Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

Labor will be supporting this Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018, and I foreshadow that I will move a second reading amendment later during my comments.

The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 extends for another year a measure first introduced in the 2015 budget which allows small businesses to deduct immediately purchases of assets they start to use, or install ready for use, that cost less than $20,000. The measure applies to businesses with a turnover of up to $10 million. Over the forward estimates, the measure will cost $350 million to the budget.

Labor supported the initial measures, which went from 12 May 2015 to 30 June 2017, and Labor supported the measure when it was extended for another year, to 30 June 2018, in last year's budget. Of course, we should all remember that the accelerated depreciation, or the ability to deduct assets, particularly in the first year of an asset's life, was originally an initiative of Labor. Labor originally recognised the value of an increased immediate deductibility threshold for small business entities. It was Labor that increased that threshold from $1,000 to $6,500 as part of a broader package of reforms contained in the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011.

Labor subsequently opposed the Abbott government's decrease in that threshold from $6,500 to $1,000, which they announced in the 2014-15 budget. We all remember that horror budget. It came in the wake of the election of the Abbott government. The then Leader of the Opposition, Tony Abbott, said there would be 'no cuts to health, no cuts to education, no cuts to the ABC or SBS', and then proceeded in the first budget to do exactly that. They undertook massive cuts to health, education and, of course, the ABC. And they're doing that again. We learned what they really think about the ABC on the weekend, when the federal conference of the Liberal Party voted to privatise Australia's national broadcaster. Nonetheless, I digress.

When the Abbott government did reduce that threshold from $6,500 to $1,000, making it more difficult for small businesses to use the ability to write off those assets, it was Labor that actually opposed it. For that measure, it was Labor that was standing up for small business in the wake of this government attempting to make things more difficult for small businesses in this country by reducing that threshold from $6,500 to $1,000 dollars.

But then we saw the government change its tune. Thanks to the good lobbying of the Labor Party, and indeed many in the community, in the 2015 budget they changed their tune. Labor has supported the government's measures since that time. We all know that these types of measures provide tangible benefits to businesses and their investment plans. Many Australian businesses, operators and their advocacy groups, the peak bodies, have actually indicated that these types of measures are more effective and have broader support than the proposed company tax cuts that the government is looking to get through the parliament. That is because these provide tangible and real benefits that are immediate to a small business.

We all know that the great benefits of the company tax cuts flow to foreigners compared to Australians, because of the operation of dividend imputation. The real beneficiaries of the company tax cuts, which the government is proposing will take $80 billion out of the budget—and bear in mind that the government is cutting funding to hospitals, schools, TAFE, the ABC and other organisations—will be overseas investors, because they're not affected by dividend imputation.

Labor has proposed a very different option to what the government is proposing in terms of relief for small businesses in particular. We have said we will support the government's tax cuts for small businesses up to a threshold of $2 million. But we won't proceed with the corporate tax cut that the government is proposing, the $80 billion corporate tax cut, which applies to all businesses, including the big mining companies and, indeed, the big four banks, who have done such a wonderful job in representing the interests of their customers and acting in their best interests over the course of the last decade! But Labor has come up with an alternative, which is based on our consultations with the small business community and their requests for relief, and we're calling it the Australian investment guarantee. This will allow all businesses to immediately write off 20 per cent of all new investments in tangible and intangible assets in the first year. The balance is then depreciated in line with normal depreciation schedules for the rest of the period in the life of that particular item. It's a real boost to the cashflow of small businesses, helping improve the prospects of the marginal projects that may otherwise be struggling to get up.

Our investment guarantee is an accelerator for small business growth in Australia, driving new investment in essential plant, machinery and equipment. It is also a measure to help the development of knowledge assets supportive of new investments in our economy which embody innovation and human capital. From firms expanding the capacity of their factories in outer metropolitan areas to farmers wanting to buy the most sophisticated trucks and machinery in regional areas and advanced manufacturers wanting to upgrade their computerised technology in Australian cities, Labor's policy supports all of those businesses and provides them with instant relief and instant encouragement for investment in small pieces of machinery and capital.

Let us also be clear that our support for this measure does not in any way influence Labor's position on the government's company tax cuts. As I said earlier, we remain opposed to the government's proposed corporate tax cuts for the big end of town. Unlike the government's company tax plan, Labor's Australian investment guarantee will provide targeted tax relief for businesses that invest in Australia and in Australians. It's part of our economic plan for our nation, which includes properly funding schools, universities and TAFE; boosting apprenticeships; building a better NBN; and investing in job-creating infrastructure. Our responsible economic plan will grow the economy, create jobs and improve the budget bottom line.

I want to detail for the House some examples of businesses that would benefit from Labor's investment guarantee. A food manufacturer operating in regional Australia may be looking to spend $6 million upgrading to new energy-efficient freezers to ensure it can store its growing stock of food. Labor's Australian investment guarantee would help deliver the investment because it would deliver an immediate cashflow of $1.2 million to the manufacturer. That money could then be used to hire new employees and continue their business development and expansion plan in key markets in the Asia-Pacific region. As part of Labor's measure, the food manufacturer gets both the benefit of the instant cashflow through the write-off and the improved energy efficiencies from the new freezer equipment. More efficient equipment can help to reduce the carbon emission intensity of the production processes and, of course, produce significant savings in energy costs each year.

Labor's Australian investment guarantee would significantly boost business investment in energy-saving projects, lowering energy bills, cutting carbon pollution and growing jobs. While the Turnbull government tries to talk up their commitment to improving energy productivity, the fact is that Australia's performance has been dismal in recent years in this area. We only need to look at the latest report card on national energy productivity, where it's revealed that energy productivity growth has fallen from a long-term average of 1.7 per cent per year to just 0.4 per cent in the last year. This poor performance puts a break on business and jobs growth. It also amplifies the effect of energy price hikes under the Turnbull government and makes cutting industrial carbon pollution harder.

The case for backing Labor's Australian investment guarantee is clear. Along with energy efficiency benefits, recent modelling by the University of Victoria shows that, compared to straight-out company tax cuts, an investment concession like Labor's investment guarantee can produce up to three times more effective stimulus to investment. And Labor's plan is permanent. The Australian investment guarantee won't be subject to annual budget cycles like the government's instant asset write-off and like this particular bill here. This is the reason we need to update this once again; it's reviewed every year by the government. Labor's investment guarantee, if we are elected at the next election, will be permanent. Of course, the government's corporate tax cut does not guarantee any new investment on each dollar spent. It's a clear contrast to what Labor is proposing. The corporate tax cut can go directly to paying for share buybacks or dividend increases here and offshore, and not to new investment. Labor's plan guarantees that the government is supporting investment in Australian businesses, and we all know that there's been underwhelming performance when it comes to business investment in this country.

There's broad support for the measure that Labor is proposing. The Australian Chamber of Commerce and Industry in its prebudget submission called for more incentives exactly like the one that Labor is proposing, specifically arguing:

… the government should adopt the Opposition's proposed enhancements to accelerated depreciation.

That's from the Australian Chamber of Commerce and Industry. James Pearson, the CEO of the Australian Chamber of Commerce and Industry, said:

Business welcomes this commitment from the Opposition—it's good policy … What's particularly positive is the proposal to make this a permanent feature.

This is important as policy certainty and policy consistency is critical for business.

Innes Willox, the AIG chief executive, said:

The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments.

The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.

As a measure designed to lift investment, the Investment Guarantee would increase the stock of invested capital, boost the quantity of capital per worker, raise productivity and underwrite an acceleration of real wage growth.

The Energy Efficiency Council said:

A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills …

Ken Morrison from the Property Council of Australia said:

… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment … We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.

Finally, Peter Strong from COSBOA, the small business advocacy group in Australia, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.

So there's the voice of industry. That's what small business representatives, medium business representatives, bigger business representatives and the peak industry bodies in this country are saying about Labor's proposed Australian investment guarantee. It's clear that the investment guarantee really is about jobs, growth and rewarding businesses that make new investments in Australia.

While our plan guarantees that new investments in Australia are made in Australia, the Liberals' $65 billion tax handout will only guarantee windfall profits and windfall advantages for foreign shareholders and bigger executive bonuses. Labor's tax relief is targeted and affordable, and it works. That's why I move the following second reading amendment:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that unlike the Government's company tax cut plan, the Opposition's Australian Investment Guarantee will provide targeted tax relief for businesses that invest in Australia and Australians, and guarantees new investment".

I commend that second reading amendment to the House.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

I second the amendment.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Isaacs. The original question was that this bill be now read a second time. To this the honourable member for Kingsford Smith has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

Wasn't that speech from the member for Kingsford Smith a typical Labor speech? Of course, there were some wonderful lies in there—typical Labor lies—suggesting that the government is cutting funding for hospitals and schools when they know full well hospital and school funding are at record highs under the Turnbull government. But that won't hold them back. They shall lie, because Labor tells lies very well.

Something else Labor does well is raise taxes. Despite the member for Kingsford Smith's long speech about their—as they call it—alternative economic plan, the Australian public know full well that the Labor Party has a plan for an additional $200 billion of new taxes. I want to say to every mum and dad out there: vote Labor and you will be poorer. Vote Labor and you will have less money in your pocket. They know that if they are owners of homes they will have to pay more, and they know that they will be able to save less.

As for retirees, they are absolutely in the sights of the Labor Party. They have a model—as we worked out this week—and they have totally botched it; it's a $10 billion black hole. But the Labor Party are absolutely going hard after retirees, because they love taxing. They love to tax. This is why I'm so happy today, because I sensed in the member for Kingsford Smith's speech that they actually support at least instant asset write-offs, accelerated depreciation. That's good news. It's a hallelujah moment. The Labor Party has had a come-to-Jesus on this one. They have realised that we actually can reduce the impact on business, and we can help businesses out. We need to capitalise on that and move forward. It's once in a lifetime that we see the Labor Party actually wanting to help small and medium businesses.

So I am happy to rise today to support the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. I do so with my electorate of Fairfax sitting smack-bang in the middle of one of the fastest-growing regions in Australia. I constantly hear two things from small businesses in my electorate. No. 1 is that they want to keep creating jobs for Australians. No. 2 is that they want to see government continue to support small business. Indeed, this is what the Turnbull government is doing. We know we are delivering for small businesses, because we have seen more than 1,000 jobs being created every single day. That's over one million jobs created since the coalition was elected in 2013.

The Turnbull government is supporting Australian businesses to capitalise on an economy that is now in its 27th year of consecutive growth. We are supporting Australian businesses to grow and to capitalise on growth beyond our own borders, with global growth now at its fastest in six years. There's a reason the Australian economy's GDP growth is looking so strong, why the last quarter of national accounts showed a one per cent increase in our GDP, why we're now looking at a 12-month improvement of 3.1 per cent. It is because this Turnbull government wants to empower and is empowering small and medium businesses, and all businesses alike. It is fundamental in our DNA to empower people to achieve their best. That is precisely what we are doing with our tax regime. That is why we are supporting tax cuts for businesses. It is why we have already delivered tax cuts for small business and it is why we are also cutting bureaucracy to make their lives easier. In fact, the latest regulatory reform report shows the bureaucratic burden on business was cut by more than $800 million a year between 1 January 2016 and 30 June 2017.

We know that this bill before us today is a popular one. I believe that, despite the comments from the member for Kingsford Smith, it has widespread support among people in this chamber.

It also has extensive support from business and industry. That's because it's good policy. We know good policy when it works, and this policy has been proven to work. Extending the $20,000 instant asset write-off to 30 June 2019 supports small businesses to invest in their own core assets. This extension is for all small business entities, even those who have previously opted out of the accelerated depreciation rules. As for assets over $20,000, these can continue to be pooled and depreciated at a 15 per cent rate in the first year and 30 per cent each subsequent year.

Our accelerated depreciation measure, coupled with the Turnbull government's 2017 initiative to change the threshold that defines a small business from a turnover of $2 million up to a turnover of $10 million, is having a broad and positive impact on the small business sector right across the Australian economy. In my region of the Sunshine Coast, in Queensland, more than 5½ thousand small businesses have already taken advantage of the instant asset write-off. That is, 5½ thousand businesses have already used this measure, and what they're seeing as a result is more money put in their pockets. What they are typically doing with that money is investing in their business and employing more locals on the Sunshine Coast. It is giving them confidence to invest and grow. It is giving them the confidence they need to create more jobs. As early as March this year, more than it 12,700 new jobs had already been secured by Sunshine Coast residents. This number would have no doubt doubled by now, as we're heading towards the end of June.

These are real, tangible outcomes resulting from a highly practical set of measures adopted by this government to help small businesses grow and be successful. As sure as night follows day, it also leads to the employment of more Australians. I know this because I used to own and run my own small business. While I'm no longer in business myself, I speak regularly with business owners right across the Sunshine Coast, and they're singing praises for this measure.

I have been fortunate enough to have visits to my electorate of Fairfax recently from the Hon. Craig Laundy, Minister for Small and Family Business, the Workplace and Deregulation, and Senator Zed Seselja, the Assistant Minister for Science, Jobs and Innovation, and last year from the Hon. Michael McCormack in his then capacity as the Minister for Small Business. These visits allowed me to introduce the ministers to many small-business owners and visit their workplaces, like the printing business in Maroochydore that employs 10 locals. The instant asset write-off tax concession helped them purchase a new finishing machine for their printing press. Also, the self-employed photographer who purchased a much-needed drone to expand his business into aerial photography. These are just two simple examples of the Sunshine Coast's 40,000 small businesses investing into their businesses because of measures such as the instant asset write-off.

Those around the chamber may not know that the business environment is quite unique on the Sunshine Coast. In fact, according to the Chief Economist of Australia, the Sunshine Coast is one of Australia's only non-urban regions fostering innovative entrepreneurship, comprising a unique clustering of R&D expenditure, IP generation and entrepreneurship attributes. That may have something to do with our burgeoning medicinal cannabis industry, or maybe even our 13 craft breweries. I'll admit I felt a warm glow at budget time, when the Turnbull government took the popular decision to lower the keg tax for craft breweries while increasing the alcohol excise refund cap to $100,000. Even though some have joked about the keg tax, these measures are producing tangible outcomes—delivering for small businesses, increasing their production, helping them invest in quality improvements, and, more than anything, helping them hire more staff.

We know that small businesses are vulnerable to sudden adverse business conditions. They can put a strain particularly on a company's cash flow, and the smaller a business is, the more that strain on cash flow hurts. That is precisely why incentive measures such as the instant asset write-off are so important. Further, and quite deliberately, it is the temporary nature of the measure through to 30 June 2019 that the government hopes will encourage small businesses to bring their capital investments forward to help feed business confidence and drive economic activity at the local level. Continuing the support for immediate deductibility for businesses with an annual turnover of less than $10 million by allowing an instant deduction in the year the cost was incurred for depreciating assets of less than $20,000, while also offering the potential to leverage a small business asset pool for other depreciating assets that cost $20,000 or more, is excellent news. It's excellent news for the more than 3.3 million small-business owners across the country and the 40,000 small businesses on the Sunshine Coast. It's for those reasons that I'm more than happy to commend the bill to the House.

Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Link to this | Hansard source

I'm actually really pleased to be getting up to speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. Labor will support this bill, although we have moved a second reading amendment. The bill will extend for another year a measure, first introduced in the 2015 budget, that allows small businesses to immediately deduct purchases of assets that cost less than $20,000 that they start to use or install ready for use. Over the forward estimates, the measure will cost $350 million.

Having listened to the previous speaker claim that the Labor opposition had had some sort of epiphany in supporting this, I'd just like to correct the record a little. It's a good reminder that it was Labor in government that originally recognised the value of an increased immediate deductibility threshold for small business entities, and we increased the threshold from $1,000 to $6,500 as part of a broad package of tax reforms contained in the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011. That change was permanent. It was a permanent change in the tax law that allowed businesses to plan ahead on the assumption that, in any year, if they bought a piece of equipment, they would be able to have an instant write-off of $6½ thousand.

We opposed the Abbott government's decrease in the threshold—the effective abolishing of that change—from $6,500 back to $1,000 announced in the 2014 budget. We introduced the instant tax write-off; the Abbott government abolished it again in 2014-15. But then, a year later in 2015, the Abbott government decided to re-introduce it on a temporary basis until 2017, and we supported that. It was increased to $20,000 at that stage, but it was a temporary measure for two years. We supported it again when the government decided to extend it for another year to 2018 in last year's budget, and we support it again now.

However, we don't have the same admiration for the temporary nature of these kinds of tax laws. It's incredibly important for businesses of all kinds to be able to plan ahead. When you introduce a tax law which expires in a year then you affect the way that businesses spend their money; you affect their investment decisions. They pull things around. You can see that in the forwards. You see the cost of these measures during the years of operation, and then you see a dramatic increase in the tax take the year after because businesses have pulled their spending forward in order to make the most of a temporary change in tax law. We on this side of the House prefer to introduce tax laws that are affordable and on a more permanent basis. That allows businesses to plan under their normal business cycles rather than a cycle matching a short-term tax benefit—which this government clearly prefers, because this is the third time they've done it.

The instant asset write-off is a measure that benefits small business, and that is why, as the shadow Treasurer has said, Labor will support this bill. Labor has supported and recognised the value of increasing the deductibility threshold for small business entities, because we know it is the strength and diversity of our small and medium enterprises that will determine Australia's prosperity over the next decade. We want to get right for small businesses how we best position ourselves to take advantage of the massive wave of change that will revolutionise how our businesses operate and the world in which we live.

We know small businesses will be significant drivers of future economic growth. Small businesses are often the first to recognise new technologies, apply the energy, passion and entrepreneurial skill required to grow their business and find new ways to work in an ever more connected world. Strong local small businesses support community cohesion through the family businesses and local businesses that contribute to the fabric of our community, that satisfy local need, that create relationships and support other local businesses and that contribute to our sense of place and identity. We know that these types of measures help small business with their strategic development and their investment plans, but we don't flip-flop on our support. We believe these measures should be on a permanent basis. We opposed the Abbott government's decrease in the threshold for that reason.

We've also put forward our own policy, the Australian investment guarantee, which is a permanent tax write-off. It's a little different to the way the government has structured theirs. Theirs is on equipment up to $20,000. Ours allows business to immediately write off 20 per cent of all their new investments in tangible and intangible assets in the first year, with the balance depreciated in line with normal depreciation schedules from the first year. So there are two options on the table here: the government's temporary instant tax write-off on equipment up to $20,000; and Labor's Australian investment guarantee, which I believe is a superior plan and is a permanent one that allows businesses to immediately write off 20 per cent of all of their new investments in tangible and intangible assets in the first year.

It's worth looking at the problem that our approach solves. The economy is not delivering for middle-class and working Australians. Growth is below trend, wages are flatlining, more than 700,000 people are unemployed and nearly 1.1 million are looking for work. Business investment has declined by 20 per cent over the past five years, and the RBA has said non-mining business investment has been disappointingly low. This is despite a strengthening global economy. The government's only plan is a company tax handout to big business and multinationals, which doesn't guarantee any new investment or a single new job; it only guarantees a windfall to multinationals and costs the budget $65 billion over a decade. Labor believes that the Australian investment guarantee is a better way forward. Policies to grow human capital through substantial investments in education and skills, our physical capital through targeted investments in national and local infrastructure and an Australian investment guarantee that charges business investment into the future is the way to go.

We believe the Australian investment guarantee will boost investment and create new jobs, with the Australian investment guarantee providing targeted tax relief for businesses that invest in Australia and Australians. Under Labor's Australian investment guarantee, all businesses in Australia will be able to immediately deduct 20 per cent of any new eligible asset worth more than $20,000, with the balance depreciated in line with normal depreciation schedules from the first year. Assets such as tangible machinery, plant and equipment—for example, trucks and utes, but not buildings—and intangible investments such as patents and copyrights would be eligible for the immediate deduction. The Australian investment guarantee is a pro-growth, pro-jobs reform that rewards businesses for making new investments in Australia. Under Labor's Australian investment guarantee, only companies that make the decision to invest in Australia will benefit from this tax relief, while up to 60 per cent of the conservatives' company tax handouts, in contrast, go directly to foreign shareholders. So there are the two options: an Australian investment guarantee, which goes to companies that decide to invest in Australia, or the government's big business tax cut, 60 per cent of which goes directly to foreign shareholders.

Over the past five years, business investment in Australia has collapsed by 20 per cent. Despite strengthening global economic conditions, business investment in Australia has remained subdued, and we must act to change that. Our first plan was permanent, our instant tax write-off scheme back during the global financial crisis was permanent and so is the Australian investment guarantee. It's permanent into the future and that allows businesses to make big investment decisions and to plan ahead what they intend to do for the growth of their businesses, without considering the tax cycle as a factor in deciding how and when they invest.

I just want to run through what this actually looks like. Under normal depreciation rules for a piece of machinery, assuming the straight-line depreciation method, which is standard, manufacturing company A is allowed to deduct 10 per cent, or $1 million of the $10 million price, in each year over the effective 10-year life of the asset. So they spend $10 million on the equipment, their machinery, and they can deduct one million—that's the current situation—with the other $9 million, in equal proportions over the remaining nine years. But these arrangements aren't actually quite attractive enough to get the project off the ground.

Under Labor's Australian investment guarantee, the manufacturing company will be able to immediately expense 20 per cent, or $2 million, of its investment in the first year. The remaining 80 per cent of $8 million would then be depreciated over the effective life of the asset from the first year, in line with the original depreciation schedule. This means that the business would be able to write off $2.8 million in the first year of its investment instead of $1 million under existing arrangements. Again, because this plan once introduced is ongoing, business would not need to consider pulling that investment forward in order to get it into a year, as you would have to do with the government's plan.

I find it quite extraordinary that a government that talks about certainty and talks about supporting business comes back into this House three times in a row and extends this instant tax write-off for another year as if that has no effect. We all know in this place—any of us that pay attention to tax, and some of us do because tax is quite a fascinating subject—that best practice is that tax law shouldn't inadvertently affect the decisions that business makes. You shouldn't choose this investment or that investment because of the tax treatment. You shouldn't choose to spend now rather than later because of the tax treatment. In a perfect world, your tax system doesn't inadvertently change the behaviour of a business or an individual. Sometimes you do it on purpose—for example, you tax tobacco. You introduce taxes that incentivise or de-incentivise a particular behaviour. But you do that on purpose. You don't do it by mistake. I would say to this government that removing the permanent tax write-off and introducing a temporary one and then extending it for a year and then extending it another year and doing it so late in the year—I mean, we're doing it now for the next financial year—leaves businesses right up into this moment assuming that they need to spend their money now, because if they spend it next year the tax write-off will no longer exist. It really is quite extraordinary.

Again, your own figures show that you know that's the case, because the year after the tax write-off finishes your tax take suddenly increases. You know full well that what this does is pull the spending of businesses forward into another year, not because it's in the best interests of the business, but because you've introduced a short-term tax incentive that has that effect.

I would urge all businesses out there to have a very real look at our Australian investment guarantee. It gets an incredibly good response from the broader community. The Australian Chamber of Commerce and Industry in it's prebudget submission called for more incentives for businesses to invest, specifically arguing the government should adopt the opposition's proposed enhancement to accelerated depreciation. James Pearson, Australian Chamber of Commerce and Industry CEO, said:

Business welcomes this commitment from the Opposition – it's good policy. What's particularly positive is the proposal to make this a permanent feature. This is important as policy certainty and policy consistency is critical for business.

Innes Willox, Ai Group Chief Executive, said:

The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments. The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.

The Energy Efficiency Council said:

A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills …

Ken Morrison, Property Council of Australia Chief Executive, said:

… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment.

…   …   …

We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.

Peter Strong, COSBOA CEO, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.

Tanya Barden, Australian Food and Grocery Council CEO, said:

This initiative will go a long way to encouraging investment in high tech and high skilled projects to enhance efficiency and increase scale.

We are particularly supportive of the Australian Investment Guarantee's inclusiveness across the industry sector. The opportunity to use this Investment Guarantee towards energy saving projects is also very important.

There is quite an extensive list of people supportive of the Labor opposition's approach through the Australian investment guarantee. I wish for once that the government would look slightly more broadly for a view rather than just in its own caucus room. Look at what people are saying about this and support our proposals.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

On this side of the House we all know that small business is the absolute engine room of the economy. There are 2,101,607 small businesses in Australia, with over 218,152 in my home state of Western Australia. In WA, 512,000 people are employed by those small businesses.

The Turnbull government is absolutely backing small business, and we always will. We're backing business with more competitive taxes to help them invest, grow and employ more workers. As the Prime Minister has said repeatedly, jobs and growth is not just a slogan; it's actually an outcome, and more than a million Australians are now in work since this government was first elected back in 2013. It's an absolute credit, though, to the hundreds of thousands of businesses around the country who have actually taken the risk themselves. They've invested their own money, they've done the hard work, they've often mortgaged their house and, as I've said, they often don't sleep at night either. They put in a massive effort and have given so many other Australians the best of all opportunities, which is, of course, a job. Often, small businesses give Australians their first job, and their last job as well. I've seen this repeatedly in the south-west in my electorate, the transformation of someone who's been able to come off welfare and get into work.

The government is backing industry and small business particularly to invest and create jobs. It is the central plank of our stronger economy that was set out in this year's budget, and the Turnbull government is delivering on that commitment. Employment is now at a record high of over 12.5 million Australians now in work. The government has already legislated tax cuts for 3.3 million small and medium Australian businesses, employing 6.8 million workers. This is a very key part of our 10-year enterprise tax plan. We've increased the unincorporated small business tax discount rate from five per cent to eight per cent, up to a cap of $1,000. This rate will increase to 16 per cent by 2026-27.

A key and important way we've supported small business is by lifting the small business entity turnover threshold from $2 million to $10 million. This measure has helped small businesses all over Australia. Another one of the measures that we've introduced that I hear so much about when I'm out in my electorate is the $20,000 instant asset write-off that we see in this bill here; this has been extended by this bill to 30 June 2019. I talk to so many owners for whom this has been such a great benefit to their businesses.

On Saturday night, I was fortunate enough to attend the South West Small Business Awards. They're the small business awards for the South West region in my electorate. They were held in Bunbury. I want to congratulate all of the winners and to speak about some of the small businesses that are actually benefitting from the decisions we've made on tax and also this decision to extend the instant asset write-off. When I look at the winners, I see Nudge Psychological Assessment and Consulting, based in Busselton and Bunbury. It's a private practice providing psychological services in areas around educational assessment, EAP services, victims of crime counselling, workers compensation and the NDIS. It employs a number of specialist clinical psychologists. It was awarded the best business with five to 10 employees, and co-owner Melissa Harrison, an absolute powerhouse in Nudge Psychological Assessment and Consulting, was named the Business Person of the Year. What a great result, Melissa; you've done a fantastic job.

The major winner of the award for a business with zero to four employees was The Barberia of Bunbury. It is a vintage style barbershop based in Bunbury. Adam and Saylor do a fantastic job in styling and cutting hair for everyone around the region, not just those in Bunbury.

In the award category of businesses with 11 to 20 employees, Constructive PD was the winner. They are a group of passionate local people who are absolutely making their mark in what are landmark construction projects. Innovative and cutting edge, they have dedicated employees who are led very, very competently by Ian Meachem. They're working so hard to provide quality building services in Western Australia. Ian was the runner-up in the Business Person of the Year award.

One of the major awards in the South West Small Business Awards was SportsPower of Bunbury and Eaton Fair. In 1978 a group of individuals had the foresight to see an opportunity and had the courage to actually have a go. Eight independent sporting goods retailers got together and formed a co-op called Sports Star. Their idea was very simple: operating as a group offered greater advantages than trying to survive as individual retailers. This strategy was so successful that Sports Star became SportsPower in 1985. The group has continued to increase its advertising and marketing presence and has embarked on an expansion program that has seen SportsPower create a significant network that is very highly regarded.

I really want to talk about the Home Based Business Award winner, The Goodnight Nurse. It's a fantastic home-based business. The Goodnight Nurse provides expert help for babies and new mothers to get through solving sleep issues. When you talk to new mums, the thing that challenges them the most with a young baby is dealing with issues around sleep. Emma Pollard is an absolute character, and she has an international following. She's providing in-house and phone consultations, as well as running her very much sought after public workshops. She established this business in 2008. She is an absolute character; a multi-multiaward winner. From her home-based business, Emma does amazing work helping not only young babies but also toddlers with sleep and behaviour issues. What an amazing business this is. I'm very, very proud of Emma and the work that she does.

The Start-Up Business Award winner was Eco Warehouse. They are a small, family-owned business. Michael and his wife and two young boys run Eco Warehouse from Bunbury. It's an amazing and diverse business. It has been built around a zero waste lifestyle. If you're becoming aware of the issues and the challenges facing us, Eco Warehouse is the place to get help and advice.

In the tourism section of the small business awards was Holberry House of Nannup. Louise Stokes offers people a wonderful getaway. It was built in the late 1980s, but it was inspired by the classic two-storey English manor. It's very comfortable, it's country style and it's enhanced by antiques and collectables. But mostly it's Louise there. She is an amazing local entity in Nannup.

In the retail sector, I need to mention Stepping Out. Established in 1996, it's a local supplier of dancewear. These are small-business people who take the opportunity and who are really good at what they do. Nicole and her team at Stepping Out are a wonderful example of that. Nicole invested her own money, she believed so strongly in this. She has filled a fabulous niche as a leading supplier of dancewear and accessories to dancers and dance schools throughout Australia. She is based in Bunbury. They have a massive range to choose from, and they are absolutely committed to delivering high-quality service. That's what small- to medium-sized businesses do: they deliver high-quality service. I know that Sienna Deane from Stepping Out was one of the finalists in the Employee of the Year Award.

In the Industry Award for Service, 3D HR Legal, which provides special employment law services for business, were the winners. The Industry Award for Construction, Mining and Manufacturing winner was the Caravan Doctor, based out of Busselton. People can just drop off their caravans for a service, without worrying—it's a drive-through yard. So they know their market, and that's what small business does so well too. Like the Caravan Doctor, they know their market and provide what their customers need, and people keep coming back. That's what's so good about small businesses. Keip Filtration won the Aboriginal Business of the Year and the Young Business Achiever Award. Daniel Macmillan from H&H Automotive was the Employee of the Year.

I really wanted to mention all those small businesses, not just because they won awards but because these are the people who actually had the courage to invest in a business that they believed in. Often it was a brand new business and a brand new idea, and they did it so well. The process that Business South West runs in enabling the businesses as part of the application process for this Business of the Year—going through their individual businesses—actually gives them the capacity to look at their business as well as work in their business. On the night I heard so often that that process was so valuable to each one of those small businesses, because they actually stepped back and had to look at their business almost in a hands-off approach. Those businesses that come back have all really benefited, year after year. They have actually learnt so much about their business and what else they need to do to progress and grow their business and their profits. The process has been very useful.

The other thing that has also worked very, very well for them is the support they've received from Business South West. I want to thank Business South West for everything they've done for the small businesses in the whole of the south-west. Robyn Morris, as the chair of the board, and Fiona Fitzgerald and her fabulous team have offered extraordinarily valuable services. I've recommended them so often to small businesses in my part of the world, and they have been very, very much part of the success of many small businesses. They don't just provide the support; they provide the care for the employees, the family members and the businesses more generally.

The measure in this bill of defining small businesses with a turnover of up to $10 million is one of the biggest issues. It's one of the biggest things to happen to small business taxation in generations. It comes from our deep commitment, acknowledgement and understanding as a government about what small-to-medium enterprise actually is. A small business has a turnover of up to $10 million: I have quite a number of these in my electorate, and they certainly appreciate the opportunity from what's in this bill. Allowing businesses to grow by extending the $20,000 instant asset write-off for a further 12 months will have impacts for businesses of up to $10 million. They can repeatedly buy eligible assets costing less than $20,000 that were first used or install-ready for another year to 30 June 2019. This really matters to small business. It can be something as simple as an oven if you're in the hospitality sector. In my electorate I have many of these types of businesses, as well as those in the small manufacturing and construction space. Each $20,000 matters and each new piece of equipment gives them the opportunity to grow their business and employ more people in my part of the world. I want to see more and more small to medium enterprises now—because they can as a result of this legislation—take advantage of this $20,000 instant asset write-off.

I will finish by saying a huge thank you to each of those small businesses. They are helping the government in its ambition to see over a million more people in work. That frequently comes back to the work and the efforts of people in small to medium businesses. I say thank you to each of them. Thank you for the fact that you actually had the courage to invest, to follow your passions, but to take a genuine commercial focus on your business—as we heard at the small business awards on Saturday night in Bunbury. Nudge Psychological Services said on the night that, at the end of their first full operating month, they made the princely profit of $1.40—I think that was the amount; I'm not 100 per cent sure, but it was some small amount—and grew their business from there. They persisted. That's what small businesses do, and that's why this government will continue to support their efforts.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

It sounds like the member for Forrest has some terrific local businesses in her part of the world, and I enjoyed hearing some of their stories in her contribution just now. I'm also pleased that the member for Parramatta is here in the chamber. The member for Parramatta is an extraordinarily dedicated champion of small businesses not just in Parramatta but right around Australia. She has a small business background and is a very valuable and respected contributor to small business policy on our side of politics.

Chambers of commerce—they've got different names all around Australia—are so important. They do a really good job of representing the interests of small to medium sized businesses in our community. I want to begin my contribution by acknowledging the work of the Logan Chamber of Commerce. I've been a member of the Logan Chamber of Commerce for some years now. It is a great group, and a very well motivated contributor to our local community. I want to acknowledge in the House of Representatives just how much I appreciate the engagement that we have with the Logan Chamber of Commerce. Just two weeks ago I gave a breakfast briefing to the Logan Chamber of Commerce at Diggers RSL. I was joined by my friend and colleague Cameron Dick, a terrific minister in the state government. He is now the Minister for State Development and Infrastructure. What I told the Logan Chamber of Commerce then—and it is the crux of what I want to tell the parliament today—was that when you've got pretty serious budget constraints you want to make sure the tax relief you give to businesses is targeted to where it can do the most good. We want to make sure that we get the maximum bang for our buck when it comes to tax relief for Australian businesses. And that's why we wholeheartedly support the bill before the House, which is about the instant asset write-off. We wholeheartedly support it for a range of reasons. An important reason why we support it is that we were the authors of it. I worked on this policy in another role in this building. I worked for the member for Lilley, who was the first Treasurer to implement this instant asset write-off. Unfortunately, it was chopped by the member for Warringah and the member for North Sydney in their first budget and, frankly, I'm pleased to see it back and pleased to see it extended. We support that because it is an important way to deliver targeted tax relief which will make a real difference to businesses in our local areas.

We want to target tax relief to where it can do the most good, where we can get the maximum bang for buck. For the same reason, we have proposed an Australian investment guarantee, which is all about accelerated depreciation for businesses of all sizes to ensure that the money we're investing in that tax cut or the money foregone from that tax cut in the budget is guaranteeing investment onshore in Australia. That means investment in Australian jobs.

One of the issues that we have with the government's alternative—the $80 billion tax cut—is that, as Goldman Sachs, the Prime Minister's former employer, and others have pointed out, a large chunk of that $80 billion in tax cuts will actually spray around overseas in the form of executive bonuses, share buybacks and puffed up dividends. So we don't think that an $80 billion outlay on a tax cut like that will actually do the good we need it to do onshore. That's why we've proposed an alternative. That's how we roll on this side of the House. If we don't like something the government has put up, whether it be to do with personal income taxes, company taxes or other policy areas, we propose an alternative. Our alternative is the Australian investment guarantee. I think, together—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The member for Mackellar, on a point of order.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Under standing order 76, I believe the member is straying far and wide from the bill.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

No, he's not. You will resume your seat. There is no point of order.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

What an absurd interruption that is! I'm talking about company tax. If you don't understand that this bill is about company tax, you should go back to your office and have a read of it. That's just pathetic behaviour, and you should be above it. Stop wasting the time of this parliament with such childish and petty interventions. Anyway, back to the substance of the bill, which the government should be proud of. It's their bill; given I'm giving a speech about supporting the legislation, you'd think you wouldn't want to interrupt that, but I don't think we should judge you by normal standards, by the sounds of that intervention.

Anyway, back to the issue. We think that businesses deserve tax relief in this country, and it needs to be targeted. It shouldn't be the $80 billion gift to multinationals, of which $17 billion will go to the big banks. It should be stuff like what is in this bill. It should be the instant asset write-off for small businesses. It should be the Australian investment guarantee that we've proposed. That's how we get maximum bang for the buck when it comes to tax relief for businesses in this country.

I don't propose to deal with the bill in any detail in terms of its specific contents. As other speakers have said, the main aspect of the bill is that it will extend the government's accelerated depreciation measure for small businesses for a further 12 months, to 30 June 2019. The measure applies for businesses with a turnover of up to $10 million. It means they can immediately deduct those smallish capital purchases. As the member for Forrest rightly said, it might be an investment in a fridge or something like that if you're a cafe. You can imagine all the capital needs of genuinely small businesses. A lot of stuff that they need to conduct their business is under $20,000, and this allows them to write it off.

As I said before, we support it. We are the authors of this policy and we're pleased to see it extended. We were terribly disappointed when there were cuts made to this initiative in the 2014 budget. We made the point at the time that the government should reverse course on that, and we are pleased that they did. Whether it was a humiliating backdown or not is a matter for the political argy-bargy of this building. It probably was a humiliating backdown—there have been a few of those—but we're pleased to see the outcome will be what we called for at the time. If only the government would see the light when it comes to their $80 billion tax giveaway to multinationals and big banks as well. If they were able to swallow their pride on that, like they swallowed their pride on this measure, then the budget would be better off and we'd get more bang for the buck for our tax relief for Australian businesses.

As I said before, when you lay out the alternative tax proposals of that side and this side, really the main difference is the targeting towards smaller businesses and targeting towards investment onshore in Australia. It makes very little sense to give so many billions of dollars to foreign multinationals and the big banks at a time when we've got record and growing debt in this country.

It also makes no sense to give a tax cut of that magnitude or that nature to multinationals and the banks when, at the same time, while the government can find $80 billion for those purposes, they say they can't find $17 billion for schools; they can't find $715 million for hospitals; they can't find $3.8 billion for universities; they have $270 million in new cuts to TAFE in the most recent budget; they're taking the pensioner energy supplement off Australian seniors; and they say they can't afford to give $14 a fortnight to pensioners in this country to help them deal with energy costs—the list goes on and on and on—but they can give $17 billion to the banks. Really what I'm saying is that there is a series of warped priorities in their budget and in their approach to public policy when it comes to company tax.

As I alluded to a moment ago, it's not like we have billions of dollars lying around in the budget. The net debt in this country was $175 billion when the government changed hands in September 2013 and it's now $350 billion.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The shadow minister will resume his seat. I call the member for Mackellar.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: I would like to reiterate my point of order. The speaker has moved far and wide from the topic, which is about depreciation—

Dr Chalmers interjecting—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The shadow minister has been asked to resume his seat. Can the member for Mackellar repeat his point of order?

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

My point of order is standing order 76. The bill before the parliament—

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

It's about whether or not we can pay for it, you fool.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member for Rankin will be quiet while I listen to the point of order from the member for Mackellar.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I understand that I've upset the shadow minister, but—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Tell me your point of order.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

It is standing order 76. This bill is about accelerated depreciation for small business. We have now endured many minutes of discussions about issues—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Mackellar. I'll ask the shadow minister to be relevant to the subject of the debate according to standing order 76.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

The idea that we're not allowed to talk about where the money's coming from for legislation that the government's proposed and that the opposition supports is—even by the very, very low standards of this person—quite extraordinary. Is this the best use of his time? Surely it isn't.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member for Rankin will resume his seat. I call the member for McKellar.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

My point of order is on a reflection on another member.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I call the member for Rankin.

Mr Falinski interjecting—

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

Surely—

Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Link to this | Hansard source

Just keep going.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

Yes, just keep going. You can't allow for certain levels of stupidity, can you, member for Parramatta?

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member will withdraw that.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

Stupidity?

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member will withdraw that.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

I withdraw. I consider that the commentary made by the member over there was stupid, and it was stupid for so many reasons. Principal amongst the reasons that it was stupid was that central to anything that should be proposed in this parliament is how we pay for it. I'm talking about how we pay for this measure of company tax relief for small businesses, and the point I'm making—and the point I will continue to make—is that the budget is not in especially good nick. That's a fact; it's in the government's own budget papers. Net debt has doubled. Gross debt is over half a trillion dollars for the first time in Australian history, and stays above half a trillion dollars every year for the next 10 years and is higher at the end of those 10 years than it is now. I would have thought that that was pretty central to our considerations. I will continue to make that point and those opposite can take as many points of order as they like.

Our Australian Investment Guarantee, as I have said, is all about targeting business tax relief. It's got a lot of support from the business community. We're very heartened by the support that our alternative has received, because it goes hand in hand with the measure that we're discussing. The $20,000 instant asset write-off in conjunction with the Australian Investment Guarantee is a superior way to give Australian businesses the support that they need to invest in our local economy. We've had modelling done by the Victorian University Centre of Policy Studies, which found that our policy is more effective in stimulating investment than the company tax cuts proposed by those opposite. The modelling found an investment subsidy like ours, compared to the company tax, is 'three times more effective as a stimulus to investment'. The authors of that report said:

... we strongly recommend that policy-makers consider an investment subsidy instead of a cut to company tax as a better value-for-money policy initiative to increase both investment and domestic material welfare.

That's a ringing endorsement. It didn't stop with the economic modelling performed by that university. The Australian Chamber of Commerce and Industry said:

... the government should adopt the Opposition's proposed enhancements to accelerated depreciation.

The CEO of ACCI, James Pearson, welcomed the commitment from the opposition and said it was good policy. From the Council of Small Business of Australia, Peter Strong, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow.

The Australian Industry Group supported it, as did the Property Council and the Energy Efficiency Council. The list goes on and on.

The reason we can afford to do the Australian investment guarantee hand-in-hand with accelerated depreciation for small businesses is that we wouldn't be proceeding down the path that those opposite proposed, which is to give the multibillion-dollar tax handout to multinationals and the big banks. We've also made some other difficult decisions and announcements in other areas of the budget to make sure that we can pay for our commitment.

We support this bill. We do it enthusiastically. We agree with much of what the member for Forrest said about it and what contributions on this side have said about it. This has the capacity to make a genuine difference, so we support the bill. We're proud to be the original authors of the instant asset write-off. I support the amendment by the member for Kingsford Smith, which says:

... unlike the Government's company tax cut plan, the Opposition's Australian Investment Guarantee will provide targeted tax relief for businesses that invest in Australia and Australians, and guarantees new investment.

(Time expired)

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018, which is in favour of supporting Australian small businesses. Nine out of 10 Australian businesses are small businesses. They make up over 33 per cent of Australia's GDP, employ over 40 per cent of Australia's workforce and pay over 12 per cent of total company tax revenue. We are, in short, a nation of small businesses. My electorate of Mackellar is full of hardworking and enterprising Australians who are committed to making a difference. From the boutiques of Pittwater Place to the coffee shops of Narrabeen, Mackellar, like the rest of Australia, thrives when its small businesses are performing well. Never before has supporting small business been so important. Small businesses create jobs and investment and add so much to the Australian economy. However, they are often confronted with issues such as cashflow problems and disproportionately higher compliance burdens. This is where there is a role for government to conduct sensible policy and to create the conditions for good performance and growth.

This bill will amend tax laws to extend the period during which small businesses can access expanded accelerated depreciation rules by 12 months, to 30 June 2018. This includes the availability of an immediate deduction for depreciating assets, amounts included in the second element of a depreciating asset's costs and small business pools, with a $20,000 threshold still available rather than a $1,000 threshold. The amendment specifically focuses on businesses with an aggregated annual turnover of less than $10 million to ensure that there is scope for a variety of small businesses to make the most of the changes. Such amendments will facilitate and boost the capacity of small businesses to operate for another year by providing cashflow benefits and reducing red tape.

Depreciation can be a major issue for small businesses. Given that many are asset-reliant and have very little extra cash following asset purchases, the initial years of a business are when it is often most vulnerable and prone to failure, which is why it is important that the government enacts sensible policy to assist. Asset depreciation schemes are used around the world, such as those outlined in section 168 of the United States tax code. Other countries' providing such concessions requires us to match them in order to remain internationally competitive and to encourage investment in our small businesses and industries.

The coalition has a proud track record of supporting small businesses and giving all Australian entrepreneurs a fair go. We understand that the economy will not function to its full capacity without a thriving small-business sector. We also understand that it can be tough as a small-business owner to meet demands and to survive financially. The coalition is committed to reducing red tape in order to give small businesses a fair go. I know from experience how difficult it can be to go out on your own by starting a business and I know about the stress and uncertainty that can come with it. This is particularly the case when it comes to purchasing assets and the large costs associated with their maintenance. When Australians back themselves to start businesses they often make spending sacrifices in other areas of life so as to be in a position to buy those assets that are crucial to success. This can be extremely stressful and risky, and often puts individuals off pursuing business ideas in the first place.

Unfortunately, our contemporaries in the Labor Party do not share our passion for small businesses and the opportunities that start-ups create. Bill Shorten and his union bosses are not committed to jobs and growth. They are not committed to supporting hardworking Australian entrepreneurs.

Mr Rob Mitchell interjecting—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member for Mackellar will resume his seat. I call the member for McEwen.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Thank you. The member for Mackellar well knows to refer to members by their correct titles.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Member for McEwen, what is your point of order?

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I just said it. The member for Mackellar well knows to refer to members by their correct titles, and he should be made to do that.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I remind the member for Mackellar to use members' correct titles, please. I call the member for Mackellar.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I will happily repeat myself for the benefit of those opposite. The Leader of the Opposition and his union bosses are not committed to jobs and growth. They are not committed to supporting hardworking Australian entrepreneurs. They are not committed to ensuring the prosperity of our economy and our nation. What are they committed to, you may ask, especially when it comes to this bill? They are committed to increasing red tape and imposing their agendas of big government on all in their path. History has shown that high taxes and government regulations not only drive away investment; they smother entrepreneurial spirit and will—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member for Mackellar will resume his seat. I call the member for Parramatta on a point of order?

Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Link to this | Hansard source

On relevance. The member is straying a long way from the bill, Deputy Speaker.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Parramatta. I call the member for Mackellar and ask him to ensure his debate is about the bill, and, even though we were quite tolerant of the member for Rankin, I now call the member for Mackellar.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I appreciate your tolerance, Mr Deputy Speaker. They smother entrepreneurial spirit and the will of everyday Australians to have a go by creating businesses. This is an issue that shows that the contrast between the coalition and Labor has never been starker. One has a plan for jobs and supporting businesses, while the other seeks to help their friends in the union movement.

We must stand up to such attempts to stifle our nation's small businesses and economic performance. If the Leader of the Opposition—whose name is Bill Shorten—and his union bosses get their way, then both our current and our future generations shall be faced with an economy riddled with uncertainty and a jobs market beset by lack of confidence. We simply cannot allow this to happen, particularly given the crossroads which our economy finds itself at.

A recent book by the Institute of Public Affairs and the Fraser Institute, titled Demographics and Entrepreneurship: Mitigating the Effects of an Aging Population, delves into Australia's declining small business entry rate. It calls for governments to cut red tape, reduce taxes and create an entrepreneurial-friendly environment to combat stagnant productivity in order to support new drivers of economic growth. If the conditions for new and small businesses are not friendly, then they simply will not grow or will go elsewhere. Individuals need to feel that the government is working for them, not against them.

The story of Australian enterprise software company Atlassian is a remarkable one. It was founded in 2002 by Sydneysiders Mike Cannon-Brookes and Scott Farquhar. The two started out with the ambition of replicating the $48,000 graduate starting salary typical of the big corporations, without having to work for someone else.

All their early staff were mates. They started out with a $10,000 credit card, and from there they developed their issue management software, known as Jira, reaching 2,000 paying customers by 2004. From there it was all uphill, recording revenues of $100 million in 2011, without a single salesperson, before a 2015 initial public offering on the Nasdaq stock exchange.

That Atlassian story is viewed by many as the fairytale story of Australian small business and start-ups. There is nothing more inspiring than two young Australians deciding to try their luck on their own and take on the business world. It is often said for every small business and start-up miracle there are a thousand failures. More precisely, a 2013 Google and PricewaterhouseCoopers study found only a tiny percentage of today's 1,500 technology start-ups were survivors from 2001. Yet this does not have to be the case. I want to see Australia produce more Atlassians, but this will only happen if government does its part by supporting the next Mike Cannon-Brookes and Scott Farquhar.

Australians should feel confident that they live in a country that encourages and supports entrepreneurship and innovation. The end of the mining boom has left many wondering where the next major driver of economic growth will come from and what will happen if unexpected international shocks hit the economy. This is where small and innovative businesses should be filling the void and stepping forward to drive Australia's next era of growth. Recent OECD rankings on measures of economic complexity and sophistication place Australia 36th out of 36—dead last. Our great dependency on primary exports has resulted in what some argue to be overexposure to cyclical economic conditions. This must change, and this government supports small businesses and innovation wherever practical.

Innovation drives productivity growth and, in turn, long-term economic performance. The jobs and economic drivers of the future often stem from nations investing in and encouraging innovation entrepreneurship. The intense competitiveness of the global economy has made the need to innovate and have an adaptable economy more important than ever. We cannot rest on our laurels and assume that export sectors such as mining are going to continue to drive export growth indefinitely. Australia needs strong industries across the board, and the success of small business will underpin this. An economy full of innovative and prosperous small businesses will not only help to retain our best talent; it will also encourage the best and brightest from all around the world to view Australia as a destination for success.

All Australians, young and old, should feel that there are ample opportunities and jobs for them here in Australia. This government recently delivered on a significant commitment. There are one million more Australians in work than there were when we were elected. This truly is a reflection of the hard work of Australian businesses and the government's strong economic management and shows how effective the two can be when working together. A record of consecutive years of growth will only continue if our industries and businesses are strong and providing jobs for Australians. This is why bills such as the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 are so important. They showcase the commitment of this coalition government and represent an important step in ensuring the growth of this critical sector.

Australian business owners and entrepreneurs do it hard enough, so when government is going to step onto the scene it should be in a well-thought-out and calculated manner. This government is committed to small business and Australian jobs, while recognising the need to improve the options available for small businesses regarding asset depreciation. Without such measures, our small businesses will face an increasingly difficult and uncertain environment. I'm proud that this government is actively making changes for the benefit of small businesses and I urge the House to support the bill.

I would also point out, in response to previous speakers on this bill, that this is a fully costed policy, that this budget will come into surplus a year before it was scheduled to do so, that we have a plan that is comprehensive, that we have grown the economy, that we have created a million jobs under this government and that we have created the environment to allow this to occur. So, for this side of the House to be lectured by those opposite that they're concerned about spending, that they're concerned about tax cuts for businesses, just demonstrates the ongoing hypocrisy—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The member for Mackellar will resume his seat. The member for McEwen on a point of order.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Standing order 76.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I'll call the member for Mackellar and remind him that—

An opposition member interjecting—

Order! You're speaking through the chair.

An opposition member interjecting—

You are if you're yelling out. I'll just remind the member for Mackellar that the amendment moved by the honourable member for Kingsford Smith to the original question 'That the bill be now read a second time' was 'That all words after "That" be omitted with a view to substituting the following words'. As with the member for Rankin, we will allow a fair bit of latitude. I'll now call the member for Mackellar and remind him that he's now speaking to the amendment; he's not speaking to the bill.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I would also like to take this opportunity to recognise the hard work of the chambers of commerce in my area, both at Mona Vale and Warringah, and the fantastic work they do to network small businesses in my area and encourage people through the thicket of red tape that was imposed on them by those opposite. They do an extraordinary job, and I do not believe that I have covered any subject—in fact, there are many subjects that I have not covered—that the member for Rankin hasn't spent many, many minutes in this House referring to with regard to the amendment. I'm sorry that it has upset the member for McEwen, but I've got to say: it's the best fun I've had all day.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to. I call the member for Hughes, and I'm sure he'll speak to the bill.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I'm pleased to rise this evening to speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 and also address some of the issues raised in the amendment by the opposition: company tax, the opposition's so-called Australian investment guarantee, relief for small businesses, business investment and so on. The subject of this bill is so wide that it would enable anyone to speak on it, and I would hope that members of the opposition do not try and make frivolous and unwarranted interventions when we are speaking on the topic of the bill.

You know why they do it? They don't want to talk about the economics, because they know that when we talk about the economics of this nation and which side of government is best for the nation, when anyone looks at the details, it is the coalition government. That is why those opposite want to try and shut this debate down and not have a wide-ranging discussion. They know, as the health minister pointed out today, that it's the hard work that the coalition government has done on the economy, on enterprise and on small business and getting that investment that has grown the economy and enabled this coalition government to finance many things in the health sector. We've been able to put many drugs on the PBS. The Labor Party was not able to put a single new drug on the PBS, leaving Australians waiting for life-saving drugs, because their blundering and incompetence when it came to economics shrunk the economy and put the budget into deep deficit. It is the coalition government, with our policies to cover investment and wealth creation, that has made the difference for those people.

Firstly, I'll deal quickly with some issues on the amendment. The amendment that the opposition has put forward here talks about the government's company tax cut. What I see time and time again is that members of the opposition simply do not understand how incentives work in the economy. We've seen company tax rates in this nation cut from the high 40 per cents—48 and 49 per cent—down to the current 30 per cent. If you followed the opposition's logic, every single time those corporate tax rates were cut, the government would've ended up with less money because they would've been giving away all this money to big business. But you know what happened, when you look at the numbers?

In this nation's history, every single time we have cut or reduced the corporate rate of tax, two things have happened: we have grown the economic pie of this nation by enabling businesses to come and invest and, more importantly, at the same time, that slice of the company tax receipts pie has grown. Today, in the economy, company tax, at 30 per cent, makes up a greater percentage of GDP than it did when it was at 36 per cent or when it was at a rate in the high 40s. Paul Keating understood that. That is why Paul Keating cut the rate of company tax.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Great Prime Minister!

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I hear the comment from the member for Wills, saying that former Prime Minister Paul Keating was a great Prime Minister. Paul Keating understood the importance of reducing the rate of company tax. We have seen not only Australia but almost every OECD nation this century understand the same thing. Almost every OECD nation has reduced their rate of company tax. Why? They understand that that is the way you can grow your economy. We are now faced with a situation where our corporate rate of tax of 30 per cent is no longer internationally competitive. We have seen the US reduce their rate from 35 per cent all the way down to 21 per cent. We are trying to compete against countries like Hong Kong and Singapore, which have corporate tax rates of 15 and 17 per cent. We have seen New Zealand reduce their corporate rate of tax. It was great to see the former New Zealand Prime Minister John Key here in Sydney last weekend. When he reduced the corporate rate of tax, do you know what happened in New Zealand? It was exactly the same thing that has happened here: the economy grew, and they actually ended up with more tax revenue to spend. That is more money to spend on all the things that we need to provide welfare for those Australians who are unfortunate and less well off. The greatest contrast between the Labor Party and the coalition that I can recall was spoken of in the speech from the health minister this afternoon in question time. He said that it's all about creating more wealth so we can afford to put things such as life-saving drugs on the PBS. Everyone on this side of the House should be very proud of what we've done.

If we're going to have a competitive economy in the years ahead, we have to have an internationally competitive rate of corporate tax, yet we have the opposition over there doing every single thing in their power to stop that from happening. How can we have First World wages or the best public hospital system that this nation can afford if we no longer have an internationally competitive corporate rate of tax or internationally competitive energy prices? Those are the two policies that the Labor Party want to inflict upon this nation. They want to see us have the highest electricity prices in the world because their policy is to copy the failed South Australian experiment. They want us to stick to an uncompetitive international rate of corporate tax. Those policies forebode terrible things for our nation should Labor ever sit on this side of the parliament.

This particular bill is just another example of how the coalition is backing small business. It's through the backing of small business by this coalition government that we have seen over one million jobs created since we were elected in 2013. I remember that, back then, we said that we would set a target that, in two terms of government, the entrepreneurs would create another million new jobs in this economy. They laughed. They scoffed. They said it wasn't possible. And you know what? We have delivered that million new jobs and we've delivered it before we said that we would. You would expect the opposition to sit back and simply say: 'Well done. Congratulations. You guys got it right and we got it wrong.' That's what you would expect. You would expect them to say: 'We apologise. Coalition government, you put in the policies that created a million new jobs, something that we never dreamed of doing.'

Now to some of the specifics of this bill. As announced in the 2018-19 budget, this bill extends a $20,000 instant asset write-off for a further 12 months, to 30 June 2019, for businesses with an aggregate turnover of less than $10 million. This is something that we need to explain, because the Labor Party thinks that any business with a turnover of more than $2 billion is a big business. They simply don't understand the difference between turnover and profit. They have no understanding whatsoever. Any business in the country listening tonight should note that if they go out and they want to make a $20,000 investment in some new capital investment for their business they will get an instant asset write-off from this government. There are around 3.3 million unincorporated businesses with an aggregate turnover of less than $10 million dollars that will be eligible for it. Every single one of those 3.3 million businesses will be eligible for that $20,000 instant asset write-off.

Extending this threshold for a further year is the government striking a balance between helping small businesses' cashflow and investment and the revenue impact on the budget bottom line, which we are returning to surplus. We expect that the budget will be returned to surplus. We've finally turned the corner on the damage that was done by the previous Labor government, who drove the budget into deep deficit year after year after year. One year early we'll be getting that budget back into balance. And then we have the long, hard job of paying back that debt. The coalition have done it before. Going back to the previous century, in 1996, we know that the Howard government inherited a $96 billion deficit. They paid back every single cent. It took them at least six years. They not only paid back every single cent; but along the way they also had to pay back $54 billion in interest. Then they put $40 billion in the Future Fund and they had the budget in a $20 billion surplus. That is what the Labor Party inherited, and they squandered it. We are now within striking distance of getting that budget back into balance.

There is a lot more that the government is doing to help small business in addition to this $20 million instant asset write-off. We're also investing $20 million to help small businesses form local and regional business hubs so that entities can work together and access new export markets and global supply chains. We're providing $17.7 million to support entrepreneurs—the drivers of the economy; the wealth creators—including mentoring support and a focus on those aged over 45 years. We should be doing that, because over 45 years of age should almost be the time when many people start their entrepreneurial career, because they have the experience—the life experience, the business experience—that can help them make important entrepreneurial decisions.

We're also protecting small businesses from businesses that deliberately go bust to avoid paying their bills, with tough new measures to counter illegal phoenixing. We are continuing to reduce red tape burdens across the small-business sector. We are launching FTA negotiations with the European Union. That's also another huge difference.

Many of these small businesses that can take advantage of the accelerated depreciation will be working in export markets, because we, on this side of the House, understand how important it is to give Australian businesses access to markets. We have confidence that, if they get access to the markets, then they can compete on that international playing field as well as any other business from any other nation in the world. This is in contrast to what we have seen from the Labor Party. During the free trade negotiations with Japan, we had the Leader of the Opposition bring up midget subs. That was his contribution to the debate, to bring up the midget sub attack on Sydney during World War II. During the China free trade agreement discussions, the opposition quoted xenophobic statements about how, somehow or other, we shouldn't be doing that with China. We've seen the success of those free trade agreements. We've seen them give thousands of businesses opportunities to increase their exports across all sectors of the economy, and that's why we're continuing those negotiations with the European Union.

We've also redefined 'small business' as a business with a turnover of up to $10 million, which now includes 99 per cent of all businesses. We've cut taxes for small and medium enterprises to 25 per cent and increased the unincorporated business discount to 16 per cent. I've already mentioned that we've extended the $20,000 instant asset write-off for another 12 months. And, importantly, we've abolished $5.8 billion worth of red tape—or I should more correctly say red and green tape—whereas the opposition want to tie businesses up, put more regulations on them and give them more forms to fill out, because the opposition think that form-filling is productive. (Time expired)

David Coleman (Banks, Liberal Party, Assistant Minister for Finance) Share this | Link to this | Hansard source

I'm really pleased to have the opportunity to speak on this important legislation that is addressing this very important issue of accelerated depreciation for small business, which makes a huge difference for businesses right around Australia. I'm also pleased to have the opportunity to speak to some of the issues raised by the absurd amendment moved by the opposition in relation to company tax more generally, and to highlight the very real contrast between this government, which is about lower taxes and more jobs, and those opposite, who are about higher taxes and fewer jobs. This is a very important contrast.

I want to turn my attention to the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 that is before us. This bill is really important because, as you know, Mr Deputy Speaker Irons, in small business cash is king. If, as a small business, you are considering buying a capital item, then you've got to pay for it today. If you're going to buy a coffee machine or a bunch of computers or any other sort of capital item, you need to pay for it on the day. But the way the tax system works, you generally can't claim the cost of that expenditure immediately; you have to do that over a number of years. It can be three years or five years; it varies, but you can't claim that expense immediately. While you've got the cash going out the door today, the cost from the perspective of your tax accounting actually comes through over a number of years and effectively you're out of pocket in the short term in a cash sense. That's a really difficult problem for small businesses.

What this bill does is extend the accelerated depreciation for small business entities. What we say in this bill is that any incorporated business with turnover of up to $10 million will immediately be able to expense capital expenditures of up to $20,000. There are 3.3 million businesses around the nation who are affected by this, and those businesses will be able to go forward and invest with confidence, knowing that that capital purchase can immediately go through their account and that tax deduction for the cost associated with that expenditure will immediately return to them in the form of reduced tax on their next tax bill. That's a really, really important initiative, and it's absolutely tremendous that it's being extended for a further 12 months in this important bill.

This bill, of course, exists in this broader context of supporting businesses to go out there, to invest and to create jobs. We on this side of the House can speak on this issue with great authority, because in the last calendar year, 2017, more jobs were created than in any other year in Australian history. We can pick any year in the calendar in the nation's history and ask, 'Well, how many jobs were created?' Every single year will have fewer than 2017, with a huge 415,000 jobs created across this great nation in that year. A big part of the reason those jobs have been created is the pro-business and pro-investment policies of this government, and tax is an important element of those policies. Mr Deputy Speaker Irons, as you know, this government has moved very strongly to provide tax relief to businesses to ensure that they can invest, to ensure that they can compete and to ensure that they can put their best foot forward, go out there and create jobs.

But those opposite have done everything they can to oppose tax relief for Australian businesses. This isn't a theoretical thing; this isn't just what people like the Leader of the Opposition say on the daily news. This is about what they actually voted against. It's a very important point: this isn't theoretical; this is real. The opposition voted against tax relief for businesses with a turnover of $2 million or more. We hear those opposite talk about the 'big end of town' and multinationals. Those are favourite rhetorical devices for them. But they voted against tax relief for businesses with a turnover of $2 million. As you know, Mr Deputy Speaker, a business with turnover of $2 million is in fact a very modest-sized business. It may well be a small suburban manufacturer, it might be a distributor of goods in rural or regional areas or it might be a farm. But those opposite say that business shouldn't have any tax relief and that that business should pay one of the highest tax rates in the world, some 30 per cent. Again, that's what they voted for. It's very important that people understand this.

With the tax reductions that we've seen for those smaller businesses and that have filtered through into the economy—helping those businesses to be confident, helping them to invest and helping them to create good jobs—all of that good work happened despite the vehement opposition of those opposite. It's very important that the Australian people understand that for a small- or medium-sized business with $2 million in turnover or more, the policy of those opposite is to increase their tax. They voted against tax reductions for those businesses. They want to increase their taxes—that is their policy, and that is a shameful policy.

In contrast, we know that jobs are created by the private sector. The overwhelmingly vast majority of Australians work in the private sector. They benefit when their employers invest, because you can't work for a business that doesn't exist. You can work for businesses that are investing and you can work for businesses that are creating jobs. You can't work for a business that isn't out there investing. That's why it's so important that we support small- and medium-sized—and, indeed, larger—businesses to be competitive internationally.

Oxford university recently found that Australia ranked 27th of the 33 OECD nations they looked at, with one being the lowest tax rate and 33 being the highest. Australia ranked 27th in terms of the competitiveness of our corporate tax rate. We've seen very significant movements in the tax rate in countries like the United States and the United Kingdom, with tax rates going to less than 20 per cent. Corporate tax rates are less than 20 per cent in the UK and in the low 20s in the United States. Those opposite say: 'Oh, well, just leave the Australian tax rate at 30 per cent. It will make no difference.' That's what they say. It's an absurd argument, because it basically says that business does not respond to incentives to invest and that the cost of doing business is irrelevant to business. That's what those opposite say, and that's just an absurd argument. Anyone who thinks at the most basic level of common sense can appreciate the bankruptcy of the position of those opposite.

As I said, this isn't theoretical. They actually voted along these lines. They voted for it. They voted to say a business worth $2 million should pay 30 per cent tax. They did. It's a very inconvenient truth, but they voted to seek to ensure that a business with $2 million of turnover maintains a 30 per cent tax rate, which is one of the very highest in the world. That's what they think is good for Australia. It's very important to remember this. The member for Kingsford Smith, no doubt seeking to make some sort of contribution to the debate, moved this amendment, but it's pleasing in that it gives me the opportunity to reflect on the absolute failure of those opposite.

But that's not all. There's quite a bit more to talk about on this topic of tax and the failings of those opposite. They say that capital gains tax should go up by 50 per cent for everyone. The policy is called 'housing affordability', so that might make you think it's just about housing. It turns out it's not. It turns out it's actually about every form of investment in the entire Australian economy. So, in order to encourage investment and in order to encourage jobs, they say: increase tax on capital gains—50 per cent on everything!

Someone might say, 'I want to invest in getting a new factory off the ground,' maybe in suburban Perth, and they might seek some investment from people to get that factory off the ground so they can go out and employ 20 or 30 people to get that factory happening. What those opposite say is that the person who invests in that factory should pay 50 per cent more tax on their investment. That is just an absurd policy. This just shows the paucity of understanding of the most basic economic principles over there. If you want people to invest more—and we do want people to invest more because we want more jobs—you don't say to them, 'Well, hey, here's what we're going to do. We're going to make you pay 50 per cent more tax.' But that's what they've done.

I suspect that, when their so-called housing affordability policy came out, some of the members opposite didn't actually realise that the 50 per cent capital gains tax increase would apply to absolutely everything in the economy. But, if they have any confusion about that, they should consult with the shadow Treasurer, and he will confirm that their plan is to increase tax by 50 per cent. So, if you've got a small business in Braddon or in Longman, or perhaps you're involved in some sort of business in the Adelaide Hills, and you're seeking investment, it's very important that people understand that under those opposite those investors who come forward to invest in, to help that business, would pay 50 per cent more tax. It's an absolutely ridiculous policy!

We say less tax means more investment. We say that the money in the economy is not the property of the government. It is generated by the hard work of individuals. It is generated by the hard work of businesses all around Australia. It's their money. It is not the government's money. Now, of course, government must charge some tax in order to manage the operations of the government and provide those essential services upon which we rely, but it is not our money; it is their money. We must respect the fact that it is those individuals and businesses who have gone out there and created that economic activity. The last thing we should do—the last thing any sensible government would do—is seek to penalise those people who are going out there and investing and creating jobs by hitting them over the head with more and higher taxes. It's the wrong thing to do. Certainly, on this side of the House, we will never behave in that way.

The proof of the pudding is 415,000 jobs created last year—the greatest number of jobs in Australian history. Those opposite should be celebrating. They should be saying to the government, 'We will back your economic policies because they're working.' It's the logical thing to do, isn't it? If something is working, you do more of it. The economic policies of this government are very, very successful. We have very strong job creation, and that is great news because it means more opportunities for Australian families, more opportunities for people to pursue their dreams and a greater sense of wellbeing across our community. These are all very, very good things.

But Labor want to increase company taxes by $59 billion. They want to talk about the so-called 'big end of town' whilst they're hitting over the head basically everyone, even retirees who have done the right thing: they've worked hard, saved and put away for their retirement. Labor come along and say, 'Oh, gee, there's a very attractive pot of money over there with those retirees. How do we get that and how do we get it straightaway?' The retiree tax is not grandfathered. There's no phasing in. No—bang; it's straightaway, under those opposite. They will take billions and billions of dollars from the retirement savings of ordinary Australians who have done nothing wrong. They've played by the rules, they've worked hard, they've supported their families and they've put a little bit away for their retirement. The shadow Treasurer and the Leader of the Opposition want to come in and take billions and billions of dollars from those hardworking, ordinary Australians. You can see a massive contrast.

The member for Kingsford Smith, in his perhaps misguided enthusiasm, has invited us to talk about the big contrast on company tax and tax in general. We created a record number of jobs last year. A big part of that is our support for small business through tax relief. This bill will provide more tax relief. It's absolutely the right thing to do. I'm pleased to speak in support of the bill. (Time expired)

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

I'm really pleased to rise and speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. I'm pleased to do it because it's part of our plan for jobs and growth. We know that our policies are working. We've seen record jobs growth in the last 12 months—some 420,000 jobs, in fact, throughout Australia over the last 12 months, with the vast majority of those being in small and family owned businesses. Funnily enough for senators and MPs on the other side of the House, most of those jobs have been created in businesses with a turnover of up to $50 million. Why is that so significant? Because that's where we've reduced company tax, in businesses up to $50 million. They are the ones who are employing people. They're the ones giving people a head start, a job and aspiration as they move from one job to another. What's really interesting as well is that today those opposite opposed $140 billion in income tax cuts. They want to make sure that Australians don't keep their own money. They want to actually take more of your money—your hard-earned income tax. They don't want to pass that through the Senate, and it's an absolute shame. We know that hardworking Australians do extremely well.

We talked a little bit today about aspiration. The Deputy Leader opposite said she has no idea what that means or what it is, or she has no aspiration. The fact is that I know people who were earning $40,000 about six years ago and now they're on well over $80,000. Other people I know were on $90,000 and are now on over a couple of hundred thousand dollars. So aspiration is a good thing for everyone. For every young person in this country, for everyone who wants to get ahead, for everyone who has a goal or a dream, this is important. That's why we're eliminating bracket creep and providing aspiration to the people who want to do it. The Labor Party stand opposed to it because we know that, heading to the next election in next 10 months, they're for higher taxes and we're for lower taxes; they're for more spending of your money and taxing you more and we're for better management of your money and want to see the economy come back to surplus next year.

In relation to this bill in particular and company tax, we also know that small businesses aren't just businesses under $2 million, like those opposite would have you believe. It's an absolute fantasy. They need to get out in the real world. This bill will apply to all businesses earning up to $10 million. I want to say to the businesses in my electorate: you've got a great opportunity in the next week and a half. Go grab it. Before 30 June, next Saturday, you've got the opportunity to buy products—and it can be any product you like—up to $20,000 and you can instantly write it off this financial year, rather than having your accountant depreciate it over three, four or five years, or whatever is applicable. This is a good measure that was extended in this year's budget, so it will go next year as well. The Treasurer put it forward, and I'm very pleased to support it. But businesses should take advantage of it in the next week and a half.

There are lots of opportunities for businesses in my electorate and, I'm sure, in every member's electorate to take advantage of this measure. In my electorate, I have some fantastic artists. I have a lady called Jo St Baker. She is an individual artist who runs a business out of Mon Komo Hotel in Redcliffe. She does some fantastic artwork in relation to the local environment, the local seaside of the Redcliffe Peninsula. She has pieces from a couple of hundred dollars up to a few thousand. You might find that a business has just fitted out their office and they want a new piece of artwork for their front foyer. They can go down and see Jo St Baker and pick up a piece and instantly write that off this year, which is important.

There's a lady called Sharron Tancred, from Tailored Artworks. Sharron is a lovely lady and does some fantastic work. She's a really good networker. She lives just over in Murrumba Downs and goes to the North Lakes Chamber of Commerce. Tailored Artworks customises artworks and transforms spaces. A business might put in a new kitchen—we'll get to new kitchens in a moment—that has a splashback and they want to create a special art piece for it. They will be able to take advantage of the instant asset tax write-off, if Sharron can get it done within the next week and a half. I imagine she would be pretty busy.

If you're a business and you need a new kitchen, people like Kingswood Cabinets at Narangba in my electorate have a whole range of different kitchen products for a few thousand dollars. Not only will you be able to give business to them and instantly write it off this year; you will also be able to give the local carpenter or installers some work, which is important as well.

Businesses may be after a new car or a second-hand car. They could go and see Village Motors at North Lakes or Jeep and VW down near Redcliffe at Kippa-Ring. There are a whole load of car dealers in my electorate. There's Mazda at Aspley as well. People may be able to pick up a new vehicle for under $20,000—a small single-cab petrol ute—or a second-hand vehicle. They've got a week and a half to do so and take advantage of the instant asset tax write-off. Not only that, they can whack a new bull bar on the front. In my electorate, there's East Coast Bullbars at Clontarf, and also Ultimate Bullbars at Narangba, who make custom bull bars. I'm very fond of what East Coast Bullbars do in particular, because they employ over 100 people. They make the best world's alloy bull bars right in the Petrie electorate. So people can once again take advantage of the instant asset tax write-off.

Remember, if this wasn't extended, businesses buying these products would have to depreciate them over seven years. For the member for Kennedy, these are Australian made and manufactured bull bars; they are made right here in my electorate. I know he is always on about manufacturing. He should be jumping for joy on this one. We've also got Kennedy's Timbers at Narangba, which sell a whole lot of recycled timber, which is fantastic. If a business is looking to do up their foyer with some new timber, they could take advantage of that.

You can also buy new computers, new servers or new monitors, perhaps from one of the Harvey Norman stores or from an individual small business that sells computers in my electorate. You may want to reward the staff and get them a new coffee machine. I have a great coffee roaster in my electorate, Neli Coffee at Clontarf, that also sell machines. If you want to buy a coffee machine for $1,500, rather than depreciating it over a few years, you can instantly write that off in the next week and a half. Because the government has a plan for small business, it will be extended next year as well.

Another good manufacturer in my electorate is Polyworld at Clontarf. They sell all types of water tanks. If you want to get a water tank for your business—you may be using a lot of water—you can hook it up to the roof, catch some of that water and use it in your business. You will not only be providing some work for Polyworld but also for those individual plumbers that will install it for you.

We know businesses are very sensitive with energy prices at the moment. Energy prices are a real issue. I've spoken on this. We need to make sure that we have reliable, affordable energy, as well as renewable energy. We need to make sure that we adopt the government's RET and not go to the reckless 50 per cent renewable target of those opposite, which will continue to send prices up. When those opposite were in government, energy prices doubled for businesses in my electorate. You might want to take advantage of Springers Solar or Sunelec in Clontarf, local businesses who sell solar. They can put it on your roof. If you are a business, I would encourage you to take advantage of that now. Most businesses operate between 8 or 9 am and 5 pm—I know the days are a bit short in winter. That is the perfect place to install solar because, as you are producing it, you can use it at the same time. Don't worry about selling it back into the grid; just use it as you create it.

There are a whole range of businesses in my electorate where people can take advantage of the instant asset tax write-off. I am very pleased to support this bill. I know that it is creating jobs. It is part of the government's plan. Once again, I go back to the 420,000 jobs created in the last 12 months. This stuff doesn't just happen by accident; it was a detailed plan in relation to jobs and economic growth that centred around business tax cuts. We have seen the advantage in cutting company tax for businesses up to $50 million. Again, that is where the jobs are being created. The instant asset tax write-off is benefiting businesses as well.

Free trade agreements have also been beneficial. Moreton Bay Seafoods in my electorate sells prawns and so forth into China. They have been able to take advantage of that, which is really important. In defence manufacturing, I am very pleased that the government will be building the Land 400 project at Ipswich. That is good news for Queensland, and there are businesses in my electorate that will be able to take advantage of the supply chain as well.

We have also seen the free trade agreements helping in agriculture. A lot of people in my electorate really care about farming. We have seen some boosts to agriculture because of free trade agreements as well. Our plan around defence manufacturing, our plan around free trade agreements in agriculture and our plan around business tax cuts are all producing jobs and economic growth. The more economic growth we get, the more income tax and company tax we have. That's why next year we will be balancing the budget.

That is all at risk if the Labor Party is elected. We know they are reckless. We know they don't understand small businesses. If they did, they would certainly be supporting the instant asset tax write-off for businesses up to $10 million. It is outrageous that they think only businesses under $2 million should take advantage of this opportunity. This is good policy. I support the bill.

Michael Sukkar (Deakin, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

In summing up, it is wonderful to follow the member for Petrie's very eloquent contribution and I want to thank all other members for their contribution to the debate on this bill. With 3.3 million small businesses employing 5.7 million Australian workers, the small business sector contributes in many important ways to every single town, community and city and to the entire country. The government is committed to continuing to back these Australian businesses. We have legislated tax cuts as part of our 10-year enterprise tax plan to reduce their tax bill. The government has increased the unincorporated small business tax discount and lifted the small business entity turnover threshold, very importantly, to $10 million. By backing these small businesses, they can invest more, grow more, employ more Australians and, ultimately, pay higher wages.

In contrast, the opposition, sadly, doesn't have a plan for a stronger economy and delivering jobs. At every opportunity, they seek to attack these small businesses who are, in the end, the engine room of job creation in our economy more broadly. We know that the Labor Party used to believe in competitive company tax rates. The Leader of the Opposition, as the Minister for Financial Services when Labor was last in government, said in March 2012: 'Any student of Australian business and economic history knows that part of Australia's success was derived through the reduction in the company tax rate. We need to be able to make life easier for Australian business, which employs two in every three Australians.' He was dead right. In 2013, the shadow Treasury spokesperson also wanted to cut the company tax rate, saying: 'It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.' But that is unbelievable. The Labor thing, in the end, is not about reducing company taxes but playing politics, and this is a very, very sad class-envy approach. The problem is that because Labor can't control their spending, they won't commit to a speed limit on taxes, and this is a recipe for higher and higher taxes that in the end we know will suffocate our economy, as the Treasurer has often said, just like a snake eating its tail.

In contrast, we have a plan for a stronger economy and we have a plan to guarantee the essentials and deliver tax relief. This bill is part of a suite of measures that the government's taking to deliver on our plan for a stronger economy by backing small business. The bill will extend the instant asset write-off for a further 12 months, to 30 June 2019. It will also allow immediate deductibility for assets below the $20,000 threshold. Extending this $20,000 instant asset write-off means we're continuing to help small businesses reinvest in their business and replace or upgrade their assets, making their business, in many cases, more efficient and more productive. Small businesses with annual turnover less than $10 million will be able to immediately deduct purchases of eligible assets which cost less than $20,000, with the requirement that they are first used or installed and ready for use by 30 June 2019. Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent in each income year thereafter.

The $20,000 instant asset write-off is a phenomenally successful initiative that is supported by the small business sector. The extension of this measure benefits hardworking Australian small businesses, boosting their activity and their investment for another year. In this sense, the government has a plan for a stronger economy and a plan to enable and encourage small businesses to contribute to that and to keep business competitive, which grows jobs and grows wages as well. I therefore commend this bill to the House.

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

The original question was that this bill be read a second time. To this the honourable member for Kingsford Smith has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The question is that the amendment moved by the member for Kingsford Smith be agreed to.

The House divided. [18:42]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Original question agreed to.

Bill read a second time.