Phillip Thompson (Herbert, Liberal National Party) Share this | Link to this | Hansard source

I move:

That this House commends the Government on the delivery of the 2021-22 budget, and in particular the measures to incentivise business investment, including:

(1) extending temporary full expensing;

(2) extending loss carry-back measures; and

(3) establishing a 'patent box' for the biotechnology and medical technology sectors.

Small and medium businesses are the engine room of our economy. That's why the Treasurer's recent budget focuses so heavily on ensuring our small- and medium-business owners get the relief they need to keep our economy moving forward. There are more than 10,600 small and medium businesses in the electorate of Herbert, and that's why I wanted to move this motion this morning—to highlight how this budget will potentially help not only each and every one of them, but others around the country as well. We've made a massive investment in small and medium businesses through a range of tax relief measures, but in particular by extending temporary full expensing—what we used to call the instant asset write off—extending loss carryback measures and establishing a patent box for the biotechnology and medical technology sectors.

We know that these measures work. Since the October 2020 budget, investment in new machinery and equipment has increased at its fastest rate since March 2003, increasing by 8.5 per cent in the December quarter and 10.3 per cent in the March quarter to be 7.2 per cent higher over the year. Extending temporary full expensing and temporary loss carryback for an additional year is estimated to deliver an additional $20.7 billion in tax relief to businesses over the forward estimates period and support an estimated $320 billion worth of investment. Temporary full expensing has been a policy of ours for a number of years that has been really ramped up during the response to COVID-19. It allows businesses to deduct the full cost of equipment in the first year, instead of over a number of years. Come tax time, this results in more of their profits back in their business and more money pumping through our local economy.

This is so important. Just think about the flow-on effect. If a local business in my electorate of Herbert buys a new piece of equipment, its productivity will hopefully increase and it will be able to put on more people and create more jobs for locals in Townsville. But it doesn't stop there. Think about the supply lines, the small business where they purchase the equipment and the sale that that small business may not have otherwise had. It means they can support more jobs and grow and expand themselves. We're already seeing this at work in Townsville. Business confidence is now at its highest level in 14 years with hundreds of jobs vacant. And into the mix come other initiatives like HomeBuilder, where the construction industry is going gangbusters keeping up with building new homes, not to mention the extra places for the First Home Loan Deposit Scheme we announced over the weekend. The loss carryback measures are also a huge win for local businesses. Eligible businesses can carry back losses to earlier years, resulting in a refundable tax offset and potentially more cash in the bank to pump back into their business. So I would encourage all local owners of small and medium businesses to talk to their accountants about how they may be able to make the most of this opportunity.

Finally, in this time of global pandemic we should be doing everything we can to be supporting and encouraging local medical and biotech businesses to innovate. Through this budget we're doing that by introducing a patent box. The patent box will reduce taxes on income from innovative research to encourage businesses to undertake their research and development in Australia and keep patents here.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

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

I second the motion and reserve my right to speak.

Meryl Swanson (Paterson, Australian Labor Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source

The Labor opposition welcomes any new investment in the biotechnology and medical tech sectors, and in the Hunter we are proudly home to the Hunter Medical Research Institute, which does fantastic work every day. I am pleased to speak on this motion, but it would be remiss of me not to acknowledge that this motion acts to distract from the fact that the 2021-22 budget has failed to address critical infrastructure needs in regions like mine. In my electorate of Paterson, we're still waiting on the M1 Pacific Motorway extension to Raymond Terrace. I've been championing the need for this vital piece of infrastructure since I was elected in 2016, and as a resident of the Hunter I'd known about this problem for 10 years prior to that as well.

I want to talk to those opposite. I want to take them through the time line of the Liberal lip-service when it comes to this critical piece of infrastructure. Back in 2015 the New South Wales coalition promised to fund the planning for this project. It was a bloke called Duncan Gay. He was the freight and roads minister for the New South Wales government at the time, and he announced $200 million to complete the planning. Fast forward to 2018, when the federal Liberals promised the project yet again, claiming that this was a critical need for our region and an absolute priority. But did we see any more money for the planning or any actual getting on with the project? No, we did not. Did we see any environmental impact study or expression of interest for tender? Not a single thing. We waited, and the coffers sat empty. In April 2019 Anthony Albanese, then Labor's shadow minister for infrastructure, and I spoke out, and we said how vital this project was again. Albo committed $1.5 billion to get this project going under a Labor government.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Paterson should refer to members by their proper titles, even ones that they're familiar with.

Meryl Swanson (Paterson, Australian Labor Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source

Then the shadow minister for infrastructure and roads for Labor said this project needed to happen. This government rushed to re-announce its election commitment again. But would you believe it? There's still no money. The people of the Hunter have seen absolutely no leadership from this government on the M1.

This project must be a priority for this government, and it must be an urgent priority for Transport for NSW and the New South Wales government as well. I know from the department that the federal government is where the hold-up is. Those opposite have absolutely no intention of fast tracking this project, and it must be fast tracked. It should have been done 15 years ago. It should be started tomorrow—today in fact! The Hunter is dealing with the fallout from this pandemic. We need jobs and investment now. This piece of infrastructure alone will create jobs. It will create investment and it will create the ability for people to move through the region and to get to their small businesses—to get to their jobs and to get the big freight moving across our country. How can the government pat itself on the back when vital infrastructure like this, that has been promised for over 15 years, has not been followed up and built? They talk a lot about jobs and delivery, but we've not seen a jot from them about the M1. The federal government's own department of infrastructure website is now predicting that the expected start of this project will be mid-2023, with completion blown out to 2029. This is totally unacceptable. They need to get on and fast track this project, right now.

The mind-blowing incompetence is just incredible. Those opposite will blame the bureaucracy and they will blame each other, between states and the federal government. But, at the end of the day, the buck stops with this federal government. And when you compare it to Labor, who got on and delivered things like the Hunter Expressway, that is carrying traffic right now, today, it took a federal Labor government to put funding into that project. It also took a federal Labor government to properly invest in the Pacific Highway. John Howard invested $1.3 billion over 12 years. We invested $7.6 billion in half that time. The people of Paterson and the Hunter know who will fast track this project. The M1 needs to be done. It will be done by a Labor government, unlike this Liberal government ,who make empty promises and don't fund them.

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

It's a pleasure to rise to speak on this motion by the member for Herbert about the range of supports that this government has provided to small and medium business right across my electorate of Forde. This motion, in particular, focuses on the extended temporary expensing measures, the extended loss carry-back measures and, importantly, on establishing a patent box for our biotechnology and medical technology sectors. All of these are predicated on boosting the investment of support for business right across this country.

These incentives are unprecedented in their scale and scope, and are available to over 99 per cent of all businesses, which, together, employ around 11.5 million Australians. Since the budget of October 2020, investments in new machinery and equipment have increased at their fastest rate since March 2003. They increased by 8.5 per cent in the December quarter and 10.3 per cent in the March quarter, to be 7.2 per cent higher over the year. These investments will boost economic activity and employment opportunities both in the short term and the longer term. In the longer term, equally, they will boost the productive manufacturing capacity of the economy of the future.

The budget will ensure this momentum continues. An estimated $320 billion worth of investment is expected to be supported off the back of these initiatives, combined with an additional $20.7 billion in tax relief to business over the forward estimates. This is investment which goes through the supply chain. We can look at a business like Holmwood Highgate and its success with defence contracts. Over 80 per cent of materials that go into new defence contracts for manufacturing water and fuel tankers is sourced from our local supply chain. It's this government, through its investment in these initiatives but also in its support for business through the R&D tax incentive, that is helping to create the opportunity for businesses to innovate and grow.

I know that in my electorate of Forde the many small to medium businesses across the electorate that I have met with and talked to recently are very thankful for the JobKeeper program over the past 12 months. It ensured that they were able to keep their doors open and keep people employed. And they appreciate a number of the other grant programs, such as those I've outlined. The Manufacturing Modernisation Fund has helped the business I mentioned earlier, Holmwood Highgate. They've been able to invest, through that, in a state-of-the-art laser cutter for aluminium and steel. The consequence of these investments is that they're growing their workforce, putting on more apprentices. And all of this leads to jobs in our local community. They have even entered into partnerships with our local high schools to bring in school based apprentices and trainees.

This creates further opportunities and pathways for our students and helps them to understand that there are myriad job opportunities in the electorate of Forde and right across the country that don't always involve, initially, going to university. This showed in the unemployment numbers that were released last week. The unemployment rate fell to 5.1 per cent, exceeding all expectations. Employment is now 130,000 above its level in March 2020, pre-COVID. The incentives that the government has created are about helping people grow and build their businesses, therefore growing and driving our economy and ensuring job opportunities for Australians. They are helping business, and many of the 17½ thousand businesses across the electorate of Forde have been able to take advantage of these opportunities. I know this is creating economic activity and job opportunities. It is just another example of this government continuing to deliver for Australians, each and every day.

Patrick Gorman (Perth, Australian Labor Party, Shadow Assistant Minister for Western Australia) Share this | Link to this | Hansard source

If it really believed in helping small businesses, if it really believed in supporting the business community, this government would be doing two things: it would be fixing national quarantine and it would be fixing the vaccination rollout. These are the things that, more than anything else, businesses in my electorate are raising with me. They do not understand. The leaders of small businesses run logistics operations day in, day out. They watch the absolute incompetence of this vaccination rollout and say: 'This is the one thing you could do to support us. It's the one piece of public health infrastructure that would support our businesses right now.' Instead, in the first half of this year we've had two lockdowns in Western Australia because hotel quarantine is no longer fit for purpose and our community is not vaccinated.

Businesses say to me time and time again that they want to get quarantine out of my electorate, out of the Perth CBD, because when it leaks it leaks into our most-densely-populated suburbs, and it is those small businesses—the cafes in the city who rely on workers going in and out each day—that pay the price more than anyone else. So the piece of investment that this budget really needed was an investment in a national quarantine solution. We've seen proposals come week after week, including RAAF Base Learmonth and RAAF Base Busselton. The latest proposal is putting something at Perth Airport. Any of these would be a major investment in making sure that our small businesses, our family businesses and our microenterprises can continue to invest with confidence, because they will see the government doing what they should be doing, which is providing the sort of public health infrastructure that gives them the certainty and confidence to invest. It was August last year, almost a year ago, when the World Health Organization was warning about the dangers of hotel quarantine. For every 204 infected travellers in hotel quarantine there is a leak, which is practically one out of every 200. We know that just a few infections can lead to statewide or citywide lockdowns.

We've got business owners who are also bringing really good solutions to these problems. I met with Nigel Oakey, who many would know as the managing director of Dome cafes in Western Australia. If you have an electorate in Western Australia you probably have two or three Dome cafes. They have fabulous food, great coffee and it's a lovely place to meet friends and family or have a work meeting. Nigel has done some fabulous work in terms of looking at the best-practice solutions around the world. How do we make sure that we can prevent any transmission into the community? Because that's clearly what the Australian public expect right now as they are waiting months and months for vaccines—a problem that seems to get more complex, not less, as time rolls on. So I would encourage the Prime Minister and the health minister to reach out to Nigel Oakey and have a chat to him. He has ideas that would not just help Western Australia but help this whole country.

This budget locks in $1 trillion of debt with no plan and no time line to repay it. If a small business walked into a bank and said: 'I would like to take on a few million dollars of debt. I won't tell you when I will repay it. I won't tell you what the plan is. I'm not going to tell you where the revenue will come from. I'm not going to tell you where all that money is going'—given that we have all of these dark pools of funds and the government refuses to tell us what they're going to be invested in, where they're spending that taxpayer money—they would be laughed out of the bank. Indeed, businesses in Western Australia do find this government's financial management approach concerning.

When the member for Pearce was the Treasurer for Western Australia he locked in spending that resulted in $40 billion of state debt. We're now seeing that same reckless approach amplified on a national scale, locking in huge amounts of debt with no plan to repay it, just some sort of assurance that somehow this government are good financial managers. Well, after eight years there is absolutely no evidence that this government are good financial managers. We know that when they start trying to fix their financial mess they'll start cutting health, they'll start cutting Medicare and now even the New South Wales Liberal Treasurer wants to come after Western Australia's GST. It is not good enough. This government has no plan. It just has terrible ideas like cutting Medicare and stealing WA's GST.

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

In looking back over the past 15 months, Australians have weathered a storm on multiple fronts. The first global pandemic in a century plunged our economy into recession, and the outlook was certainly grim. Some of Bennelong's 23,000 businesses even had to shut up shop, and the typical bustle of people came to a halt as we did our best to stop the spread. In looking back now, Australia's recovery has been remarkable, with countries around the world watching in awe as we bounced back from recession and returned, more or less, to normality.

It was just last week that unemployment had fallen to 5.1 per cent, the same figure as reported in February last year. Economic growth has rebounded, and Australia is the only OECD country to have its GDP higher now than it was before the pandemic. As we bask in this astonishing recovery, it's a good time to reflect on how we got here. The Morrison government has remained committed to securing Australia's economic recovery since the onset of the COVID-19 pandemic. The rapid rollout of economic stimulus packages helped Australian families get by during the trying lockdown periods. Looking to the future, the 2021-22 budget has reinforced the government's sustained commitment to recovery, unveiling several important initiatives designed to foster economic growth and keep unemployment down.

This is a strong and generous budget, which will deliver an enormous amount to the people of Bennelong. One of the most important reforms of this year's budget is the enormous tax relief to be delivered across the board. The focus on supporting further job creation is revealed in the extension of the full temporary expensing and loss carry-back measures. These measures, initially announced in last year's October budget, have been extended for a further 12 months until June 2023. Temporary full expensing allows eligible businesses with an aggregated annual turnover of less than $5 billion to deduct the full cost of eligible depreciable assets. The temporary loss carry-back extension will allow eligible companies to carry back tax losses from the 2022-23 income year to offset previous tax profits as far back as the 2018-19 income year. It sounds dry, but this will be a huge shot in the arm—like the one I got on Friday—for local businesses. The initiatives together are expected to boost GDP by about $18 billion and create around 60,000 jobs by 2023. More than 23,000 businesses in Bennelong will now be able to write off the full value of any eligible assets they purchase. In addition around 9,800 local businesses can use the extended loss carry-back measures to keep their cash flows working smoothly.

For small businesses, the past 12 months have been extremely challenging. Our government has consistently recognised the importance of small businesses to the Australian economy. These new measures acknowledge the pressure they have faced and our commitment to ensuring that Australia's small businesses and medium-sized businesses can bounce back and return to strong growth over the next few years.

In addition to promoting the bottom line of local businesses, we're also promoting our enterprising inventors and innovators from Macquarie University, Macquarie Park and across the electorate. The patent box policy, which has been successfully introduced in 20 countries worldwide, will see the concessional tax rate for Australian developed and patented medical and biotech innovations effectively halved to 17 per cent. In May I had the pleasure of hosting the Treasurer, Josh Frydenberg, at Macquarie based Cochlear to showcase the incredible work they have been doing. Cochlear are the world's leaders in the technology and development of medical devices for the hearing impaired. Under the new patent box policy, companies like Cochlear will be encouraged to undertake even more research and development, creating local jobs and helping to secure Australia's economic recovery. Bennelong's Macquarie University is committed to fostering research and development into new and important ideas, processes and products. We hope to see the new policy encouraging local students to develop their medical and biotech innovations and bring them to the market.

I've said many times that Bennelong is the capital of innovation in Australia. Policies like this patent box will ensure that companies can continue to be at the cutting edge of research and monetise their discoveries. The future is bright for Australian innovators, and I congratulate the government for its work and its support of our local businesses at all levels.

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

This motion from Mr Thompson seeks to congratulate the government for its performance around business investment levels in Australia. I don't know what planet Mr Thompson and those opposite are living on, but, in case they haven't checked lately with the ABS statistics or indeed the RBA, business investment in Australia has fallen off a cliff since this government got elected. It's quite stark that it actually happened as soon as the Abbott government was elected in 2013. The share of nominal GDP that is taken up by business investment has fallen. The share of nominal GDP taken up by business investment was 18 per cent in 2013. Have a guess what it's fallen to today? Over the course of this government, it has fallen to less than five per cent in Australia. The fall is quite dramatic. It happened as soon as the Abbott government was elected, and there's a reason for that. The reason is that, once the Abbott government were elected, in their first budget they got rid of full expensing of capital equipment and extending those loss carry-back measures. They got rid of these measures that they're actually congratulating themselves on here today. It was only after a couple of years that they worked out, 'That was a bad decision; we're going to put them back in.' They were Labor policies, by the way. They're saying, 'We're going to put them back in, and we'll try and reverse the trend.' And, like a lot of things that this government takes on, it hasn't worked, and business investment has continued to fall in Australia.

I've got to say that when it comes to economic indicators, business investment isn't the only one. They're not alone on that, because, when it comes to nearly every other key economic indicator, Australia has got worse under this government. We all know that people's incomes aren't increasing. Real wages in Australia are actually falling, and the government admits this in the budget papers that they've just released. Over the course of the forward estimates, Australians are going to go backwards when it comes to their real wages. Labour productivity is the key to economic growth. If we're going to get our economy growing again, the key is to get more labour productivity into our system. Yet what has gone on with labour productivity? For the first time since we've been collecting data about labour productivity growth in Australia, it has actually fallen. So under this government Australia is producing less per employee than it has at any other time since we've been keeping records about labour productivity here in Australia.

We all know what's gone on with household debt in this country. It has exploded. It's at the highest level it has ever been. We're now third worst in the OECD when it comes to levels of household debt—principally around the issue of ballooning house prices, which are out of control once again. There has been a 20 per cent growth in house prices over the course of the last 12 months under this government. What are they doing to arrest that? What are they doing to make sure that younger Australians can get a leg into the housing market? They're introducing all of these first-home-buyer schemes. It's like pouring fuel on the fire; it's making it worse. Talk to any real estate agent throughout the country, and they'll tell you that whenever these first-home-buyer incentives are brought in you'll see record house price growth for the next 12 months. It's pouring fuel on the fire, and it's making it worse for younger Australians.

Wealth inequality is increasing under this government in Australia at the moment. When it comes to social indicators, we're going backwards on those as well. We've all seen what has come out of the aged-care royal commission: vulnerable elderly Australians have been abused, the aged-care waiting list has ballooned and people have died waiting for aged-care packages in this country. When it comes to the NBN, Australia ranks 61st in the world for download speeds. That's something to be proud of, isn't it? We're 61st in the world when it comes to the speed of our internet, and it has fallen year after year after year under this government. In business investment, a key thing is research and development spending. Guess where that has gone under this government? In 2013, it was 2.1 per cent of GDP; it's now 1.79 per cent of GDP.

Under this government, Australia has gone backwards in every single economic indicator. I don't know what world those opposite are living in. You can't come into this chamber and congratulate yourself for business investment when it has actually fallen under your government.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.