John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer advise the House on the importance of investment and innovation in supporting Australia's transition to a more diversified economy, and is the Treasurer aware of any threats to our transitioning economy and Australia's economic growth?

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Bennelong for his question. Our economy—as the Prime Minister has rightly said, and I and those on this side of the House have said—is successfully transitioning. That is recognised not just here but it is recognised around the developed world as an economy that is dealing very successfully with the global headwinds that we face. But the real champions of this process are the Australians and the Australian businesses who are making this happen every single day. It is true that our economy is growing and we are generating more jobs for every inch of growth in this transitioning economy.

More than 300,000 jobs, last year, generated the strongest jobs growth we have seen over a calendar year since 2006. Service industry capex is up 12.4 per cent. Service exports are up 8.3 per cent over the year. Financial service exports have been in double-digit growth for three years. It is not just happening in the services sector, because as our economy diversifies our traditional sectors of the economy continue to perform. The AIG Performance of Manufacturing Index was up, again, in February. It was the eighth successive month and the longest streak of consecutive improvements in that index since 2006. Our resource export volumes, as the minister for resources will know, over the past year, continue to go up and our market share, particularly in places like China, continues to grow.

We need to back-in that transition. We need to back it in with investment in that transition, particularly in terms of innovation. Our policy, when it comes to capital gains tax, is to cut capital gains tax, because we have a policy on innovation to provide a capital gains tax exemption for investors in start-ups and a 20 per cent non-refundable offset, a 10 per cent non-refundable tax offset for capital invested in new early-stage venture capital limited partnerships. We are relaxing the same business test to allow a start-up to bring in an equity partner and secure new business opportunities, and we are removing the rules that limit depreciation deductions for some intangible assets. What we are doing on tax is enabling Australian businesses to innovate and to support the transition of our economy, which the jobs of so many Australians depend.

Those opposite, their plan is to increase taxes on investment. They want to put up the capital gains tax by 50 per cent on the investment of Australians. They do not understand that taxing more to spend more is not a plan for jobs and growth, and it shows why they cannot be trusted to manage the transition that is occurring in our economy.

Ms Butler interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Griffith will cease interjecting.