1,000.

There is also the matter of simplified depreciation. This means that instead of the charade of working your accountant to the bone with various depreciation schedules, each and every piece of equipment up to the value of $20,000 is immediately written off in one year. If you have equipment greater than $20,000 it can go into a pool and then it gets an accelerated depreciation—10 per cent in the first year and 30 per cent for the next three years—rather than having some items depreciate over 30 years. If your whole pool of small equipment is less than $20,000 you can put it into the less-than-$20,000 one and write it off directly. That will give you an improvement in cash flow of about $4½ thousand for the average small business. That is to your bottom line.

In the Lyne electorate we have about 1,800 registered agricultural businesses. They all have fences, troughs, dams, tanks and bores, and some of them even have windmills, but the benefit to them is that the write-off on this equipment, whether it be a fence, comes up in one year. You do not have to depreciate it over three years

That is going to be a huge benefit to your bottom line, particularly whilst we have got good commodity prices, and for once in your life you are going to make a profit out of your farm and you have the opportunity to have a tax break. It is a question of intersecting good things happening: a tax break when you are making a profit and you have more tax liabilities. And we are giving you a head start on that.

Also, for fodder storage, for putting aside grains or all sorts of things in sheds, you have the ability to accelerate the depreciation over three years instead of 30 years. Those who run their businesses with franking credits will have their franking credits remain at the 30 per cent rate, even though their tax rate is at 28½ per cent.

That will keep things simple, it will be beneficial to your bottom line and will improve your cash flow. All sorts of other things that we have done for small businesses and for apprentices have been mentioned by other speakers, like the $20,000 up-front trade support loan for apprentices, with a $5,000 discount if they complete their apprenticeship on time. We have recently announced Work for the Dole and work experience programs. There are so many good things in this budget, but the small business tax changes and the accelerated depreciation are such a tonic.

Compare that with what happened with the Labor government in the last administration: we had 519,000 fewer people employed and the percentage of small businesses went from over 52 per cent to about 43 per cent. The proof of the pudding is in the results: you have one government, led by the ALP, that did not have small businesses flourishing. And you have what we have happening now, where small businesses are going to have a better outcome and a better cash flow. I commend these bills to the House.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and cognate bill. I begin by acknowledging the importance of small business to our nation. Small business employs some 47 per cent of private sector employment throughout the country. Small business operators, as other speakers have quite rightly said, risk their own money and often their life savings to set up their businesses. They work long hours, they make huge sacrifices and they provide training and apprenticeship opportunities for young people. It is often small business operators who are the innovators and entrepreneurs in a rapidly-changing economy and, very notably—and I am sure this applies not only in my area but across the country—it is small business operators who are the major sponsors of local community sporting clubs. Indeed, small business contributes some $330 billion annually to Australia's GDP. Can I also take this opportunity to acknowledge the good work of two small business organisations in my electorate—the Business Enterprise Centre Tea Tree Gully and the Salisbury Business and Export Centre, both of which provide training, business advice and guidance to the many small businesses that exist in the region.

This legislation, as the opposition leader made very clear today, has Labor's support. It has Labor's support because we support the reduction of small business tax by 1½ per cent, from 30 per cent to 28½ per cent, and we support the instant asset write-off provisions within this legislation. They are worthwhile policies and, as other speakers on this side have also made very clear, they imitate a policy that had been put in place by Labor in response to the global financial crisis that this country was also confronted with only a few years ago. They are policies that we acknowledge will stimulate the economy and they are policies which, regrettably, the Abbott government stopped once they came to office after the 2013 election. Yet we now have them, some 18 months later, effectively reintroducing policies that are framed on previous Labor government policies. Perhaps a little honesty from members opposite would do them no harm in respect to this matter and it may even help their credibility.

Most importantly, what matters for small business is a strong economy, confidence in the economic outlook and confidence in consumer spending. With respect to those matters the Abbott government has failed. We see this year's deficit being $41 billion; next year's projected deficit $35 billion and we will not see the budget back in the black under the life of this government. Indeed, net debt was 12.8 per cent of GDP in 2013-14 and it will rise to 17.3 per cent of GDP in the 2015-16 budget—that is in the government's own budget papers. In other words, the government is falling further and further behind. Consumer spending is equally falling as a result of that. That is partly because it was this very government that ran the narrative that debt and deficit is bad, that it is terrible for the economy and that it will only make things worse.

They now have to respond to the very things that are happening which have been partly contributed to by their very narrative in the lead-up to the 2013 election.

Last week's reports that capital expenditure will fall by 25 per cent in the 2015-16 budget to what they had previously expected is and should be of real concern to people around Australia. It means that there will be about, perhaps just a little over, $30 billion less expended by private enterprise in capital expenditure across the country—and $30 billion means a lot of work and a lot of jobs. It also means a huge stimulus to the economy. We saw in the March quarter that spending on equipment and buildings fell by 4.4 per cent and I understand that was the steepest fall since the global financial crisis. Capital expenditure by the private sector is a major driver of economic growth and economic activity. Those figures should be, and I am sure are, of concern to people around the country.

Financial analysts have also reported falling consumer confidence, and there are several reports that point to that. I noted that in question time today the government tried to rebut those perceptions with a series of questions. Simultaneously, I also noted that in his budget address the Treasurer said that the measures we are dealing with in this legislation were intended to boost growth and create jobs, in other words to stimulate the economy. Why would you need to do that if the government was not concerned about the state of the economy at the time? My own interaction with small business in my electorate, and in fact outside of my electorate, confirms the reports and perceptions that the small business sector in this country is doing it tough, and that they are very concerned about the future of our economy.

I note that household savings are still at historically high levels. My view is that household savings reflect consumer confidence concerns, because, when people are concerned about the future, they do not spend but put their money away to save or pay off debt. That was understandable during the global financial crisis years, and I do not believe there is anything wrong with doing that, but it is not understandable that it is happening now. Indeed it sends out the wrong message. I suggest to government members that consumer savings are at the levels they are is because the people of Australia continue to have concerns about the future of our economy.

The government has direct responsibility for the loss of consumer confidence. It has responsibility for that because of the actions and the policies it implements each and every year when it hands down its budget. In its first budget we saw $3.8 billion of tax assistance cut from micro and small business. Then we had another $845 million cut in industry assistance programs. These were meaningful programs that were helping businesses across Australia. They were programs like Enterprise Connect and Commercialisation Australia. That is only one part of the picture.

The cuts to social spending equally impact on the economy in Australia. Cuts were either made or proposed in the budgets of both last year and this year that included: $2.5 billion of cuts by changing the assets test threshold and taper rate for pensioners; $48 a week cuts to 22- to 24-year-olds who are unemployed by transferring them from Newstart to Youth Allowance; $21,000 loss to families with two kids on $65,000 a year over four years as a result of other social cuts and tax measures that the government wants to introduce; $11,500 cuts to some 80,000 people across Australia who will lose paid parental leave as a result of proposed changes by the Abbott government. In addition to that we saw the $500 million cuts to Indigenous programs across the country and, worst of all, the $80 billion worth of cuts to health and education spending.

All of those cuts directly translate to job cuts. All of those cuts have an impact on communities right around the country. All of those cuts directly mean cuts to the income of businesses around the country, because that money would have been spent in one way or another, which has a flow-on effect to all of the small businesses in this country. Indeed the cuts not only impact on businesses but also impact on jobs which, in turn, mean that the consumer spending power of people in this country has been diminished. You do not have to be an Einstein and you do not have to be an economist to work out that, when you make those kinds of cuts, you will affect the income of people right across the country. That is exactly what is happening as a result of the policies of this government, which are affecting consumer confidence, which, in turn, means money is not being spent or has been cut by government, and that, in turn, means it does not flow on to the small businesses of this country.

The Abbott government policies go much further than that, and they are also effectively responsible for the collapse of the auto manufacturing industry in this country. The effects of losing car making in this country are already being felt around the nation, and they are particularly being felt in my home state of South Australia where jobs are already being lost. When I went to some of the small businesses in the very precinct of GMH they told me how they are struggling. Many of them are now looking to the next year or two with a view to closing down the business because they believe that they will no longer be able to continue to be viable once GMH closes. These are not auto component companies that I am talking about, these are ordinary small businesses dealing with a whole range of other matters such as in the food industry and so on. They can see that their business will be directly impacted by the collapse of the car industry in South Australia.

We had a debate only yesterday in respect of the renewable energy target. We saw investments in renewable energy in this country dive by 88 per cent. Some 21,000 jobs were in that industry at its peak. When you have that kind of investment slump, that directly means that jobs will be lost. I made reference to that in my contribution to the debate on the renewable energy target when I talked about local businesses in my own electorate that either had to shed jobs, or are likely to, as a result of the uncertainty that this government created with respect to the renewable energy target.

I have not even touched on the naval shipbuilding problems nor on the hundreds of jobs that have already been lost with respect to that sector. In South Australia we also had the uncertainty created by this government by not committing to build the 12 submarines in South Australia, as it promised to do prior to the election, and the uncertainty that that has caused, particularly at the Australian Submarine Corporation and the many support industries that are associated with naval shipbuilding in South Australia. Again, the impacts flow on to not just shipbuilders but all of the other businesses that depend on a strong economy.

There have been huge job losses across all sectors, and we see that unemployment in this country is rising. If unemployment rises again, consumer confidence falls, because if unemployment rises people do not have the spending power. If they cannot spend money because they do not have it that directly impacts on small business across the country. To most small businesses I know of, the most important thing that affects their future and that matters to them is to ensure that we have a strong economy.

The tax cuts and the accelerated depreciation do help support small business, but they only help if a business is making a profit or if a business has money to spend. I note that the accelerated depreciation provisions only apply for two years, unlike Labor's policies, which were ongoing. I hope that this government considers continuing them, but it is clear that in limiting the policy to only two years it is a policy that has been brought in to rebuild the political stocks of the Prime Minister and the Treasurer, and that is its prime purpose. It is little wonder that people do not trust this government. Labor does support these measures, because Labor understands and values the contribution that small business makes to our nation, and we want to provide them with help whenever we can and in any way we can.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

It does not matter whether you are Inn Style Mensland, in Hervey Bay, or are the IGA at River Heads; whether you are Hartel Electrical or you are the Booyal service station; whether you are Bundaberg Sandblasting or you are the little shop down at Woodgate—the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 is the bill for you. It is certainly not the bill on the other side of the House.

This is the bill that supports you and support yours business. As someone who has grown a business from the back of my ute, I recognise that every great venture starts with an idea. Even the world's most successful large companies have come from humble beginnings. Small business is the economic lifeblood of regional communities like mine, and the coalition government wants to see them prosper. There are some 8,600 small businesses in the Hinkler electorate, operating across a range of sectors, including construction and manufacturing. Many are family businesses run by mums and dads, aunts, uncles and siblings. I know that many employees who are not related often become family. They work long hours, take few holidays and sometimes wear enormous risk to provide important services and products to our community. Across the country, small businesses employ more than four million people. In Queensland, they are responsible for over 90 per cent of all employment. We are working to give businesses the confidence they need to invest and employ, because it is the private sector, not the government, that creates jobs. What fantastic news we had today on the growth numbers for the quarter: at 0.9 per cent, our budget and the measures of this government are working to support the economy and businesses in Australia.

From 1 July this year, all small companies with an annual turnover of less than $2 million will have their tax rate lowered. That is right: it will be lowered from 30 per cent to 28.5 per cent. This is the lowest small business company tax rate in almost 50 years. Most small businesses are not run as companies though, so we will also provide an annual five per cent tax discount of up to $1,000 a year for the unincorporated businesses. Small businesses can now claim an immediate tax deduction for each and every item they purchase up to $20,000. Every item purchased since 7.30 on Tuesday 12 May, when the budget was released, can be instantly written-off to reduce your tax liability.

This measure alone will benefit 96 per cent of Australian businesses—more than two million of them. If you run a cafe, you might buy new kitchen equipment or new tables and chairs. If you are tradie, you might buy new tools or a computer for the home office. Cars and vans, kitchens or machinery—anything under $20,000 is 100 per cent tax-deductible. But I would advise you to get specialist taxation advice. We are abolishing the fringe benefits tax on portable electronic devices used for work, like mobile phones, laptops and tablets, and farmers will get an immediate tax deduction for new investment in water facilities and will be able to fully deduct the cost of new fencing from their tax bill. Silos and storage will be brought down to a three-year depreciation rate. Can you imagine just what this does for the small business and the small farmer? They will be able to go and invest in things that help to drought-proof them. Hopefully, they will purchase that equipment from local producers and local manufacturers. That will create jobs. That will create employment. It will give them work. It is of great benefit to the nation and I am very pleased that it is there.

However, in the brief contribution that I intend to make, I would like to talk about what local Hinkler businesses think of the budget and the measures for small business. Debranette, at Take Time Out for Yourself, in the small town of Howard, a little township in the middle of my electorate, said she was very happy with the budget measures for small business. They allow her to buy new equipment that needs to be replaced right now. Mark and Cara St Ledger, who own The Tuckerbox, a famous source of food and sustenance at Sugarland Shopping Centre, wish it had been brought in two weeks earlier, because then they could have used it to put in the new deep fryer that they had to purchase when the old one broke down. Unfortunately, they have missed out, but they will have more opportunities in the future. Bill Trevor, a farmer from Childers, said he is very happy. It allows people to upgrade equipment, which has been very difficult because of the drought and the low returns in farming at the moment. It is a great opportunity for the people in my electorate, and it is an absolute pleasure to be here to speak in support of this bill.

The government are getting on with the job. We are building a stronger economy and a stronger future for this country. Small businesses are the backbone of the nation, and they will drag us forward. They are the ones that employ. We know that, and I am sure they will do a great job.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

With all these speeches about the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and how wonderful it is, I thought there must be something here that I do not see. The average difference is about $2,000 to the average small businessman. I am sure they are out there celebrating and breaking out champagne bottles on the $2,000 that is involved here! Most small businesses that I know of in North Queensland do not have much profit, so they would not be paying much tax to start with.

The speaker before last said that it is about jobs, and that we live in a country that has now run straight into a brick wall. People like me have been yelling and screaming, but nobody is listening. The government is telling everybody that they are going to have this big, huge development in North Queensland. I hate to tell them but they have only got about 15 or 18 months of their term in office to go, and I do not think any dams are going to get built in the next 15 months. So what exactly are they talking about and doing here?

I never bothered to go to any of the white paper meetings because the green paper comes out after the white paper, and I am told they will then have a blueprint. I think we will all be colourblind by the time we are finished, having had all these papers, and there will be many giant forests felled to fill all the paperwork. I can honestly say that I do not think there has been a single report done in this place that has been read entirely by one person. I always felt a bit weird because I would not be game to admit in public to reading some of the reports that I have read, and I suppose I should not have done it now.

We have been given some concessions for spending money on farming. The sugar industry will not be taking it up, and I was very surprised to hear the member for Bundaberg say that he had farmers that were taking it up. There would be no farmers in my area that would be spending money on new plant. They could not afford to take the risk. They would be very foolish people indeed because they are battling on the margins now. In the cattle industry we are battling well below the margins.

I do not want to criticise the government, because we will be putting these propositions up to government shortly. We have a thousand cattle stations in North Queensland. If the government had taken a different approach and if they had said that each of those cattle stations could now have 200 hectares of untrammelled, unfettered, unrestricted land, freehold title with irrigation rights, then, quite frankly, droughts would be over for us because in a time of drought, instead of fattening cattle on that 200 hectares, you green-chop. You cut the grass and put it in a trough. In that way, you can run not five beasts to a hectare but 15 beasts to a hectare. You can bring 1,500 or 2½ thousand breeders through the drought by use of the green-chopping arrangement.

A very famous North Queenslander, Freddie Tritt, and I spent a pleasant afternoon in the Richmond Hotel and we worked out that over 80 per cent of the stations in North Queensland have a river or creek that runs every year. There is an odd year—one in 25 years—in which some of these rivers and creeks may not run. It might be two years in 30 sometimes. But, basically, it is a fair call to say that every one of those stations is on a river or creek that runs every year. That means that every year they can put in some big flood lifter pumps—like the cotton farmers do—to lift water out of the river and utilise it.

It is quite staggering to contemplate that Cape York Peninsula is bigger than Victoria. When you are talking about creating opportunities for small business, all of our small businesses are in towns that are dying. Cape York Peninsula has nearly three times the rainfall of Victoria. Victoria has four million head of cattle. We have 140,000 head of cattle. There are two problems. One is that we are not allowed to use the water. The other is that heaven only knows what process of logic could have seen government arrive at not giving us the water. The Goss government, when the last Country Party government fell back in 1990, told us it could not make any decisions till it did a proper assessment, and it spent $24 million doing proper assessments. Then the LNP came in. They could not make any decisions until they did a proper assessment. They spent another $20 million. Then Mr Beattie came in, and he could make no decisions till he made proper assessments. Each of them got out white papers and pink papers and blueprints and everything else, but $126 million has been spent.

Opposition Members:

Opposition members interjecting—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Acting Speaker, I do not mind people speaking, but I do not like them shouting. Could you shut him up?

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order!

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

My mummy told me it was rude to speak while somebody else was speaking. But obviously their mummy brought them up differently.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

I remember you interjecting on me once.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I love interjections. Please, be my guest.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order! The member will be heard in silence.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

In North Queensland we turn off only one ox out of six that we carry. In the rest of Australia they turn off four out of six. With irrigation, we can move to four out of six. That means the number of cattle being produced in North Queensland will double and treble.

Opposition members interjecting—

Maybe I should shut up and listen to them.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

You would learn something, Bob.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order! The member will be heard in silence. Please continue.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I doubt that. I would be very careful about accepting that proposition, I can tell you. Regarding overcoming the massive consequences of drought, each drought that we have sets our numbers back, and it takes us 10 or 12 years to build those numbers up again. You build up and then you just go down, and you do not get back up. It is a continuous loss and bleeding away of the cattle herd. If we move up to where we should be, running an extra four million head of cattle, and if we are turning off four out of six, the same as the rest of Australia, instead of one in six, the benefit for Australia will be $8,000 million a year. I do not regard a farmer as any different from a small business, and if all of those hundreds of small businesses are running at a dramatic profit, the little towns of Georgetown and Normanton and Karumba and the mid-west will benefit. In the mid-west we have a different proposition.

Before I leave the gulf country, it is important for me to say that it was a most extraordinary decision to cut off the food supply to Indonesia. It went down similar to swallowing a porcupine with the people of Indonesia. To repair the damage, we undertook to build a super-fast, efficient highway for our beef into Indonesia. To do that, we need 30 1,200 hectare irrigation blocks, big irrigation blocks that would enable us to move a lot of cattle onto ships to go for processing overseas. They would also facilitate the building of quartering works to make into big meatworks at places, we hope, like Charters Towers, where we will have big abattoirs. All of these little towns will no longer be little towns. A town like Georgetown would become a town of 10,000 people.

Let me move onto my own home country, the mid-west plains. All of inland Queensland is beautiful rolling black-soil plains. With how we are husbanding them, that seven million hectares of beautiful Mitchell and Flinders grass plain is growing prickly acacia trees—a weed—and we have the most endangered species in Australia, the little Julia Creek dunnart. Hughenden, in my opinion, is shovel ready if the money is made available tomorrow. Our superannuation money is going into the highly inflated property market—overinflated, I would argue, at $1 million for a house in Sydney—and it is going into the share market. That is nothing more than a roulette wheel these days, but, again, it is highly inflated by $25,000 million worth of superannuation money being pumped into it each year. In the days of more enlightened government, 60 per cent of all superannuation moneys went into government securities—government bonds—where they were paid five per cent. Heaven only knows that the—Mr Deputy Speaker, I do not normally complain—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order at the table!

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I think the gentleman here are really a bit over the fence.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Yes, the member will be heard in silence.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

In a different situation, I would deal with them differently, but I am in a gentlemanly environment, so I will act in that manner.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Yes, please continue.

Honourable members interjecting—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

But I would ask, Mr Deputy Speaker, for your cooperation in impressing upon them some common, normal manners, which, as I said previously, they obviously did not pick up in the education system that they went through.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Yes, the member will be heard in silence. Please continue.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

The town of Hughenden has dropped from 4,000 people about 40 years ago to a little over 1,000 people now. We are talking about small business. All of those small businesses have collapsed, gone broke or are struggling to stay alive. Why not consider a simple contribution of some of that superannuation money with a government guarantee on the money? Heaven only knows superannuation loves water rights, but they will not put money into building a dam. So what we are saying is: we do not want a dam; we just want a few rocks in the river with some concrete poured over it to divert the water into off-stream storage, where it can be held very cheaply and then distributed. I believe that in my lifetime the towns of Hughenden and Richmond would again rise up to towns of nearly 10,000 people. Little Richmond is struggling at well below 1,000 people now.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order at the table, please.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Switching subjects to Charters Towers, we have the third biggest river in Australia, the Burdekin River, running past Charters Towers. It is a town that has lost 2,000 jobs in mining. Five of our goldmines have closed; we only have one going, and a lot of that workforce comes from Townsville. The dam on the upper Burdekin was proposed by Dr JC Bradfield back in 1929.

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

Hear, hear! A fine Australian.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I think he was truly one of the greatest of Australians. He built the Sydney Harbour Bridge. He built the underground railway system in Sydney, which is still being used today almost as it was then, which gives you some idea of the man's foresight. Dr Bradfield won the international engineering prize for the underground railway system. He built the Burrinjuck Dam, which provides the major contribution of water to the MIA, the Murrumbidgee Irrigation Area, and ensured Sydney's water supply with the other dam that he built outside of Sydney.

Dr Bradfield also built the University of Queensland, by the way, and the Story Bridge of Brisbane, but he is most famous for what he did not build, which was the Bradfield scheme. The idea was to take a little bit of the huge mass of floodwaters of North Queensland, where we get 200 and 300 inches of rain every year, put it back into Central Australia, put it into Lake Eyre and make it rain, with 30,000 megalitres of evaporation and precipitation falling over the Murray-Darling, doubling and trebling the amount of water in the Murray-Darling. For what it is worth, I read the reports and I think that he was dead right. He was a man far smarter than anyone in this place, I can assure you. His alternative was to dig a ditch from Spencer Gulf, fill Lake Eyre up with water and make it rain that way, but we would choose the revised Bradfield scheme proposals, using that water on the rolling black-soil plains—the richest soils in the world—of inland North Queensland. Bradfield stage 1 is in fact— (Time expired)

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Labor supports the proposal to let small businesses instantly write off assets worth up to $20,000, and we could not have been clearer about this.

Mr Katter interjecting—

On budget night, my colleague the shadow Treasurer, Chris Bowen, directly and firmly stated:

… of course we will support more tax support for small business.

Mr Katter interjecting—

As the government knows, tax measures, when announced—it is curious: the member for Kennedy does not seem to be following his mother's advice right now. On budget night, the shadow Treasurer announced that Labor would be supporting this package, and, as the government knows, the Australian Taxation Office administers tax laws as though they had been immediately enacted upon announcement; it ensures that parties do not somehow make use of a sudden loophole. So, had the coalition not suggested to the Australian people that there was any uncertainty over Labor's support for this package, their announcement could have had full stimulatory effect, but, because they have spent the last week since budget night scaremongering and peddling the falsehood that Labor will not pass the small business package, they are beginning to undermine the stimulatory effect of their own package. It is extraordinary that, at a time when Australians are concerned about confidence—when they are looking for certainty—this parliament has one of the major parties saying they were going to support a small business tax measure, and yet we have the other party suggesting that there is not bipartisan support. The Australian Taxation Office will administer this law as though it had been immediately enacted, and the only risk to confidence is from the Abbott government themselves. But if they want this passed quickly, passed quickly it can be.

Today we have seen absolute hypocrisy, despite the fact that last week in question time we saw Bruce Billson saying:

The only thing people are uncertain about is whether Labor are going to muck around with this. Are they going to stand in the road? Labor, you did not do anything for small business when in office.

He forgets about the instant asset write-off as he says that.

Make sure you get behind this package and secure its early, safe and certain passage.

As the Prime Minister said on Monday:

Let us pass this bill straight away.

The same challenge was handed down by the Treasurer in question time on Monday:

This legislation is going to go through the House of Representatives this week …

And then he said:

I lay down the challenge to the Labor Party: help us to get that legislation through the Senate as quickly as possible.

Yet, despite saying that they were absolutely keen for this bill to be off and racing towards the Senate, they passed up the chance to have it stamped, signed and delivered to the Senate before lunchtime today. Instead, we have the extraordinary spectacle of the Minister for Small Business, Bruce Billson, coming in here to vote against his own package going to the Senate. That is how extraordinary it is.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It's not often you see this government oppose a gag motion.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As the shadow minister at the table points out, the opposition of a gag motion by the government is itself bizarre! But, in the context of what the government has been saying about the urgency of getting this bill to the Senate, it is amazing that they were not willing to take up Labor's constructive proposal to get it there quickly. But this sort of opportunistic, short-term approach perhaps should not surprise us, given the government's approach to long-term policy making.

Superannuation taxation concessions are rising in value at a rapid rate. We know that soon they will exceed the value of the age pension, and they are of concern to the secretary of the Treasury and to every serious economist in Australia—to, indeed, the Assistant Treasurer. But the Prime Minister is still saying that he does not want to deal with superannuation tax concessions, despite having put out a tax white paper one of whose questions is whether or not our current superannuation tax concessions approach is sustainable. Let us be clear: our superannuation tax concessions are not fair and they are not sustainable. The top one per cent of Australians get more superannuation tax concessions than the bottom 40 per cent of Australians.

We have a multinational tax package from this government which is not even costed. In Senate estimates yesterday, the Minister for Finance said: 'We do not have a credible figure for it.' Senator Dastyari said: 'You have not costed it?' The Minister for Finance said: 'Well, they are your words. What we have decided is—' Senator Dastyari: 'The question is: have you costed it?' Mathias Cormann: 'Well, the answer is: we have not, because we do not have the necessary information to credibly do that.' So what we have from this government is a multinational tax package whose elements, if you add them up, come to just $30 million. Thirty million dollars is less than one-sixtieth of what Labor's carefully costed multinational tax package would raise; indeed, a package which not only raises $2 billion—

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order on relevance. The member is speaking about matters that are far away from the subject of the bill before the House this evening, and I ask you to direct him to return his remarks to the bill before the House this evening.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Please, Member for Fraser, restrict your remarks to relevance.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Thank you, Deputy Speaker, but the key question of relevance here is the impact that this will have on the Australian economy and the way in which it fits in to the decisions that the government is making. On superannuation tax concessions, their unwillingness to act has been hurting confidence in Australia in their economic skills. On multinational tax, their unwillingness to put on the table a proper package, again is deeply inadequate.

Labor supports a fair and sustainable small business package. But what concerns us is the impact that it will have on bringing down the unemployment rate. We have the unemployment rate now up to 6.2 per cent, well above where it was when Labor left office. Will this small business tax package on its own bring down the unemployment rate to below six per cent? I would like to think so, but, when you have a government which is preventing young job seekers from getting any assistance for an additional month, and when you have 769,500 Australians looking for work now, then you have to worry about whether or not this small business package will be enough to get the Australian economy going.

When he was the shadow Treasurer, Joe Hockey described the cash rate as 'at emergency levels'. The current cash rate, two per cent, is half a per cent below where it was when the Treasurer said that it was at emergency levels.

We have consumer confidence now seven per cent lower than when the coalition came to office. And consumer confidence is not helped by the government's needless fearmongering about Labor's support for this small business package. Private capital expenditure is now down 11 per cent from the last federal election. The march quarter result is the worst since the global financial crisis. Following the Abbott government's second budget, Dun and Bradstreet's business expectation index dropped seven points from 20.7 to 13.4 points.

So much for the much-promised shot of adrenaline to the economy. Instead, the chaotic mismanagement, the cabinet leaks, and the inability to deliver sensible tax reform have been like a double dose of Mogadon. This measure is one that takes a risk. That risk arises because of the sudden end to the instant asset write-off package. We know that when governments put in place time-limited measures and then take them away it can be like taking away the punch bowl just at the time when everyone needs to have a drink. We have seen this recently from the example of Japan's consumption tax. Japan attempted to stimulate their economy by cutting their consumption tax rate. Then recently—last year—they raised it from five per cent to 8 per cent. The result was to plunge the Japanese economy into recession. That is what you get with temporary measures that are not carefully thought through in terms of their long-term effect on business.

Labor supports small business because we want to create jobs in Australia. We saw this in the Leader of the Opposition's budget reply. He spoke not only about the importance of small business but offered to go further and work in a bipartisan fashion with the government on small business tax reform. We are also aware of the impact of start-ups and new businesses as a major driver of job creation. Two-thirds of Australian workers are employed by companies with fewer than 200 staff. The OECD has found that small firms younger than five years old create 42 per cent of new jobs. If we want to create good jobs by the thousands, we need to work harder at building an economic ecosystem in which innovation and entrepreneurship will flourish.

It was my pleasure to join the Leader of the Opposition at Dickson College today to meet a range of young Canberrans who are working on coding and robotics and learning the skills that they will need for the modern economy. That is why Labor is committed to expanding the opportunities for young Australians to study coding at school. We are committed to boosting the number of people studying science, technology, engineering and maths at university. Many of the young people we met today at Dickson College may well end up as Canberra entrepreneurs contributing to the innovative entrepreneurial businesses that I am so proud to see in this ideas city.

Facilities such as Entry 29 and the Australian Academy of Interactive Entertainment, which encourages gaming and the coding of computer games here in ACT, are part of building the start-up enterprises of the future. Labor has also said that to encourage more small businesses we are going to establish a $500 million Smart Investment Fund to co-invest in early stage and high potential companies. We will be partnering with venture capitalists and licensed fund managers to make those investments. We are going to ensure that this money is spent on start-ups with real potential to make it big and to create local jobs in the process.

While this budget contains measures for small business, it does not create sufficient measures for innovative businesses. There are still obstacles to crowd-sourced equity funding. There is still a lack of appropriate venture capital investment to allow enterprises to flourish. I was recently at BlueChilli in Sydney, a venture capital incubator that works with a unique model. It provides shared engineering skills to the firms there. Seeing the start-ups there gives you real hope about the potential promise of these new start-ups, if only they had a government that is willing to back innovation and entrepreneurship. In Wollongong, the University of Wollongong's iAccelerate centre provides opportunities for small businesses there to grow and innovate. One business we spoke with there is working on creating 3-D printers for use in schools. The great thing about having 3-D printers in schools is that students are able to learn coding and boost their robotic skills. At Dickson College today the students were working on robotic hands. That required both the coding skills in order to code the robotic hands, and also use of the in-house 3-D printer. These skills, which once upon a time would have been the preserve of graduate students at university, are now being engaged in by 16 and 17-year-olds such as the ones we met today.

Labor will support these bills and support them with more enthusiasm than the government. We would have had these bills passed 10 hours ago if we had had our druthers. Those opposite who are complaining about the duration of my speech would not have had to put up with it had they been willing to join us in sending this bill over to the Senate.

The Australian people also need a government that is committed to innovation and entrepreneurship, that is interested in teaching's kids to code, and that is interested in investing in science and innovation. At a time when one in five CSIRO jobs are on the chopping block, the scientific community in Australia is genuinely asking the question: is this a government that is interested in innovation and science? We know that Australia ranks too low on overall investment in science and research. Part of the challenge there is boosting not just the government effort but also the business effort as well. Labor is committed to that challenge because it answers the question of where the jobs of the future will come from. Australia needs a government committed to the future and to creating jobs in that environment. (Time expired)

Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Dr Leigh's speech was very revealing about Labor's attitude to small business. Because the member for Fraser is the shadow Assistant Treasurer he was given a 15-minute timeslot to talk about the small business package, but after approximately 4½ minutes the shadow Assistant Treasurer ran out of content and started talking about anything other than small business. In fact, most of the topic of his conversation and his speech from then on was trying to talk down the national economy. I think today the reason they tried to guillotine the debate on small business is really because they did not have anything to say. If the shadow Assistant Treasurer can only speak on small business for 4½ minutes, then presumably very few of the backbench can speak on it for much longer than that either.

On this side of the House we know that small businesses are the engine room of the economy. They contribute $330 billion towards our national economic output. They employ 4.5 million people. And we know that when small businesses are doing well we all do well—they are growing; they are thriving; they are profitable; and they are employing people and creating wealth. That is known deep in our veins on this side of the House—in part, because so many people on this side of the House have been small business owners themselves. They have run businesses; they know what private enterprise is about. I think the reason there is so little interest in small business from the Labor side of the chamber is because so very few have even worked in a small business, let alone run a small business. But most of them have been union officials, and I think that tends to guide the overall attitude to this sector.

We are very proud of this small business package. It forms the centrepiece of this year's budget. The most important measure of it was, firstly, an immediate tax cut—from 1 July—of 1.5 percentage points. That does not just apply to incorporated entities; it also applies to unincorporated businesses, who tend to form the bulk of small businesses. The second key measure in the package is a $20,000 instant asset write-off measure. This is a very significant measure. It means that any small business owner can go out there—from a week ago—purchase any asset worth up to $20,000 and immediately write that asset off against that business's tax income for the year. That has an immediate impact on cash-flow perspective for small businesses, and that means they have a greater ability to invest in other things, to employ others, to grow and to become more profitable as well. These are very important measures. It is a $5.5 billion package in totality. We think it will have an absolutely profound impact on small business growth and, therefore, on the economic growth of our nation.

The shadow Assistant Treasurer was talking down the economy throughout his speech. I would like to point out a couple of statistics for him. Today was the day the national accounts were brought down, and I would have thought that the shadow Assistant Treasurer would have referred to those national accounts, because the headline figure of those national accounts was that there was 0.9 per cent growth for the March quarter. That makes us one of the fastest-growing wealthy economies in the world. It puts us at a considerably faster growth rate than where we were in the last years of the Labor government.

Of course, everyone in this chamber knows that the jobs growth is four times higher than in the last year of the Labor government. We know that retail sales are up. We know that there are record new businesses started and we know that there are record residential housing approvals. These are all the fantastic economic green shoots in our economy. We think that this small business package will add to that and continue to support economic growth across the nation.

Labor's attitude to small business is well known—in fact, perhaps the most honest remark from the Labor Party came from their former leader Kim Beazley who, in July of 2000, acknowledged very frankly: 'We have never pretended to be a small business party.' He was exactly right. They have never been a small business party. The future minister for small business, Craig Emerson, ramped up Labor's anti-small-business rhetoric when he stated in the House of Representatives in February 2006:

Labor, as a party, was born of the trade union movement. We are proud of our bonds with the trade union movement—we say it long, we say it hard and we say it often. The Liberal Party knows its origins and so do we. We recognise our origins, and we are very proud of our bonds with the trade union movement.

I that those two quotes encapsulate it. Leader Kim Beazley says, 'We never pretend to be a small business party', and then Craig Emerson says, 'Our bonds and our roots are with the trade union movement'. That, I think, summarises the key differences between the Labor Party on that side and the Liberal and National Parties over here.

Another indication of Labor's interest in this topic—other than the shadow Assistant Treasurer only being able to speak on the topic for 4½ minutes of a 15 minute speech—is that there were six small business ministers in six years, and none of them had any small business experience. You would think if you had six in six years you could at least find one. But, no; we had: Craig Emerson, who was an economist and a Public Servant; Nick Sherry, a union official; Mark Arbib, a union official; Brendan O'Connor, a union official; Chris Bowen, a union official; and Gary Gray—guess what?—a union official. No, sorry, he was the ALP National Secretary and Executive Director and he did have some experience with Woodside. Out of six small business ministers in a row they could not find a single member on their side of the House that had any small business experience.

Mr Champion interjecting—

I have an interjection from the other side as to the current small business minister. Yes, he was an owner of a small business, with his wife. And he frequently talks about that and he brings that experience and that passion for small business to his job.

Of course, now that Labor is in opposition nothing has changed. The opposition spokesperson for small business was the national secretary of the AWU. Bernie Ripoll is the shadow minister assisting the minister for small business and he was a union organiser for the State Public Services Federation of Queensland. So that almost brings it up to eight in a row where we have not had a single small business person who can fill that spot on the Labor benches. Surely, there must be one person who has had some small business experience on that side of the House.