Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

I rise to speak today in support of the measures announced in last night's federal budget. I would, in particular, like to commend the lifting of the cap on the instant asset write-off. This is a game changer for small business—not just for employers but employees also. Being a small-business owner myself for almost 20 years, I have long advocated for this measure. The former practice of depreciating an asset over many years stymied cash flow and ultimately cost jobs.

Previously, say a business made a net profit of $100,000 for a year and wanted to purchase a piece of equipment for that business that cost $100,000, on many occasions this wouldn't happen as they knew they had a tax bill coming and needed a portion of those profits to pay the upcoming tax bill. This meant that the business that they would have purchased the piece of said equipment from missed out on the sale, meaning less work for them and meaning they needed fewer employees, and the government missed out on the $9,000-odd of GST on the item, plus any income tax that would have been generated from the lower employee wages being paid, not to mention the truck driver who missed out on the delivery of the item, the installers who missed the opportunity to install the new piece of equipment, the warehouse and logistics staff who missed out on handling it—the list goes on and on.

As most people know, I am passionate about growing the Australian manufacturing industry. When I speak to local manufacturers in my electorate of Longman they tell me one of the stumbling blocks we had in this country for local manufacturing was the cost of equipment to expand or to initially set up a manufacturing business. It would take, in some cases, up to 10 years for manufacturing businesses to realise the tax deductibility through depreciation of major equipment purchases, which is a major drain on cash flow, and this prevented many businesses expanding or even starting up in the first place. This measure fixes that problem.

Policy decisions like this one put Australia on the map as a country that is open for business and give us a competitive edge over other countries in the global market. It means where previously we may not have been considered as a potential destination for setting up a manufacturing business we are now in the mix. This, of course, fulfils this government's three main priorities, which are jobs, jobs and jobs. In my humble opinion, we have had too many government leadership teams that have been managers, not leaders, in this country. Much time has been wasted in the past reactively putting out fires instead of proactively putting strategies in place and investing in the future so we don't have many of these fires in the first place. Scott Morrison and his leadership team have a vision for this country, and I'm proud to be a part of this team that I believe will deliver a season of prosperity in this great country.