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

I move:

That this House:

(1) notes that:

(a) 96 per cent of all of Australian businesses are small businesses, employing more than 4.5 million people and producing more than $330 billion of the nation's economic output;

(b) in 2013-14 Australians started more than 280,000 small businesses;

(c) the Coalition Government has developed and started to deliver as part of the budget, the largest small business package in the nation's history—the Jobs and Small Business Package—worth $5.5 billion; and

(d) as part of the Jobs and Small Business Package, all small businesses will get an immediate tax deduction for each asset they buy costing less than $20,000; and

(2) acknowledges the work of the Prime Minister, the Treasurer and the Minister for Small Business in putting together a package that will deliver for small businesses now and into the future.

I have great pleasure in moving this motion on the coalition's Growing Jobs and Small Business package today and for the House to record and note its support. Small business in this country represents 96 per cent of all businesses, employing more than 4.5 million people and producing more than $330 billion of economic output for this nation. In 2013-14, Australians started more than 280,000 small businesses. This coalition government has developed and started to deliver, as part of this budget, the largest small business package in this country's history—the Jobs and Small Business package—worth some $5.5 billion. As part of the Jobs and Small Business package all small business will get an immediate tax deduction for assets they buy costing less than $20,000 after 7.30 pm on budget night.

This motion also seeks to acknowledge the work of the Prime Minister, the Treasurer and the Minister for Small Business in putting together a package that will deliver for small business now and into the future. The coalition's Growing Jobs and Small Business package is designed to have a tremendous impact on Australia's economic climate, particularly for small businesses around the electorate of Forde, where we have approximately 11,000 small businesses.

Our government is seeking to arrest the decline in the small business environment overseen by the previous Labor government, and we have now developed and delivered the largest jobs and small business package in the nation's history. The hardworking men and women of Australian small businesses deserve a government that will provide them with the opportunities to invest, grow and prosper. We are creating a more competitive system that supports small business growth and does not hinder it. Small business owners are the have-a-go Australians who follow their dreams, take a risk and dive into the world of business. They are the people who provide services, train and employ people, and contribute to economic growth in their local communities.

There is no doubt that small business is at the forefront of Australia's jobs and growth for the future. It is the coalition government that is delivering for small business now and into the future through our growing jobs and small business package. Creating the ability for business to reinvest leads to existing output being increased but at lower cost. It also leads to new and improved ways of doing business, overall improving our nation's productivity and longer-term wealth. We want to see higher investment leading to higher employment and wages over time. And we believe the measures undertaken in this growing jobs and small business package is the first step in achieving this. Along with other package measures such as reducing the company tax rate, we will see continued assistance for small business to allow them to grow and compete more effectively with larger businesses, thereby again creating the opportunity to grow and prosper and employ Australians.

More people in work means fewer people on welfare and more money for individuals and families results in a stronger Australian economy. Helping more small businesses to become profitable and sustainable and competitive will put small business owners in this best position possible to hire new employees, provide more jobs particularly, in my electorate, not only for younger people that are struggling to find employment but also importantly for an increasing number of older workers who are looking to re-enter our workforce. From 1 July 2015 incorporated small businesses will be eligible for the 1.5 per cent company tax cut, and small incorporated business will receive a five per cent tax discount up to $1,000 further improving cash flow and building a positive economy for small business.

It is with great pleasure that I move this motion. I commend the Prime Minister and the Treasurer for their terrific work and I commend this bill to the House.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

I second the motion.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

In the last sitting week, Labor supported the government's legislation on the instant tax write-off and we were pleased to do so. There is no doubt at this time that small business does need a lift in confidence. We have seen business confidence flat line over the last year. It has now recovered to almost the level that it was prior to the last budget—but still below where it should be. We know small business has been suffering as consumer confidence has dropped as well. It is good to see this government doing something to repair the damage it has done to business and consumer confidence since it was elected over a year and half ago.

We are also pleased to see that they selected the instant tax write-off when they decided to do something about business confidence because we were against them when they cut it last year. The government members, I think, were not paying much attention when they are in opposition because in opposition the Labor government introduced an instant tax write-off at the height of the Global Financial Crisis, initially for $5,000 instant right house write-off which we increased to $6,500 on a permanent basis. It was well received by the small business sector generally. It was greatly appreciated. It was a permanent instant tax write-off that gave them an ongoing tax concession for every item they bought up to $6,500.

When the government came to power, one of the first things it did was abolish it because they did not think it was a good thing last year.

We are very pleased to see them finally recognise the error of their ways and reinstate what was a very good policy. It is unfortunate they have chosen to do it for only two years. Ours, of course, was ongoing. Theirs is for two years only; it finishes in 2017. What we expect to see then—and economists are broadly saying now that it is a bit of a hole as businesses pull their expenditure forward in order to benefit from the write-off—is a bit of a slump in 2017. That is unfortunate. It is unfortunate that the government did not see their way to reinstate the permanent, instant tax write-off that they abolished last year.

The motion also refers to the period when Labor was in government during the global financial crisis and the number of jobs in small business at the time. Again, I wonder whether members of the government, when they were in opposition, slept through the global financial crisis because we suffered the largest and deepest recession in the world economy since World War II during our time in government. I am incredibly proud of the way the Labor government supported small business at the time. You might remember, Deputy Speaker, that construction had flatlined. There were large construction companies in my electorate that had started to lay off staff; they were down to three days a week. It was the extraordinary building and stimulus package of the time which kept those businesses working during that period. There were some very good results across the board. While most economies went into recession, Australia was one of only two developed economies that did not go into recession.

It was an incredible piece of economic management in hindsight. There was an overall increase in the number of employed people from 9.5 to 10.6 million during the worst global recession the world had seen since World War II. We actually grew jobs, and we grew the number of small businesses. The total number of businesses in Australia grew. The number of people employed in medium enterprises grew by 822,000 and, in large businesses, by 757,000 workers. This, again, was quite a strong economic performance—I would say an exceptionally strong economic performance—given that we were facing the largest recession the world had seen and no other economy survived that recession the way ours did, largely because of the work of the Labor government but also some historical work done by previous governments as well.

Honourable Member:

An honourable member interjecting—

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

Of course it had something to do with the Reserve Bank. I will take that interjection. It was a result of many things. It was a result of the fact that Australia had variable rather than fixed interest on home loans, unlike the US, which had fixed rates, so drops in interest rates did not actually flow through. There were many, many things—the fact that we had the eighth lowest debt in the world and we had the first lowest debt after the global financial crisis. So we improved our debt position relative to the world. It was to do with the Hawke and Keating government, it was to do with financial regulation, it was to do with all sorts of things. It was because Australia was well-governed, but it was also because of the work that the Labor government did in stimulating the economy that supported small business through that time.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

It is good to second this important motion from the member for Forde, focusing as it does on the government's very important initiatives in the small business sector. Of course, those initiatives all have a very strong focus around productivity because ultimately, at the end of the day, the thing that drives living standards in the long run is productivity. There are other elements of the economy that ebb and flow over time—the terms of trade prices and so on, and obviously the degree to which there is participation in the economy helps to promote economic growth—but there is absolutely nothing which is more fundamental than productivity. It is one of those terms that get thrown around a little, but essentially it means the value of goods and services that we produce in a given unit of time. The more valuable the goods and services that we produce in a given amount of time the more wealth we create. The more wealth that the economy creates the higher living standards are across the board. It is absolutely fundamental to the government's economic agenda to drive productivity growth. We see in the measures in the budget a very strong focus on assisting small businesses to make their businesses as productive as possible.

As we know, the vast majority of Australian businesses are in fact small businesses. They employ many millions of Australians and they form the bedrock of local communities. Indeed, in my electorate of Banks the thriving commercial centre of Hurstville and other major centres in Mortdale and Peakhurst, and the large manufacturing centres in Padstow, really are the backbone of our local economy. Small businesses in my electorate and indeed around the country will benefit enormously from these measures.

The $20,000 instant asset write-off basically means that businesses that were putting off a decision to invest in some new productive equipment for their business are accelerating that decision—bringing it forward. Of course with businesses investing in equipment which enables them to run their business more effectively, that is the essence of productivity right there. It allows labour to produce goods and services more efficiently.

Right around my electorate we are seeing a very strong response to these initiatives. Just last week it was tremendous to have the Prime Minister at the Buzzbar Espresso in Mortdale. The owner there, Mr Matt Alderton, took us through all of the various purchases that he was going to make in his various businesses to assist in the growth of that business. As I said, it is helping to grow productivity.

It is also a very important productivity-boosting measure that under these changes businesses will be able to expend all their start-up costs immediately—accounting costs, legal costs and so on. That is important for productivity because what we want to see are more and more small businesses start. We want to see more and more businesses, especially in those high-growth areas of the economy—areas like technology and internet and so on, where I spent my career prior to coming here—those businesses which will tend, over time, to become a bigger part of the economy and be highly productive. They will be assisted by these measures. Now, rather than businesses having to absorb the cash cost of those start-up costs immediately—only being able to claim them back through tax over four or five years—they will be able to claim them back immediately. That is an important cash injection for those businesses in those often very difficult times when they are starting up and getting things off the ground.

It is also getting rid of those complex provisions about capital gains tax hitting businesses when they restructure. That is also very effective in helping businesses to move forward and to focus on building a productive enterprise rather than getting bogged down in bureaucracy and red tape.

These are tremendous initiatives and I strongly support this motion.

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

This Liberal motion is nothing more than a double-dipping dose of unwarranted self-aggrandisement and self-congratulations before any are due—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I do not know whether I should have called you now!

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

Thank you! If you listen to the government, small business and the economy are doing great. But if you actually check the facts, they tell a very different story.

Last week the Westpac–Melbourne Institute Index of Consumer Sentiment fell 6.9 per cent from 102.4 in May to 95.3 in June. That is not good news; they are not good numbers. But this is what Westpac senior economist, Matthew Hassan said:

This is a surprisingly weak result. It now appears that last month's surge of optimism was a brief 'relief rally' following the RBA's May rate cut and a Budget that was less 'damaging' than many feared.

Less damaging than many feared! He continued:

With these factors now behind us, sentiment has reverted back to a level more reflective of broader concerns about the outlook for the Australian economy. At 95.3, the Index is 1% below its pre-Budget level and the weakest read since the start of the year.

This is not good news. It was noted that consumer spending and business investment is weak. Mr Hassan went on to say:

Individual components of the index highlight these renewed concerns about the economy. By far the biggest fall in June was in the sub-index tracking expectations for 'economic conditions, next 5 years' which plunged 17%—

Under these brilliant guys here, the Liberals—

reversing all of last month's 20% jump.

He continued:

Job loss fears remain a major concern. The Westpac Melbourne Institute Unemployment Expectations Index rose 3.8% to 152.8 (recall that higher readings indicate increased expectations that unemployment will rise over the year ahead)—

not good news. Looking into the future, the long-term outlook is also not good:

Since the last Board meeting, evidence of weak consumer spending and a deteriorating outlook for business investment along with this survey result will keep the Bank alert to disappointing economic progress.

Finally Mr Hassan said:

Our current view is that rates will remain on hold throughout 2015 and 2016 while recognising that since the last Board meeting the case for even lower rates has strengthened.

This motion from the Liberal Party suggests everything for small business is just sweet, rosy and hunky-dory because of the actions of this brilliant government. This could not be further from the facts or the truth. I acknowledge that the small business measures in the budget are a positive initiative, but what is missing from the government is any acknowledgement that what they did in their first budget in cutting more than $5 billion in tax assistance measures, and their continued talk of debt and deficit disasters for pretty much the last four years, has all destroyed consumer and small business confidence to boot.

They are a strange mob, the Liberal government, because they were fantastic at talking down the economy while in opposition but, when they got to government, they forgot to stop talking down the economy. They are supposed to talk it up and actually do a good job, and they just kept talking it down, down and down further. Now the government have been in power since September 2013, coming up on two years. You would have thought that, if the actions the government were taking were good and positive for small business, you might see an improvement over time in the trend of consumer and business confidence. But have we seen that improvement? Have we seen that trend? No, we have not. It is just not happening. If anything, the long-term outlook under the Liberal government, when considered by any respected commentator, is not good by any reading of the facts.

So I say to Mr Van Manen and his good colleagues: this is your watch. You are now in government. That is the whole point of winning government: you get to implement your policies and take responsibility for what your policies actually do. We supported the government in bringing back the tax measures that were cut just 12 months ago under their previous budget. They cut the assistance to small business, and they go: 'Oh, what we have done? This is actually destroying small business.' So they are bringing back those measures again. The honourable thing for the government to do would be to acknowledge at least that they got it wrong last year when they cut the instant asset write-off—and then they reintroduced the instant asset write-off—and cut the loss carry-back for companies and accelerated depreciation for motor vehicles. What genius did it take to think of those cuts? Instead of motions that are nothing more than government propaganda about criticising Labor, they could actually do something a bit more to lift the confidence of small business. You might guess also that, when the Liberals say they are doing a good job on the economy and the budget, they would not have doubled the deficit and also added a further $35 billion in debt.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

Today I rise in support of the motion put forward by the honourable member for Forde. In my first speech, I gave a wonderful quote from Sir Winston Churchill:

Some see private enterprise as a predatory tiger to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.

Small business surely is that sturdy horse. Small business is a critical pillar of the community and an essential employer to the people of Western Sydney, Penrith and St Marys that I represent. Paul Brennan, the chairman of the Penrith Business Alliance, says: 'There are roughly 13,000 businesses in the area. The majority of these businesses are either micro or small to medium enterprises. Small business is the biggest employer in the area. It is vital to our economy and is the most ready to step up output. All our feedback reports that the reduction in tax for small business is viewed as welcome and a real shot in the arm after the impacts of the GFC, decreased consumer confidence, decreased export sales and international tourists due to the high Australian dollar.'

We need to grow small business and inspire new entrepreneurs to innovate and create business and jobs for the future—jobs like the Werrington Park Corporate Centre, part of the Sydney IQ project. This project is designed to be a major catalyst for attracting high-tech industry, global investment and state-of-the-start research. Add to this the new UWS Business Development Incubator. This project is designed to promote entrepreneurship and provide start-up businesses with cost-effective workplaces, mentoring and support for investment and growth. That is great news for new businesses in Western Sydney. But add to that the federal government's support for unincorporated small businesses, cutting their tax rate by five per cent up to $1,000 annually. This is great news for new entrepreneurs in Western Sydney, just like those coming to the UWS Business Development Incubator.

Just last week the Minister for Small Business and I visited the High Street Depot Cafe. This was its second day in business, the second day this business had opened its doors. We met Noreen and Tim. Noreen and Tim are local people but they have travelled internationally and secured their craft. They have now brought those skills back to Penrith, and with their young family they are having a go. This is what our small business package is designed for—to help young entrepreneurs to have a go and start their own business. That is why we are cutting the red tape and allowing the immediate deductions of professional services necessary for business owners like Noreen and Tim to open their doors.

One of our hallmark measures is the accelerated depreciation program, allowing businesses to immediately write off up to $20,000. Local business owner, Brett McVea, from National Locksmiths, spoke about the new capital equipment he has purchased for his business. He says:

This equipment keeps us in the market place, keeps our income and keeps the boys employed. It allows us to build the business. We can grow and have grown because we have the technology to grow. It's a fantastic initiative and well done to the government for considering small business—backbone of the economy.

Well said, Brett. Deputy Speaker, incentives to unshackle small business do not stop there. We have lowered the small business company tax rate to 28½ per cent—a 1.5 per cent tax cut for businesses with an annual turnover of up to $2 million. Jim Hill from Nepean Solar agrees. He says:

In regards to the reduced corporate taxes—having the reduced tax payable coupled with the instant tax write off will definitely stimulate the industry, in particular small business. It gives companies like myself the chance to grow and make a profit.

Overall, it's a fantastic initiative and stimulus for small business.

Gina Field, the owner of Nepean Regional Security and the President of the Penrith Valley Chamber of Commerce, states:

As the Prime Minister said recently in Parliament, small business is the locomotive of the Australian economy. Whether large, medium, small, micro sized or home based, business owners all have the same wants and needs, to remain viable, have business growth and to employ more people.

We are enthused and encourage by any Government that can give business owners tax breaks and advantages to allow us to confidently continue to do this.

This is also reinforced by the Penrith Valley BEC. My community supports these measures.

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

I rise today in support of small businesses right across the country who have been doing it tough since this government was elected. That is why I find it absolutely galling that those opposite can claim to be the best friend of businesses when, as my colleagues have discussed today, business confidence has fallen over the course of this government, consumer confidence has fallen over the course of this government and unemployment has risen. That has had a huge impact on small businesses.

A particular case is what has happened in my electorate of Canberra, which has been devastated, once again, by a coalition government. We saw it in 1996 when the Howard government came into office. What did they do to Canberra? They absolutely decimated it. It just underscores the coalition government's complete contempt for Canberra and their complete contempt for public servants, the servants of democracy that serve this government and that served the government then.

What happened to Canberra in 1996? We saw 30,000 public servants right across the country lose their jobs. We saw 15,000 public servants here in Canberra lose their jobs. That had a huge knock-on effect on the local economy and also the capital regional economy. Business bankruptcies went up. Businesses closed down. Local shops closed down. People left town. We saw a reduction in the population here in Canberra, we saw unemployment go up and we saw personal bankruptcies go up. That was 1996. Fast forward to 2013, when this government was elected. What did we see? Again, a huge whack to small businesses in this town. Coalition governments have form on having a huge negative impact on Canberra. What have we seen since this government was elected? We have seen 8,500 public servants lose their jobs.

Mr Ewen Jones interjecting—

As we saw in 1996, you cannot take 8,500 Public Service jobs away and expect to have zero effect on the economy. Since this government was elected, 8,500 Public Service jobs have gone, and we have seen small business confidence fall through the floor.

I say to the member for Herbert there, as I say to many members both on this side of the aisle and on the other side of the aisle: go to Canberra businesses and actually have a conversation with them. Do not just order dinner or a glass of wine—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Beer!

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

have a chat with your mates and then head off. Actually have a conversation with the businessperson or the person who is serving you the curry at the Jewel of India, the Peking duck at Wild Duck or the sandwich when you arrive here on Sunday afternoon.

Mr Ewen Jones interjecting—

Just have a conversation with those people, the people who are serving you and the people who own those businesses. You will hear from them that they have been doing it very tough since this government was elected. Either their profits and their business have plateaued or they have lost between 20 and 30 per cent of their business as a result of 8,500 public servants being lost.

Mr Ewen Jones interjecting—

Mr Tudge interjecting—

This is a huge impact on Canberra, on the capital region and on consumer and business confidence. Canberrans, knowing what coalition governments do to Canberra and to the Public Service when they get in, just shut their wallets or purses and stop spending. You have had a hugely negative impact on my electorate. The people of Canberra are not happy about this, and you just need to go and speak to small business owners when you are wandering around ordering your dinners or your sandwiches. Have a conversation with those people.

I have had plenty of conversations with people through my business walkarounds. I used to have my own small business before I came into this life. I know what it is like to deal with the challenges of a small business. I know the risks that you need to take and I know the challenges. I know from my conversations in business walkarounds in Fyshwick—and I just remind the Prime Minister that Fyshwick is not in the electorate of Eden-Monaro—in Woden and in Tuggeranong that they are all doing it incredibly tough as a result of what this government has done to this town and to the Public Service—the people that serve Australia's democracy and this government and prepare the government's briefs and policies. You have complete contempt for Canberra, for the Public Service and, through that, for the small businesses and micro businesses that serve this town, this community and this region.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

For those observing the debate, I did not intervene in the robust discussion, because the member for Canberra can well look after herself.

Debate adjourned.