Julie Collins (Franklin, Australian Labor Party, Minister for Small Business) Share this | Link to this | Hansard source

The Albanese government is delivering a better deal for small businesses, easing current cost pressures and helping them to improve their long-term resilience. This bill delivers on two key elements to support small business.

Schedule 1 will implement a $20,000 instant asset write-off for businesses with a turnover of up to $10 million. This will help small businesses to invest and grow, for example, through buying a new piece of machinery, or upgrading their assets. The $20,000 threshold will apply on a per-asset basis, so small businesses will be able to write off multiple assets. Assets that are first used or installed, ready for use, between 1 July 2023 and 30 June 2024 can be immediately deducted under this measure. Whether it's a coffee machine for a cafe, a computer to manage a business or a trailer for a tradie, this measure will provide real support for small businesses. We estimate this will provide around $290 million in cash flow support to small businesses right across the country.

Schedule 2 of the bill will implement the Albanese government's small business energy incentive and complement the instant asset write-off. This is a 20 per cent bonus tax deduction to help small and medium businesses invest in energy efficient assets and upgrades to improve their long-term resilience and to save on their energy bills. We estimate up to 3.8 million businesses with a turnover of up to $50 million will be able to claim a 20 per cent tax deduction for total expenditure of up to $100,000. This will help pay for upgrading heating and cooling systems, installing batteries and switching to energy-saving electrical goods, such as efficient fridges and induction cooktops.

This incentive helps ensure small and medium sized businesses share in the benefits and opportunities of the energy transition that's now underway. It will support investments that deliver ongoing power bill savings for businesses, while at the same time helping Australia lower our emissions. Eligible assets or upgrades will need to be either first used or first installed and ready for use between 1 July 2023 and 30 June 2024. This measure is expected to provide around $310 million in support to SMEs over the forward estimates. The incentive has been specifically timed to help small businesses lay the foundations for their future growth. These are targeted, responsible support measures to help Australia's small businesses continue to grow.

This builds on a range of measures that we're taking to support small businesses more generally: targeted energy bill relief of up to $650 for around one million small businesses, in partnership with the states and the territories; making unfair contract terms illegal so small businesses can negotiate fairer agreements with larger partners; the $23 million that we've put aside to help small businesses build their resilience to cybersecurity attacks, through a new Cyber Wardens program; $18.6 million to help small businesses adapt and build resilience through digital technology, through the latest round of the Digital Solutions program; $15 million for small-business owners across Australia to access free mental health and financial counselling support; and ensuring small businesses get a bigger slice of the $80 billion the Australian government spends each year on contracts, with a 20 per cent target for government procurement.

This year I have met with small businesses in every state and territory, in the cities and in the regions. I've already brought together small-business ministers on three occasions to ensure we're working together to support Australia's small businesses. Our last meeting, which was held in Cairns last month, was the first one hosted outside a capital city. This is after the previous government failed to hold such a meeting for eight years. This just shows how our government is delivering and working with states and territories to deliver a better deal for small businesses. I'm proud that the measures we're introducing today will directly help many businesses. Backing in small businesses is part of the Albanese government's plan to build a stronger, sustainable and more resilient economy that delivers more opportunities for Australians. I commend the bill to the House.

Luke Howarth (Petrie, Liberal Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

This instant asset tax write-off is inadequate. We've just heard the minister say how great it's going to be for small business, but it is not high enough—$20,000 is not high enough for small business. You cannot buy a vehicle; you can't do a whole lot of things. The previous instant asset tax write-off was $150,000, and they're bringing it down to 20 grand! What's that going to get businesses? Not a lot. It wouldn't cost the Albanese Labor government a lot of money to adopt our amendment and raise the write-off to a higher amount than $20,000. I say to the minister: go and see your boss, the Prime Minister, and raise it a little bit higher. It's not going to cost a lot of money at all. It's actually very modest.

You cannot buy a vehicle for 20 grand. A lot of companies need a vehicle, right? I know you mentioned a coffee machine, but, come on—20 grand is not going to get you much at all. The truth is that Labor are pretty well antibusiness, particularly small business. Small and family businesses—they don't care about them. When it comes to tax, industrial relations and energy, it's leaving small and family businesses behind. That is the absolute reality. Small business employs almost half of Australia's private sector workforce and represents over 97 per cent of all Australian businesses. The issue is that, since the Albanese Labor government came to power just 18 months ago, small businesses have all but been abandoned in Labor's draft national platform and are very much an afterthought in each budget: What can we throw in there? What bone can we give them?

Labor's national platform, 114 pages long, mentions small business just five times. Labor have consistently turned their back on this community. In total, Labor, including the member opposite, voted against tax relief for small and medium businesses 15 times in the last parliament. They voted against it and denied tax relief to millions of small and family businesses around Australia. Now the current Treasurer, Treasurer Chalmers said at the time that the small-business tax cuts that the coalition government was putting in to help small and family businesses were 'not worth the money' and that Labor was 'proud to oppose these tax cuts'. That's from the Treasurer. The reality is that the Treasurer of Australia was proud to oppose tax cuts that would have benefited hardworking small and family businesses. Why? It's because their friends in the union movement, who are the real government of Australia, don't like small and family business, because they can't unionise it. Even in this bill, we see a special deal for big super funds that the unions run that don't apply to small self-managed super funds and some of the other funds.

Under this Prime Minister and this Treasurer, small and family businesses are suffocating. The Small business matters report shows that 43 per cent of small and family businesses are making zero profit—the worst rate since the last time Labor was in government back in 2012—and about 75 per cent of small-business owners earn less than the average Australian wage, despite working longer hours.

When people run a small business, you want them to earn a wage just like PAYG employees and just like we do in the parliament. You want them to earn a wage, but you also want that small and family business to make a profit after all their expenses, after their rent, after the wages for their staff, after their superannuation, after they buy their goods, after their insurances, after their electricity that's going up under the Albanese government—the list goes on and on and on. You want them to make a profit so that the profit can (1) be reinvested and (2) provide a dividend.

On this side of the House, we will look after small and family businesses, because many of us on this side have experience in the private sector. We haven't just gone from uni to working for unions or straight into parliament like many of those opposite have. The coalition values reward for effort. We thank small and family businesses for employing Australians. While this bill has some measures that we can support, quite frankly it doesn't make up for Labor's broken promises and lack of support and bad attitude to small and family businesses as a whole.

This year we saw a huge tax blow that's going to see tradies and small businesses across Australia pay more, and I'm talking specifically about the instant asset tax write-off. The chief economist of Judo Bank, Mr Warren Hogan, said that 'you will see some parts in certain industries really struggle' under this government.

The Albanese government has slammed the brakes on the amount small businesses can claim in relation to the instant asset write-off, down, as I said before, from $150,000. In fact, during COVID, it was unlimited. Before COVID, it went up to 150 grand. They're bringing it all the way down to $20,000, and the minister, who just spoke, comes into this place and makes out that it is some sort of win for small businesses. No, it's not. It's not a win. Twenty thousand dollars is not high enough.

If I think about businesses in my own electorate—I was talking to Wayne Treloar from Ray White Aspley and Ray White Bridgeman Downs group, who in the last financial year, when they could claim up to $150,000, bought four cars for their rental property business. Each car was $22,000. Under this minister, they won't be able to write that off. It'll take them years to depreciate.

Photocopiers—do you know what a photocopier costs in a business now? Given inflation, particularly under this government, it costs 25 grand for a decent photocopier. You can't write that off under Labor's instant asset tax write-off. That's what that Ray White business bought in my electorate, and they were able to write it off under the coalition's reforms.

Designer Life is another local business. They're not operating now under the NESM scheme in my area of Somerset, but they are in other areas. When I was talking to them last year, when I was assistant minister in this space, they bought cars as well. They spent $30,000 to $32,000 on a car. You can't get a car for 20 grand, in case the minister hasn't worked that out. They had to buy computers in bulk order when they had 20 staff and everything. They spent $74,000 on their computer system. Under the coalition's system, that was written off straightaway. Premier Pet in Narangba is another business in my electorate. It is a pet supplier to pet shops all around Australia. They put in commercial air conditioning for their staff, and it cost $25,000. Once again, they could write it off. Then these guys come in here and get up and speak as though $20,000 is some sort of a win for small and family business. It's not.

The point that frustrates me is that they could adopt our amendment to raise it to $30,000. We're just talking $10,000 more. We're not asking for it to go back to $150,000, where it was under the former coalition government. We're asking for it to go up just $10,000. It would not cost the Treasurer much at all—very, very little—but it would have a big impact during this cost-of-living crisis that small and family business and people are experiencing under Labor. That would make a difference. For once do you think the minister might be able to think: 'You know what? We could raise it by just $10,000. That's not a bad idea.' It's not a bad idea, but, from her speech when she was in this chamber just a minute ago, it doesn't seem like she wants to listen. It just shows how out of touch the Labor government is with what's going on in Australia right now, not just in Australian families, who are doing it tough, but in hardworking small and family businesses throughout the country.

The shadow Treasurer, Angus Taylor, understands small business and family business, and he was shocked to see in last year's budget that the extension of the instant asset tax write-off was gone. It was just gone—wiped. Then they come back in here a few months later and say, 'We're giving them a win.' No, you're not. This is a big deal for small and family businesses. If this is the government's version of refining the tax system for small and family businesses, they should be deeply worried. Australians need a government that focuses on the economy first, not on distractions like the Canberra Voice, which not one state in the country voted yes to. The coalition's amendment restores the instant asset tax write-off to levels introduced in the 2019 budget. The amendments will mean that 26,500 businesses with an aggregated turnover of up to $50 million will be eligible for a higher instant asset write-off of up to $30,000, and that would benefit them. It also, as I said before, is a very, very modest cost. It will drive productivity at a time when we're seeing historic collapses under the Albanese Labor government, and it stands in stark contrast to the extra $188 billion that the Labor government are spending, which is putting extra pressure on inflation, which families know about through increased rent and housing costs.

I want to quickly touch on their superannuation tax changes as well. This bill doesn't make up for Labor's broken promises. We know that members opposite were elected to this House on the promise that there would be no changes to superannuation. It was broken within the first 18 months. They somehow want the Australian public to believe, 'We're legislating it now, but it doesn't kick in until the next election.' No. There will be no changes to super. That's what you looked down the barrel of the camera and said, Prime Minister. He also said there would be a $275 reduction in electricity costs. Guess what? They've gone up 18.2 per cent. The minister comes in here and says, 'We're going to give small business a little bit of a benefit to upgrade some of their electrical costs and to put in lower lighting or solar,' or whatever. That's great, but that's not what you promised before the last election. You promised households a $275 reduction.

There wouldn't be one member opposite who would get up in this place right now and say, 'We're going to achieve that $275 reduction.' For a little while they were saying it would happen 'by the next election' in May 2025. None of them believe that. It's gone up 18 per cent. Gas has gone up 28 per cent. People are coming into my office. They're feeling the cost of living, but the government has been focused on the Voice for 18 months. Then, all of a sudden, they're like, 'We're concentrating on the cost of living.' Meanwhile, everyone's rents have gone up. Their mortgages have gone up. Their electricity has gone up. Their groceries have gone up. The government are slashing instant-asset tax write-offs for small businesses. This is what you get under a Labor government that doesn't care about small and family businesses and are focused on themselves.

So it is disappointing, and it doesn't end there. They promised lower mortgages. Minister Conroy, when it comes to the defence industry, said, 'We want to see more Australian manufacturing in the defence industry.' We just had the biggest three-day show in Australia for the Navy in Sydney last week. He knew about it for a year and couldn't even be bothered to show up. This is the defence industry minister, who can't be bothered to show up to his own show and talk to people in relation to the defence industry. Minister Husic pretty much abandoned the space industry. You would know about that Deputy Speaker Andrews—you were a former minister there, where a lot was done.

The government's proposal has three flaws. It's a broken promise from before the election, where Prime Minister Albanese explicitly ruled out changes to super. It is an index, which affects young Australians like my children, who are 21, 19 and 17—and many of us have children that age and represent people. The reality is that this will bite them, because, by the time they retire at 67 and with the way inflation is at the moment, they're all going to be getting less in their super. They're going to be getting way less. Even the Treasurer and his own department have shown that a 20-year-old today earning an average wage over their lifetime will pay higher taxes under this scheme.

Finally, it is taxing unrealised capital gains, which means that retirees and superannuants will face tax bills on money they haven't even earned yet. People invest in super; they might have a self-managed super fund. The price of their property has gone up, and they haven't sold it. Normally when you sell the asset, you pay tax on it—not under this government, under Albanese. What they want to do, under this Prime Minister, is make you pay tax on unrealised capital gains before you have even sold it.

It's a complete change to the way things are done. It would be like someone in this parliament or one of our constituents having a rental property—owning that rental property—and there being a 50 per cent capital gains discount so that, when you sell it, you pay tax on half the profit. Under this one, they'll just say: 'Your rental property has gone up during COVID. Give us $100,000 now, an unrealised capital gain.' I'm surprised that any member on the Labor side can get up with a straight face and say that this is good for Australians in the middle of the worst cost-of-living crisis that we've seen in generations.

Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Link to this | Hansard source

I'd like to call the member for Petrie up on a couple of misnomers and fact check him. The thing that I would say is that, when I was campaigning in the last federal election, the three top issues for businesses were skills shortages, supply chains and action on energy and climate change.

On supply chains, what we saw during the pandemic is that the nation was broken because we had nine years of a coalition government that wasn't interested in investing in the skills and capabilities of the nation. The thing that we saw during the pandemic was that we did not have the ability to—

Opposition Member:

An opposition member interjecting—

Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Link to this | Hansard source

I'm talking about manufacturing—

An opposition member: How would you know? You weren't even there.

I was in Australia, and I have firsthand lived experience, okay. What we saw in Western Australia was that we didn't have enough face masks in our hospitals. Do you know who built them? We couldn't get them from overseas. We had local manufacturers that decided to actually do that. So what we're in the process of doing is building up our advanced manufacturing capability.

The other thing that we also saw was skills shortages, and the truth is that what we saw under the coalition, from an immigration perspective, was that skills were cut out of the department. We had a reduction from 1,200 to 800 staff members. What did we see in the immigration system? We saw a massive backlog, and that's something that we've been actively working on.

The other thing that we saw was a coalition government that was denying that climate science was a reality and that we needed to act on our energy policy. That's something that this government did within the first two weeks of government. We went in and we basically said that we wanted to see action on climate change. We legislated that we would reduce greenhouse gas emissions by 43 per cent. If we had had a government 10 years ago investing in renewable energy and offsetting some of the issues that we have seen with gas prices in the Ukraine, we would have been in a better position. What this government is doing is investing in our energy infrastructure to make sure that small businesses, large businesses and households can have a decarbonised electricity grid that is not dependent on the opinion of a dictator over in Russia.

What I would also say is that when we saw these issues across Australia we said that we wanted to bring community groups, small businesses, large businesses, unions and the governments together—and we had a Jobs and Skills Summit. It was the first time that we had brought these disparate groups across Australia, and we went: how can we make Australia better to make sure we have great businesses with great jobs, with the skills that we need to deliver? So we did that.

The truth is that what the Albanese Labor government want to do is make sure that we support small businesses. That's why I'm very excited to speak in favour of the treasury laws amendment bill, which is about support for small businesses and charities.

There is no doubt that small businesses are the engine room of the Australian economy. Small businesses employ a huge number of Australian people, and this is why this government is delivering significant reforms to support small businesses across Australia.

The reforms announced by the government in last year's budget will help to boost resilience for small businesses. The range of practical new measures contained in the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill will help small businesses across the nation to prosper. When small businesses prosper, families prosper. When small business prospers, the economy prospers. When small business prospers, the whole nation prospers. But small businesses have a unique challenge that the government is aware of. That's why the government is taking proactive action to support small business with important measures.

Schedule 1 of this bill will implement a $20,000 instant asset write-off for one year. The new measure will operate to improve cash flow and reduce compliance costs for small businesses. What it means is that small businesses will aggregate annual turnover of less than $10 million and be able to immediately deduct eligible assets costing less than $20,000. This will be effective from the 2024 financial year. The $20,000 threshold will apply on a per asset basis. This means that small businesses can instantly write off multiple assets. It's targeted, it's responsible and it will help small businesses continue to grow—and growth means stability and jobs and security.

Schedule 2 of the bill will introduce the small-business energy incentive. The incentive was also announced in the 2023-24 budget. The measure is designed to help small businesses and medium sized businesses electrify and save on their energy bills. The new measure will affect up to 3.8 million small to medium sized businesses with an aggregated annual turnover of less than $50 million. These businesses will have access to a bonus 20 per cent deduction for eligible assets supporting electrification and more efficient use of energy. The truth is the thing that we're going to see, as electricity prices are reduced because the amount of renewables that we have in the grid, is that there will be a shift in businesses from using gas to using electricity. So the electrification of these businesses is really important, and it's also a step in the right direction to reducing our greenhouse gas emissions.

The new tax incentive applies from the 2024 financial year. Up to $100,000 of total expenditure will be eligible for the incentive, with a maximum tax bonus of $20,000. The new small-business energy incentive builds on the Albanese government's measures to help small businesses become more energy efficient. The program will ease pressure on their energy bills. It's another example of the Albanese government ensuring that we're supporting many Australians with expenditure relief so that they can enjoy the rewards from their work.

The Albanese government are taking action where the previous government didn't. The previous government overlooked the needs of small business. It didn't foster an environment for growth. Instead it stifled productivity through inaction, apathy and indifference—indifference to the needs of small businesses, indifference to the needs of Australian families and indifference to the needs of the nation. We now have a government that's responsive, proactive and focused—focused on the needs of small business, focused on the needs of Australian families and focused on the needs of the nation. We will continue to incentivise the nation's growth and make real benefits for all Australians.

This bill also introduces measures to support charities, and I think that all of us in this place can agree that we need to support charities better. In my electorate of Swan, there are over 400 charities. They range from religious organisations to those supporting the homeless, animal rescues, Indigenous support organisations and RSLs. Charities not only provide a valuable resource for vulnerable people; they also play a role in bringing the community together. They are an outlet for people to overcome loneliness by getting involved in volunteering.

The government recognises the importance of charities across the country, not just in Swan, and it has set itself a goal of doubling philanthropy by 2030. To do this, it needs a legislative framework to achieve this goal. Schedule 3 of the bill provides a pathway for up to 28 community foundations to be endorsed by the Commissioner of Taxation as deductible gift recipients. Their endorsement will be subject to them complying with ministerial guidelines setting out the purposes for which these gifts may be used. They will support foundations to undertake important work in their communities.

Schedule 4 of the bill amends the income tax law to specifically list Justice Reform Initiative Ltd and Transparency International Australia as deductible gift recipients and extends the existing listing for the Australian Sports Foundation Charitable Fund and Victorian Pride Centre Ltd. The Australian Sports Foundation is a valuable pathway for grassroots organisations to fundraise. It has significant success in supporting many local clubs and individual athletes achieve their dreams of competing on the national and international stage. I welcome the amendment that will further extend the capacity of organisations, such as the Australian Sports Foundation, to support our local clubs and junior athletes. This encourages philanthropic giving and supports the not-for-profit sector, as donors may claim income tax deductions for donations to organisations with DGR status.

Schedule 5 of the bill extends the Global Infrastructure Hub's income tax exemption for an additional year. It will mean that it will be extended from its current expiry date of 30 June 2023 to 30 June 2024. The extension will ensure that contributions and other income that the GI Hub received during the FY24 period will be exempt from income tax. Tax exemption status is granted to avoid subjecting these payments to income tax, because the GI Hub is funded by contributions from G20 members. This one-year extension will cover the GI Hub while it utilises current funding from its G20 members.

Amendments to the income tax law with respect to general insurance, to maintain broad alignment between accounting and tax, are implemented by schedule 6 of the bill. It's a provision that avoids the income tax compliance burden on the general insurance industry. The burden would be caused by the misalignment between the new accounting standard and the existing tax requirements. However, the government anticipated the impact and addressed the problem. It is a thoughtful, responsible and well-managed reform.

The current non-arms-length expense rules for superannuation entities is replaced by schedule 7 of the bill. It's a measure contained in the bill that will introduce new arrangements for general expenses and better target the application of these provisions. I'm pleased that these measures will operate to address the potential for very disproportionate outcomes. But, importantly, at the same time, it maintains the broader integrity of the superannuation tax system. Again, they are thoughtful, responsible and well-managed reforms.

The last provision, in schedule 8, clarifies the authority and jurisdiction of the Australian Financial Complaints Authority, AFCA, to consider complaints that relate to superannuation. The measure is required to provide a legislative response to the Federal Court's decision in MetLife v AFCA. Consumers will gain greater access to external dispute resolution, and I will say this: they're thoughtful, responsible, well-managed reforms, with the consumer at the forefront.

These measures form part of a reform package that will incentivise and foster growth among small businesses. This is a package that will support the role of community foundations and allow them to grow and explore new opportunities for funding and donations. These are foundations that are reliant on donors for their survival, to fund the important work they do in the community. Many of them are supporting vulnerable community members. This bill is an example of the Albanese government thinking broadly about the flow-on effect for the wider community, with smart, effective reforms.

Being responsive to the needs of the Australian people is what this government is about. What this government is not about is sitting back and doing nothing, which I feel is what the previous government did. It coasted at the expense of all Australians. This is a government that acts. These reforms will help small businesses, charities and community foundations continue to grow, to support jobs growth and support families. The bill will help contribute to stronger communities and better services, through small business and supporting our local clubs and charities. This is a goal for this government, and we are committed to achieving it. That's why this legislation is here today.

I commend the government for its advocacy and efforts to make sure that we respond to the needs of Australians, not sit back on our hands like the previous government did. I congratulate the ministerial team who have brought this forward today. I commend the legislation to the House, and I look forward to contributing further to the debate on this important legislation by a government that's not afraid to take action and make Australia a better place.

Helen Haines (Indi, Independent) Share this | Link to this | Hansard source

I rise to speak on this bill, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, in particular schedule 2. Schedule 2 relates to the government's small-business energy incentive, which is a bonus tax deduction equal to 20 per cent of the cost of an energy efficiency or electrification improvement. The incentive is designed to help small and medium businesses electrify and save on their energy bills. This temporary measure applies from July 2023 to June 2024. It aims to help small businesses make investments, like electrifying heating systems, pumps or motors; upgrading to more efficient fridges or air-conditioners; installing heat pumps and batteries; and devices to shift electricity consumption to off-peak hours.

There are 3.8 million businesses across Australia, with an annual turnover of less than $50 million, that are eligible for this tax deduction. In my electorate of Indi, almost 15,700 businesses will be eligible, and I'm excited for them. I strongly welcome this schedule within the bill, as for years now I've been calling for wideranging assistance to help businesses and households improve their energy efficiency and electrify. Energy efficiency and electrification are our best options for reducing our energy bills and reducing emissions.

As an Independent MP, I'm committed to smart action on climate change, not just because it's good and needed for our planet but because we know that renewables and electrification mean people save money. In my communities, people are really struggling. For small-business owners, the rising cost of living hurts twice—in household bills and in the bills and costs of running a business. They want to keep their prices down and they want to be more efficient and innovative, and I back them in on that 100 per cent. This measure will help small-business owners, many of whom are mums and dads who work hard and employ others in our communities, to save money.

Reducing the costs of a battery and more efficient equipment could be transformational for businesses like the IGA in Euroa. Last year, I spoke with Tim Burton, who's taken over the business from his dad. With costs rising all the time, keeping power prices down is one of the biggest issues for Tim. Tim told me that, due to the poor power network in Euroa, their supermarket has blackouts at least once a month. They've put so much solar on the roof that they've run out of space, and they've had to add a backup diesel generator to deal with blackouts and brownouts. Assistance to purchase a battery could help Burton's IGA use their solar to run fridges at night and during blackouts, while more efficient fridges would help reduce bills and the reliance on the weak local grid, or indeed on their diesel generator.

Right across Indi, businesses like Tim's are telling me that rising electricity bills are making running a small business increasingly challenging. There's a clear hunger for incentives to help businesses reduce their energy bills. This hunger was validated by the flood of applications for the recent energy efficiency grants for small and medium enterprises. Across my electorate of Indi, 24 local businesses will share in $554,906 as part of the energy efficiency grants for small and medium sized enterprises program. These businesses will use the money to replace or upgrade existing equipment to improve energy efficiency and reduce costs. Financial support, such as the recent energy efficiency grants and the small business energy incentive in this bill, empowers small businesses to manage their energy use and to reduce their overall power bills.

Many businesses across my electorate have solar, such as Burton's IGA in Euroa, and I hope this bill will assist these businesses to install technologies that will help them make the most of that solar by shifting more of their electricity use to the middle of the day or by installing a battery to store electricity from their solar for use throughout the day and night. For the many wineries, dairies, orchards, food processors and hospital venues across Indi, fridges, chillers, water heaters, pumps and other motors are the biggest users of energy, and there are major opportunities for energy efficiency improvements across all of these energy users. For example, Dal Zotto winery, in the King Valley, will be using the grant funding received by the energy efficiency grants for small and medium sized enterprises program to insulate tanks and piping, reducing the energy used to run fridges and chillers and allowing more solar to go back into the grid.

Now, while this incentive in this bill is exciting for small businesses across Indi and indeed across Australia, it's really disappointing that this measure is temporary and will only apply for one financial year. With just over seven months remaining until 30 June 2024, the deadline for equipment to be installed and ready for use—this is just too short if a business is to receive this tax offset. Given constrictions in supply chains and access to skilled labour in our regions and the uncertainty to date over whether this tax offset would actually be legislated, many small businesses won't be able to access this support or will deem it too risky to initiate a project without certainty that they'll be able to receive the tax offset. This should be a long-term measure that allows small businesses to make investment decisions they can plan for over much longer time horizons. Anyone who's ever run a small business would know this, and they would know that big investment decisions, like those incentivised in this bill, aren't rash and aren't last-minute calls; they form part of years of business planning. So making a measure like this temporary and applicable for such a short amount of time honestly feels half-hearted.

Beyond making this a long-term measure, we know the government must do much more to support households and businesses reduce emissions, reduce bills and increase efficiency. The Grattan Institute, the Climate Council the Climateworks Centre, Rewiring Australia, the International Energy Agency and almost all other expert bodies are unanimous: households and small businesses must increasingly electrify if we're to have any hope of getting to net zero carbon emissions by 2050. This might seem like an impossible task, but it's not. It's a big task, it's a difficult task, but we do have the solutions in front of us. This requires electric cooktops, electric heat pump heaters, water heaters and electric vehicles, as well as batteries in our homes and businesses to store the electricity these appliances need to run. This must happen in houses, apartments and businesses. It must happen for landlords and the one-third of households who rent, for businesses that own their premises and for those that lease. It must happen in the cities and it must happen in the regions. And it must enable low-income people and small family businesses to share in the benefits of this transition.

There are multiple benefits to homes and businesses in electrification. Firstly, importantly, in this cost-of-living crisis that we face, energy efficiency and electrification reduce bills. Analysis by energy entrepreneur Dr Saul Griffith shows that a fully electrified household would save $5,000 a year in petrol costs and power bills. Businesses are set to save even more. Electrification is also healthier: we know that using gas releases pollutants that cause asthma and other problems, but with high upfront costs, we can't expect individuals and businesses to electrify on their own. The government can and must do more to support households and businesses to do this, and that's why I support this bill and will continue pushing for additional measures and for the government to do better for small business.

People across my electorate of Indi are aware of the benefits of electrification and energy efficiency. With the interests of my constituents—and of people and businesses across Australia—always front of mind, I have consistently called on the government to do more to unlock the opportunities of electrification and energy efficiency, and I've proposed legislation and engaged constructively with governments of the day—before and now—to do so. I introduced my private member's bill, the Renewable Energy (Electricity) Amendment (Cheaper Home Batteries) Bill in 2022 and again this year. My bill aims to lower power bills for Australian households and small businesses, reduce emissions, and improve energy security by adding small-scale batteries as eligible technology to create certificates under the Small-scale Renewable Energy Scheme. The SRES was originally developed for rooftop solar so that when you buy solar you earn certificates to on-sell to electricity retailers, who are required to purchase them. This drives down the cost of installing solar and creates a financial incentive for individuals and businesses to purchase renewable energy. The SRES has now also expanded to small-scale wind and hydro systems, solar water heaters, and air-source heat pumps. However, perplexingly and astonishingly, it continues to leave out batteries, and this needs to change.

Current market and government expectations and aspirations are that the renewable energy share of our national electricity grid will reach 82 per cent by 2030. Increased storage capacity on the grid via batteries is critical to enabling this high penetration of renewables into Australia's electricity mix and to maximising the benefits of electrification. However, a lack of financial incentives for small-scale batteries has resulted in a significant gap in the current residential and small-business electrification landscape. Around three million Australian homes have solar panels; however, only 180,000 have a battery. According to green energy markets, the 82 per cent target assumes that the cost of small-scale batteries will be subsidised this decade, so I say to the government: get on with this. If small-scale batteries are included in the SRES, the price of a battery is reduced by about $3,000, depending on the size of the battery. This would incentivise many Australian homes to take up batteries and reach the 82 per cent target. I welcome the government's proposition in this bill to include batteries as eligible technologies for a 20 per cent bonus tax deduction for small and medium businesses. A 20 per cent bonus tax deduction on the cost of a small-scale battery would reduce a business's taxable income by around $3,000. For many businesses, such deductions could tip the balance in favour of investing in batteries and other technologies. I'm optimistic about what improvements this new tax incentive can unlock and how it can set up local businesses across Indi to cut costs, cut emissions and thrive, but I want to see the government extend it.

This incentive is a step in the right direction, but it is by no means enough to address the energy bill pressures that businesses and households are facing, and it is by no means enough to enable Australia to meet its emissions reduction targets. We need much more than temporary measures; we need permanent incentives to help businesses and households electrify and improve their energy efficiency, including households and businesses that don't own their own homes or premises. With these incentives we need to include all technologies that can reduce emissions, including electric vehicles, and we need to ensure—we absolutely must ensure—that low-income households are not forgotten.

Anne Stanley (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make my contribution to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. The bill contains a comprehensive package of measures to continue the government's substantial support for Australian small businesses. The Albanese government knows that small businesses are the lifeblood of our economy and of many communities across the country, including Werriwa. These measures build upon the significant support provided to small businesses in the last budget to invest in the security and certainty of operation that we know small businesses need to grow. Incentives in this package will help ensure that small businesses—the tradies, restaurants and hairdressers that make up the backbone of all of our communities across the country—share in the economic benefits of the transition to cleaner and more efficient energy.

The amendments are contained in eight separate schedules. Schedule 1 extends the instant asset write-off threshold to $20,000 until 30 June 2024. This was announced by the government in the 2023-24 budget. This will improve cash flow and reduce compliance costs for small businesses. From 1 July 2023 until 30 June 2024, small businesses will be able to immediately deduct eligible assets that cost less than $20,000 if they have had an aggregated turnover of less than $10 million. Small businesses will be able to instantly write off multiple assets, as the $20,000 instant asset write-off will apply on a per asset basis. Assets that cost greater than $20,000 may continue to be placed into the small business simplified depreciation pool. This allows an asset to be depreciated at the rate of 15 per cent in the first income year and 30 per cent for each income year after that. This instant asset write-off measure will provide significant cash flow support and the benefits of simplified compliance to up to 3.8 million small businesses. The measure is estimated to decrease receipts over five years, from 2022-23, by $290 million, which represents a nearly $300 million investment directly into small businesses across the country. This is a significant sum that will appreciably boost the growth of small businesses.

Schedule 2 provides further cost-of-living relief for small businesses by implementing the small business energy incentive the Albanese government announced in its recent budget. It will help small and medium sized enterprises electrify and save on their energy bills. Those 3.8 million small businesses will be eligible to access the small business energy incentive to help support investments that will provide long-term and ongoing electricity bill savings. Additionally, it will help Australia lower emissions by helping small businesses make investments in batteries, electrification of heating and cooling systems, and upgrading to more energy efficient assets such as fridges and induction cooktops. Businesses with an aggregated turnover of less than $50 million will have access to an additional 20 per cent tax deduction for a broad range of eligible assets that support electrification and the more efficient use of energy. The measure will begin on 1 July 2023 and end on 30 June 2024. The measure is estimated to decrease receipts over five years by $310 million and similarly represents a substantial investment in small business and emissions reductions.

Schedule 3 of this bill gives up to 28 community foundations the opportunity to be endorsed as deductible gift recipients by the Commissioner of Taxation. Foundations will be eligible for DGR endorsement if the charity is registered with the Australian Charities and Not-for-profits Commission, has purposes that are consistent with general DGR guidelines, complies with the ministerial guidelines created for the purposes of this measure and is subsequently named in a ministerial declaration. Ministerial guidelines clarifying the purposes for which the foundations may apply for this status and the specifications of the minimum annual expenditure on charitable purposes and grants to other organisations will be released following consultation and will be subject to parliamentary oversight and scrutiny. This will provide organisations and supporters with clarity and certainty in relation to their DGR status. Under schedule 4 of the bill, Justice Reform Initiative Ltd and Transparency International Australia will be specifically listed as having DGR status. The existing DGR status of the Australian Sports Foundation's charitable fund and the Victorian Pride Centre will also be extended. The income tax extension granted to the Global Infrastructure Hub will be extended for an additional year, from 1 July 2023 to 30 June 2024, under schedule 5 of the bill. The GI Hub is funded from contributions made by G20 members. To avoid those contributions being subject to income tax, this exemption is granted.

The government is proposing further amendments to income tax law in schedule 6 of the bill with respect to general insurers to provide alignment with the AASB 17 accounting standards. This measure was also announced in the government's 2023-24 budget. The measure will alleviate the compliance burdens for general insurers from maintaining two different systems of record keeping, one for the purpose of tax and the other for accounting purposes. It will have effect for the income years commencing on or after 1 January 2023. The current non-arms-length expense rules for superannuation entities are replaced by schedule 7 of this bill by introducing new arrangements for general expenses and better target the application of these provisions. The current rules contain the potential for disproportionate outcomes that will be addressed by the measures in the bill while maintaining the broader integrity of the superannuation tax system.

There are additional concerns that when general expenses of a fund are determined to be non-arms-length, all fund income would be taxable at a 45 per cent rate. The measures in this bill will limit the amount of income which can be taxable at the 45 per cent rate due to a non-arms-length expense to a proportionate amount for self-managed superannuation funds and small APRA regulated funds. Large APRA regulated funds will, however, be exempted from the non-arms-length expense rules. This is to account for lower tax integrity concerns with this class of fund and additionally will lower their compliance burden. The rules were first introduced in the 2018-19 income year, and these changes will apply from the same income year.

The government is clarifying that the Australian Financial Complaints Authority, AFCA, has the jurisdiction to consider complaints that 'relate to superannuation'. It was held in MetLife v AFCA [2022] by the full court of the Federal Court that AFCA did not have jurisdiction over complaints relating to superannuation unless the complaint was specifically listed in section 1053 of the Corporations Act as a 'superannuation complaint' rather than simply relating to superannuation. This restrictive interpretation of section 1053 is not one that reflects the original policy intent of the section. The intention was to provide AFCA with the statutory power in relation to the types of superannuation complaints in section 1053, not to severely restrict the range of complaints relating to superannuation that could be heard by AFCA. The bill contains significant financial incentives for the small businesses that the Albanese government understand are the lifeblood of our community. It continues to provide substantial support for tradies, restaurants, hairdressers and all the other small businesses to have a greater share of the economic opportunities in our country. I commend the bill to the House.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

Small business is the heart and soul of the country and of my electorate of Casey. Small businesses are crucial to the Australian economy due to their contributions to employment, innovation, regional development, diversity, entrepreneurship, customer choice, tax revenue, export opportunities, community engagement and overall economic resilience. Supporting and nurturing the small business sector is essential for a healthy and robust Australian economy. This bill, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, implements a range of changes to small business tax incentives, charity tax arrangements, superannuation complaints, superannuation transfer price rules and tax treatment for insurance.

I want to concentrate on the elements around small business. When I put my hand up to be a member of parliament, it was for many reasons, including to represent my community that I grew up in and dearly love. But it was also to bring small business knowledge and experience to this place to make sure laws were made to support small business, to protect small business, to nurture small business and to ensure the voice of small business is heard in this place. Labor's anti-business agenda on tax, on industrial relations and on energy is leaving small and family businesses behind.

Unfortunately, insolvency and bankruptcy are on the rise. Business is facing a challenging time of rising costs, rising inputs, supply chain pressures and decreasing revenue. Since Anthony Albanese has become Prime Minister, small business has been all but abandoned in Labor's draft national platform, and it is an afterthought in each budget.

The small-business community has been feeling invisible for the last 18 months. The unfortunate reality is that the Minister for Small Business has never run a small business and she rarely engages with them. It's symbolic that today, when the minister spoke, she had 15 minutes to talk about small business in this place and she spoke for five minutes. It's not always about quantity, but the quality was lacking as well. To spend five minutes talking about small business in our country sums up what the Minister for Small Business really thinks about the industry. How would she have any idea how to support small business through this inflation and cost-of-living crisis?

We've seen Labor consistently, time and time again, turn their back on small business. But small business employs almost half of Australia's private sector workforce, and it represents over 97 per cent of all Australian businesses. Despite running to 114 pages, Labor's platform mentions small business five times—only five times in 114 pages.

Given that a small business is most vulnerable to increasing costs and declining revenue, due to limited cash reserves, governments play an important role in supporting them: firstly, by creating strong economic conditions and, secondly, by creating legislation and regulation to make their life easier—and, dare I say it, even looking to remove red tape and regulation where possible. The reality is that a small business that has to close employs no-one.

There are many things in this bill that are lacking, but a great example of this is the energy incentive that the government touts and talks about. Again, this is classic Labor policy, where the political spin does not match the reality on the ground. They'll throw out the headline that it's a $100,000 reduction for a business, but it misses two points: a business has to actually have the money to invest in that energy saving, which in the current climate, they don't; and, to actually claim the full $100,000, which those opposite talk about, that business needs to earn a profit of $500,000 in the year. That small business has to earn $500,000 after investing all that money. It's a good headline—it's good spin—and they'll stand up and talk about how they're supporting small business, but it's actually not making a difference on the ground for business, and it shows again how this government just don't get it.

When I look through this bill, it has the words 'support for small business' in its title, but it actually decimates the instant asset write-off, depriving 26,500 medium-sized businesses of access to accelerated depreciation. This is and has been an important measure to support business investment. It was an important support that kept business and the economy going through COVID. It's a cancellation that will drive down investment, productivity and jobs. This is bad economic policy at a time when Australian families and small businesses are struggling under Labor's cost-of-living crisis. It's another example of this Prime Minister and this government making the wrong decisions and the Australian people having to pay.

While the coalition believes that this isn't a great bill, we will support it. But the reality is it doesn't go nearly far enough. The coalition will move amendments to recognise Labor's failure to support small and family businesses and extend the instant asset write-off back to the levels seen in the 2019-20 budget.

This means that the 26,500 businesses with aggregate turnovers of up of $50 million will be eligible to use the instant asset write-off. The asset threshold will increase from $20,000 to $30,000, allowing businesses to claim the depreciation on a wider range of assets. The reality is, and the member for Petrie wonderfully gave some great examples, $20,000 doesn't do a lot for a small business. This is a high-inflation environment where, unfortunately for small businesses, if they're fortunate to have $20,000 in the bank today, it's not worth the same as the $20,000 they had in the bank 18 months ago because of inflation caused by this government. They just don't get it. It aligns the eligibility with a small business company tax rate, and Labor's small business energy initiative measures, which are contained in this bill. It's a modest additional cost in the forward estimates, compared to Labor's measure.

After 18 months, the Australian people have worked out the Albanese Labor government. They know the government doesn't have a plan to improve the economy or to support small business. But we, the coalition, on this side of the chamber are focused on a back-to-basics economic agenda that will put fighting inflation and driving productivity growth at its centre. Inflation, overregulation and low productivity are aspiration killers. The coalition are committed to backing the aspirations of families, backing the aspirations of small businesses and backing the aspirations of Australians to succeed. The coalition will put the economic interests of Australians first, by focusing on strong economic management that brings down inflation, reduces debt and deficits and increases prosperity for all Australians. This requires a focus on supporting small business and entrepreneurship, delivering lower, simpler taxes and cutting red tape to drive innovation. It requires supporting technology uptakes in business and in the digital economy and in areas such as artificial intelligence and quantum.

I was disappointed to learn in an InnovationAus article this week that a US firm has been approached and is considered the frontrunner in the tender process to supply up to $200 million worth of quantum technologies to the government. This would be the government's largest single investment in quantum. Complicated by national security and defence interests, quantum is one of the four priority technologies that Australia, the United States and the United Kingdom have committed to process by 2025, under AUKUS pillar 2. Many in the local tech sector were surprised and disappointed. InnovationAus reported on the weekend:

… an expression of interest … process was started in August, with local and international firms hand-picked by the government invited to pitch their offerings and to put forward proposals for the financing of the plan.

Companies in the process have been bound to strict non-disclosure agreements that keeps the process out of the public view. As the shadow minister for the digital economy said:

Australia has established itself as a world leader in quantum computing and it's disappointing to hear that such a massive amount of taxpayer money could be invested without a tender and competitive process.

The EOI was issued in August, after the release of the National Quantum Strategy, which focused on building sovereign capacity and local expertise. InnovationAus went on to say the US company:

PsiQuantum is considered a front-runner among the firms, with several sources claiming … that the EOI had been written in a way that benefits the company and its fusion-based approach to quantum computing.

My understanding from the article is that PsiQuantum has deep connections in the defence department, with the former chief of staff of defence minister Richard Marles lobbying on behalf of the company, according to the government's register of lobbyists. What a coincidence. Unfortunately, this is what the industry has come to expect from this government. They're criticising the government for its lack of transparency in its approach to the local market and industry and the way it is seemingly discounting our local, world-renounced quantum sector bursting with potential and opportunities. What message does this send to other countries and international investors? Why is the government yet again ignoring our own country's innovation and skills? What opportunities are we wasting by automatically looking overseas for solutions before exploring the potential here at home? This is another example of why governments should not look to pick winners in industry policy but create an environment where the best products and businesses will succeed.

Australian small business is suffering because this PM does not understand small business, and, when he's making decisions that impact small businesses, he's always making the wrong decisions. When you look at the government's economic team, not one of them have worked in or with a small business. It's hard to find many across the aisle that have spent any time working in and with small business. I will acknowledge the member for Parramatta had one. He's in the chamber. So there's one. He's a lone wolf over there. I look forward to his contribution next.

We talk a lot about family businesses. I want to talk quickly about a great business I was able to visit in my electorate, Hop Hen Brewing. Mike and Jodie are the owners. They're teachers and they decided to follow their passion and start their own brewery. They started that from nothing but a dream, but they now employ over 14 locals in hospitality and manufacturing jobs. There's an ecosystem that they've created in our community and in Lilydale. They sponsor community organisations like the Mount Evelyn Football Club and the Mount Evelyn Cricket Club. That's what small businesses do. They create local jobs, they create local opportunities for young people and they support local community organisations, and that's why we need to continue to support them. That's why the coalition's amendment will restore the instant asset write-off to the levels introduced in the 2019 budget. It's why we will continue to focus on policies that will drive productivity at a time when it has experienced a historic collapse under Labor and that will grow the economy and support Australians.

Australians need a government that supports aspiration, not attacks it. Australians need a government that backs business to create jobs and doesn't fight it. Only a Peter Dutton Liberal government will deliver the strong economic management that will support Australian jobs, bring down inflation and fund the essential services Australians deserve.

Andrew Charlton (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

It is true that small businesses are incredibly important for Australia. In fact, small businesses make up 98 per cent of all businesses in Australia. They make up more than 60 per cent of all employment in Australia, and they make up more than half of all GDP in Australia. This is a sector which unquestionably powers the Australian economy and accounts for many of the livelihoods of the people in my electorate and electorates right around Australia. So it is incredibly important that we have coherent and positive policies to support the small-business sector. Now, that starts with understanding the small-business sector, and, unfortunately, what we have from the other side is a series of policies which are a world away and completely irrelevant to the daily challenges that small businesses face.

The member for Casey had the temerity to refer to the 'back to basics' policy of the shadow Treasurer. Back to basics is an interesting term for an economic policy. I don't know if the shadow Treasurer is fully up to speed with what 'basic' means in the slang amongst young people, but he certainly hit the nail on the head if he is, because it's a policy that has almost no substance and no relevance to small businesses. It's full of high minded philosophical concepts like fiscal policy, debt, inflation and productivity but nothing of the nuts and bolts of actually running a small business and nothing of the practicality of going in, day in, day out, and opening up the shop, employing the workers, serving the customers, closing the door and keeping those doors open. These are the realities of small business for Australians. These are the nuts and bolts issues that they want support with. The idea of some complex, back-to-basics, high-level analysis of the macroeconomy does not speak to their experience.

The member for Casey came in here. In his speech about small business, the big issue that he wanted to address was quantum computing—the issue on the mind of every Australian small-business owner! Whether it be a cafe or a pub, they're all interested in quantum computing. You don't hear about anything but quantum computing when you go and talk to small businesses. When you go to the shops, the pubs and the hairdressers, it's on the tip of their tongue: quantum computing! The member for Casey went on and on about PsiQuantum and the proposal for a tender, which he has some beef with, from an article that he'd read in the newspaper this morning. The truth is it has absolutely nothing to do with the daily realities of small businesses.

I'm going to take a lot of interjections from the member—I don't really know what you're saying, but I can hear you mumbling over there.

Luke Howarth (Petrie, Liberal Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

Can you get a ute for 20 grand?

Andrew Charlton (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

That's your question? It's a great question. The instant asset write-off—the one policy that was referred to by those opposite—is actually a policy that was introduced by Labor in 2008, and it has been copied and perpetuated by the opposition. So far, their ideas are: back to basics on fiscal policy—snore from the small-business sector; some bizarre obsession with quantum computing—totally irrelevant to the small-business sector; and a policy that Labor began and the coalition perpetuated. Terrific support there for small business from the coalition! They're a dollar short and a day late when it comes to actually understanding and helping small businesses with the realities they face every day.

Let me tell you a little bit about the challenges that small businesses really face, that they're really struggling with. They're struggling with the regulatory burden of hiring new workers. It is true that the hardest worker for any business to hire is the first worker. Going from having no workers in your business—a start-up just run by you—to employing your first worker is an enormous challenge and a big hurdle for many small businesses. The research suggests that it can take more than 20 hours just to set up the basic administration: paying the worker, providing superannuation, meeting OH&S requirements, record-keeping obligations and tax.

The truth is that most small businesses, when they start out, do not have the systems in place to make those early employment decisions and to employ people in a way that is efficient and simple for them. Most of those businesses have an enormous regulatory and compliance burden when it comes to hiring that first worker. Whether it be their legal status, their contract, their pay-as-you-go withholding or their understanding of the award rules, these are real challenges that businesses face when they hire their first employee. It is a big impediment to small businesses in Australia when they take that step forward towards growth and they start to open up the doors, grow their business and take on their first workers. For a small business, the compliance cost of making those early employment decisions can be five times higher than for larger businesses. That's a real burden that small businesses face and a real constraint on employment in this country, because small businesses employ two-thirds of all Australians. That's a real issue that small businesses are grappling with.

Another issue that small businesses grapple with is red tape. Small-business people are busy serving their customers, running their business, managing their workforce and controlling their cash flow. On top of that, they have a significant compliance burden from government. A recent study found that excess red tape was costing Australian businesses $9.3 billion every year. That's just small businesses. More than two-thirds of this compliance cost was tax compliance. That's $6.2 billion for small businesses just on tax compliance activities. That cost, per business, is more than 200 times larger than for large businesses in Australia. Even though that small business has a much smaller workforce and a much smaller P&L, it still has to do many of the same things that big businesses have to do, albeit with much restricted financial capacity.

The regulatory burden that we place on small businesses is something that we must be deeply conscious of. It is a real issue that keeps small-business owners away from their customers, keeps them away from their business and keeps them away—in many cases—from their families. That's where that time comes from—it comes from the time at the end of the day or early in the morning, when they should be going home and living their lives. The doors of the shop are closed, the business is finished for the day, but they have to start their compliance activities for government.

This is another real challenge, a challenge the opposition has presented no solutions for. Of course, the biggest problem every small business faces is the daily grind of cash flow. Knowing that money is going to come through the door so it can pay its workers, keep the lights on and pay its bills—that's the stress that every small business in my electorate lives with every single day. A recent study found that one of the biggest issues that small businesses face in terms of cash flow is late payments from larger businesses. This has a massive impact on small businesses. With all the services they provide to larger businesses, they end up waiting 30 days, 60 days or, in some cases, 90 days for the money to come in. A recent study found that 60 per cent of small-business owners across Australia had experienced cash flow problems last year. In order to get through a period of poor cash flow, 27 per cent of small-business owners had resorted to using their personal savings for their business. They dipped into their own savings, extended the mortgages on their homes, and borrowed from family and friends. A third of small-business owners are doing that because of the cash flow challenges they face today.

One of the biggest issues—one we can be addressing in this parliament—is late payment and trade credit terms from large businesses. A recent study from Xero found that $216 billion paid by large firms to small firms was late—that's $200 billion of money owed to small businesses that is not being paid to them on time. That is a creating a cash flow crunch for those businesses. Half of that money was late. Half of that money was due to the small businesses under the contractual terms provided by the big businesses, and it was late. That's $115 billion in late payments, meaning that small businesses are losing $7 billion in working capital every single year. In 2023, the situation hasn't improved. Xero's report Money matters indicates that 24 per cent of small businesses find themselves spending time chasing overdue payments, having to call up the big businesses—recognising a huge imbalance of power between the small business and the big businesses—begging those big businesses merely to pay on time the money that they owe. This is the crunch that small-business families face every single day. They're worrying about getting that money in just so they can pay it out to the workers and the bills that are rolling through the door.

There are lots of opportunities for us to support small businesses, and this bill contains a lot of them. One of those opportunities is supporting small businesses with digital capability. This really is a revolution in the way that small business works. As we get into the detail, I note that the interjections have wound down because I think we have exhausted the knowledge of the member opposite. But I'm still going to go through some of this detail because I think it's important.

An opposition member interjecting

There we go, I've provoked you. Terrific—it's good to see you wake up. The key opportunity here for small businesses is the digital economy. It used to be the case that IT systems that supported business were available only to large businesses. They required big mainframes, large IT investments, big network investments, and those were simply out of reach of most small businesses. But today, with the benefit of cloud computing and a range of new apps, suddenly a lot of those technologies are available to small businesses. Technologies that enable small businesses to engage in online marketing, to do e-invoicing, to run their accounting in the cloud, to manage suppliers and HR in the cloud—all of this means is that digital technologies which were once not available to small businesses now are available and can help them with all of the tasks they have to do in the management of their business. That's why this bill is so important.

This bill provides a lot of support for small businesses. It provides incentives to help small businesses save on their energy bills, and, under this proposal, small businesses with an aggregate turnover of less than $50 million per year will be able to claim an additional 20 per cent tax deduction for eligible assets that enhance electrification and energy efficiency. This is real support for the cash flow of businesses when they're trying to do the right thing. They're trying to support the energy transition and reduce their own energy bills, and this bill gives them the help they need to get over the upfront hurdle of that cost. Right now, at a time when energy bills are so high, I couldn't think of a more valuable support for Australian small businesses, which are struggling with their cash flow and struggling to make ends meet in a difficult environment. This initiative will help restauranteurs, manufacturers, tradies and hairdressers. It will enable up to 3.8 million small businesses to share in the energy transition that is now underway.

Of course, there are many more challenges that small businesses face. They face the challenges of cash flow and red tape. They face challenges in hiring and managing workers, particularly when they employ their first worker, whose compliance, in many cases, can be so burdensome to control. This bill doesn't address all of these challenges, but it contains a series of important and concrete steps to take us forward. These concrete steps have been no more important at any time than they are today, at a time when small businesses are struggling with so many of the elements of a difficult and complex financial and economic environment. That's why I commend this bill to the House.

Sittings suspen d ed from 13:02 to 16:0 2

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

It's always a pleasure to rise in this place and speak about small business. Small businesses are the backbone of our community right across this country. They employ nearly half of the Australian workforce; they make up 95-plus per cent of businesses in Australia. It is so important that they have the opportunity to be dynamic, that they have the opportunity to grow, that they have the opportunity to employ people and, most importantly, they have the incentive, because they can see value in the future, to do all of those things. It makes our country a better place for everybody.

The bill before us, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, touches on a range of measures, including, in schedule 1, a $20,000 instant asset write-off for businesses with a turnover up to $10 million. Schedule 2 implements a bonus for small business energy incentives for small to medium businesses. Schedule 3 deals with a new class of DGR recipients. Schedule 4 make some specific DGR listings. Schedules 5, 6 and 7 deal with some other tax and superannuation related matters. Schedule 8 deals with a matter in relation to a MetLife decision codifying the applicable responsibilities of AFCA to adjudicate on certain claims within super funds.

I want to focus on the small business component of this bill. Once again, it shows that the Labor Party don't support small business and haven't done so for a long time. We see before us at present in the House an IR bill that is only going to do more damage to small business. But let's have a look at Labor's record on small business.

They've consistently turned their backs on the small-business community. When they were last in government they abolished the entrepreneur tax offset and failed to deliver a promised tax cut for small business. Labor opposed the coalition government's enterprise tax plan when first legislated, denying tax relief to millions of small-to-medium businesses. The now Treasurer, Jim Chalmers, said at the time that small-business tax cuts were not worth the money and that Labor were proud to oppose those tax cuts. The now Finance Minister, Katie Gallagher, called the legislation of small-business tax cuts an absolute disgrace. In total, Labor voted against tax relief for small-to-medium businesses 15 times in the last parliament. Labor went on to promise $387 billion of extra taxes at the 2019 election. Since Anthony Albanese became Prime Minister, we have seen businesses all but abandoned under the Labor's draft national platform, and they are an afterthought in each and every budget.

Small business employs around half of Australia's private sector workforce and represents over 97 per cent of all Australian businesses. Despite running to 149 pages, Labor's platform makes only five mentions of small business, compared to 98 mentions of the union movement, 25 mentions of regulation, 28 of renewables, 15 of tax, eight of uranium, eight of the United Nations and 11 of nuclear weapons. Labor just show they simply do not understand small business. As we look at the IR bill before us in the House, there is no more evidence than that.

The coalition will support this bill, but we don't think it goes far enough. This bill decimates the instant asset write-off that the coalition brought in to assist small-to-medium business in cleaning up their balance sheets so they didn't have to run depreciation schedules and a whole bunch of paperwork and expense with their accountants each and every year. They were able to buy an asset and write it off instantaneously, thereby providing some tax incentive as well as, importantly, saving on their bookkeeping. We have moved an amendment to this provision of the bill to increase the threshold from $20,000 to $30,000, allowing businesses to claim the accelerated depreciation on a wider range of assets, and I think that is a very sensible move. It reflects our support of and encouragement of small business.

In all of this, it's important to consider the economic circumstances we find ourselves in. As we stand here today, we hear much debate about households and the cost of living for households, which is a very important issue. But our small-to-medium business sector is impacted by these cost increases as well, and we hear far less about that. Yet these are the businesses that are employing our mums and dads who are struggling with the cost of living. It's a double whammy in many cases because many of these small-to-medium business owners also have their house on the line each and every day. They're turning up and opening their doors and employing people, and more often than not the small-business owner is the last person to be paid. They pay their employees and they pay their suppliers and they are the last one to write out a check on a Friday afternoon for them and their household. I have spoken to any number of my local small businesses over the last little while about the increased cost of electricity, rent, input costs and transport costs. I was talking to a business only last week whose freight costs have gone up from about $75,000 a year to nearly $175,000 a year with no great increase in turnover or revenue. This is not even being considered when we are talking about these issues for our small businesses.

We accept that in this bill we are seeing small businesses potentially benefit from a small-business energy incentive measure. That's a modest measure to allow businesses to acquire more energy efficient appliances, put solar panels on their roofs and do all those sorts of things. All of those are sensible measures, but at the end of the day, if businesses are struggling to make ends meet, where are they going to get the money for these things in the first place? They are busy trying to keep their doors open, and we see no effort whatsoever by this government to reduce the rate of inflation and reduce interest rates so that these input costs to small business that they are paying a very high price for—and it's important to remember they generally pay a higher interest rate on their finance than people who have a mortgage do. So those small-business loan costs have had a major impact on their bottom line.

As I said before, small-business lease costs have risen in many cases around seven per cent. That is a very significant impact on their cost of doing business. At the same time we're seeing the cost-of-living crisis continue to bite into household expenditure, so a lot of these small to medium businesses—maybe they're a retail business, a cafe or a local restaurant—are seeing their customers hit by these cost-of-living increases and therefore their revenue, patronage and sales falling at the same time their costs are increasing. That is never a position you want to be in in small business. If your costs are increasing, you want your revenue to be growing at the same time, but they're not seeing that.

In addition, we have seen productivity fall over the past year by nearly four per cent. We've seen a range of cost increases on small business, and, added to that, there are increasing regulatory impacts on small business, which is also a cost that has not been quantified anywhere. At the same time we have seen this government distracted from the real job of dealing with these issues, whether it's household cost-of-living increases and the issues that arise from that or it's these issues facing small to medium business. These measures in this bill, whilst going a little way to support small to medium business, do very little to offset the actual economic impacts that are being delivered by this government not addressing the issues of rising interest rates, rising inflation, rising energy costs and a range of other measures. I think it is incumbent on this government to get back to basics and focus on the job that they need to do to deal with these cost-of-living issues.

In comparison, the coalition government had a great track record in supporting small business with energy costs. The coalition had ensured affordable and reliable power for small business and recognised it was critical to enable them to prosper, grow and create more jobs in the Australian economy. In office, the coalition delivered tailored advice to help small business find the best energy deals available and use energy more efficiently. The current government scrapped it. Reducing energy prices for small business by introducing the default market offer was another measure of the coalition government to ensure small businesses were protected from excessively high prices and had a reference price when searching for an energy provider.

The coalition government provided small family businesses with grants of up to $20,000 to help them with their energy costs and invest in technology to reduce their energy consumption. The coalition helped high-energy-using businesses to improve their energy efficiency and save on energy costs by delivering grants of up to $25,000. The coalition invested in future energy technology that would support jobs, strengthen our economy and reduce emissions. This not only cut emissions but also delivered reliable energy for Australia, which it needs to ensure that you have a continued reduction in the price of electricity and that the cost of electricity to businesses and households continues to fall. They are just some of the measures that the coalition government put in place to ensure that we supported small to medium businesses not just through the tax system but through the energy system and ensure they are able to meet their commitments to be successful and employ the Australian people.

As I said, we're not going to oppose this bill, but we are proposing an amendment to increase the threshold for accelerated depreciation from $20,000 to $30,000, and I commend that amendment to the House. More importantly—and I want to finish on this note—once again we are seeing that it is the coalition that is standing here, making amendments to a bill in order to improve outcomes for small to medium sized businesses. Those opposite in the government do not understand small business, don't care for small business and are beholden to their unions. Through other bills in this House they will seek to continue to damage small to medium sized businesses well into the future. The sooner we have a coalition government back to look after small to medium sized businesses, the better for this country.

Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Link to this | Hansard source

This bill, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, contains a number of measures, but today I'm going to focus on schedules 1 and 2 and what these measures mean for small business in Australia.

The Albanese government knows that small businesses are the lifeblood of our economy and our communities, and our budget invests in the security and certainty they need to thrive. There are approximately 86,000 small businesses in South Australia, and they provide important goods and services to the community and to other businesses across all sectors of the economy.

Ninety-seven per cent of businesses in Australia meet the category of 'small business', and small business is a major employer. Businesses defined as 'small' by the ATO—that is, those employing 19 or fewer employees—collectively employ over five million people across the country, and this accounts for about 42 per cent of the workforce. Small business also employs about a third of young Australians and about 40 per cent of apprentices, so it's a really important part of our economy.

A thriving small-business sector means a thriving economy, and that can only benefit all Australians either through their employment or through the goods and services available to them. I've had the pleasure of visiting many small businesses in my electorate both as a customer and, more recently, as their local MP, from food businesses like award-winning Kytons Bakery, an Adelaide institution, and the many fantastic restaurants across Boothby, wineries like Patritti wine, retail shops, wholesalers, manufacturers and health businesses, through to high-tech modern manufacturing, including, recently, Infinitus Aero, which is making electric aeroplanes—I wasn't brave enough to go up yet—electronics manufacturer REDARC, and Micro-X, which makes equipment for stroke ambulances and portable X-rays, some of which have been sent to Ukraine.

Each of these businesses is driven by passion and expertise and the entrepreneurial spirit and each is committed to contributing to their local community. But small business has been doing it tough over the past decade. When I spoke to small businesses during the campaign for the 2022 election they talked to me about the rising costs of doing business. They talked to me about the skills shortage across all sectors of the economy. They talked to me about the increasing red tape that stood in the way of them doing business and growing their businesses. They told me that for all of the rhetoric they heard from the former Liberal-National government—that the Liberal-National government supported small business—that was not what they experienced on the ground. They told me what was actually happening, and that was that the Liberal-National government only supported the big end of town, the big businesses. The small businesses told me that they had felt ignored.

I heard what small businesses told me during the campaign, and I'm here to tell them that this Albanese Labor government heard their concerns and that we understand. This government is making a number of changes to provide an environment where small businesses can grow and thrive. This bill provides some more support for small businesses, and I welcome it.

Schedule 1 to the bill increases the instant asset write-off threshold to $20,000 until 30 June 2024, to improve cash flow and reduce compliance costs for small businesses. The $20,000 instant asset write-off was announced in the 2023-24 budget, and small businesses with an aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2023 until 30 June 2024. Importantly, the $20,000 instant asset write-off will apply on a per-asset basis so that small businesses can write off multiple assets instantly. Assets costing $20,000 or more can continue to be placed in the small-business simplified depreciation pool and be depreciated at 15 per cent in the first income year and 30 per cent in income years thereafter. The $20,000 instant asset write-off will provide cash-flow support and simplification benefits for up to 3.8 million small businesses.

Many of the businesses I talk to tell me they want to grow, and this instant asset write-off will help them with some of the additional equipment required to do this. Others are simply needing to replace equipment that is reaching its end of life or being superseded. Some will use this to make their businesses more efficient, and this will help with the required retooling. While businesses budget for operational costs of doing business, the capital costs and capital replacement costs of expensive assets can be a budget blip that puts financial strain on the business, hence they can be delayed or cancelled. Enabling the instant asset write-off will free up cash flow so that businesses can invest to be more efficient, to grow or simply to meet a changing market. This government is committed to ensuring that small businesses have every opportunity to thrive and grow, and this instant asset write-off is an option that I am sure will be very welcome.

The second schedule is the small-business energy incentive. This helps small to medium businesses electrify and, therefore, save on their energy bills. We know that energy bills have been rising over the past decade—a decade when we should have been transitioning to renewables, the cheapest form of power, instead of remaining reliant on fossil fuels and being exposed to international energy market prices.

In South Australia, we've already provided $650 for energy relief for eligible small businesses and we know that wholesale energy prices have started to come down thanks to the work of Minister Bowen and will in time flow through to retail prices. But many businesses, many entrepreneurs, want to be the masters of their own destiny in this area as well. They want to participate in the transition to cheaper renewable energy and they want to cut their carbon emissions. So schedule 2 in this bill, the small-business energy incentive, will enable businesses to invest in electrifying heating and cooling systems, to invest in more efficient appliances and to participate in the energy transition through installing batteries and heat pumps.

These assets will enable businesses to minimise their power bills through more efficient energy use, both now and into the future. They will also be able to cut their carbon emissions, something that many of them are passionate about and that, increasingly, many of their customers and consumers are interested in. Assets like batteries also have additional benefits in enabling businesses to be blackoutproof. So, when a local blackout occurs—such as what we see time to time from storms, with damage to local power infrastructure—the battery continues to provide power and protect valuable assets such as those that require refrigeration.

To the detail: businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient energy use on 1 July 2023 until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, and the maximum bonus tax deduction will be $20,000. A broad range of depreciating assets as well as upgrades to existing assets will be eligible, and it will help small businesses make investments in electrifying heating and cooling, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

Tradies, manufacturers, restaurants, hairdressers, real estate agents and other small businesses are the backbone of the communities across Australia, and this incentive helps ensure businesses share in the benefits and opportunities of the energy transition that's now finally under way. It will support investments that deliver ongoing power bill savings for businesses while at the same time helping Australia lower emissions. Up to 3.8 million small and medium businesses will be eligible to access the small-business energy incentive and the benefits it provides.

Small business is a vital part of the economy, a vital part of the employment market and a vital part of the community, and it provides so many goods and services that make our way of life here in Australia. We thank them for their part in all of this and for their part in growing the economy. The Albanese Labor government is committed to providing an environment where small businesses can grow and thrive. This bill provides two such measures, which I'm sure will be welcomed by them.

Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I welcome this bill, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, to better support small businesses to improve cash flow and reduce compliance costs, including the many small businesses in my electorate of Warringah. Small businesses make up a staggering 97.3 per cent of businesses in Australia. They are literally the backbone of our economy—

A division having been called in the House of Representatives—

Sitting suspended from 16 : 25 to 16 : 37

Small businesses make a staggering 97.3 per cent of businesses in Australia. They are literally the backbone of our economy and make my electorate of Warringah a vibrant hub of economic activity. In Warringah alone there are more than 8,000 small-business employers. From 2020 to 2021, more than five million Australians were employed by small businesses, and small businesses contributed some 33 per cent of Australia's total GDP. But small businesses are facing yet another crisis following the devastating impacts of COVID over several years. Only in August this year, data showed give per cent of Australian businesses failed in the previous 12 months—the worst rate since the global financial crisis in the late 2000s. Half of the businesses that started in 2019 were permanently closed by June this year, according to ABS data.

A few months ago I met with the Treasurer to discuss with him the perfect storm of challenges being faced by businesses in my constituency. These include: the cost of living and high interest rates; high levels of stress following the COVID-19 pandemic; high levels of borrowing; increased levels of debt; rent rises, with increased interest rates and landlord-deferred rents coming due; and the impact of inflation, meaning consumers are spending less. Raising interest rates is seeking to curb inflation—one of the highest we have seen for decades—but this comes at the expense of our small businesses. From cafes to boutiques, clothing stores to local hardware stores and family-run grocery shops, fewer people are coming through the door, and those who are spends less than they have in the past.

If ever there were a time to support small business, it is now. Small businesses face a unique set of operational challenges, particularly managing cash flow and disproportionately high regulatory costs. I welcome this bill and the support it will provide to small businesses with the provision for greater value to be applied to asset write-offs. It provides additional support for writing off assets that support them in energy efficiency. This helps further reduce increasing electricity costs faced by businesses, which are inflationary in themselves. These two initiatives are to be applauded.

The $20,000 instant asset write-off was introduced several times by the previous coalition government, including during the COVID-19 pandemic. The impact when it ended was felt by many small businesses. So how does it work? Assets costing $20,000 or more can be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. During my consultations in relation to this bill, both in my electorate and with industry bodies such as the Council of Small Business Organisations Australia, it became clear that businesses need greater certainty. Robyn Jacobson from the Tax Institute says it best: the 'constant tinkering' of the scheme has made it difficult for businesses to keep on top of current laws and what is on offer to help ease the burden on them.

This bill, I would argue, is too limited, providing only for the 2023-24 reporting year, half of which is now almost gone. It provides limited opportunity for businesses to take advantage and make capital decisions. It undermines the utility of the bill in achieving its objectives. We know from the COVID-19 pandemic that, while the uptake of this initiative was initially slow in its first year, with many small to medium enterprises unaware of the increase, the scheme quickly grew in popularity through the pandemic. So it's likely here that, because half the year has already gone, there just won't be the opportunity for the full uptake. It's clear that increasing the amount of the write-off would provide even greater support for the economy and small businesses, allowing businesses to continue to invest when necessary to ensure their resilience. The support offered by this bill will provide life-saving support for businesses struggling to make ends meet and turn a profit right now. The Council of Small Business Organisations Australia noted recently:

Almost 43 per cent of small businesses are not breaking even and the majority of owners are working longer hours than average and paying themselves less than the average wage to protect their business—

and support their employees.

I also welcome the small-business energy incentive in this bill. It will help businesses address the other major issue they face: the rising cost of energy proportional to their cash flow. The June 2023 energy consumer sentiment survey recently released by Energy Consumers Australia reveals that 59 per cent of small-business people are more concerned about paying their electricity bills than they were a year ago. We know for a fact that decoupling from fossil fuels is anti-inflationary. We can get price certainty by moving to renewable energies and assisting small businesses in doing that. So we need to support small businesses and homes to electrify and benefit from an ever decarbonising grid and become more energy-efficient to reduce their energy consumption. The small-business energy incentive will support small and medium businesses to electrify, improve their energy efficiency and save on their energy bills. The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000. It will help small businesses with buying heat pumps, cooling systems, batteries and more efficient appliances, like fridges, and replacing LEDs. There are a number of energy efficiency measures open to them.

The task of decarbonising of our economy rests heavily on our homes and businesses, and governments should be providing support to accelerate the transition and deliver cost savings to homes and businesses. This is a huge, long-term task, one that is not going to be addressed by this bill, which is limited to simply 12 months, six of which have already gone by. I'm concerned that most businesses will not even know of its existence this side of Christmas. By the time they do, it will probably be too late to really plan to take advantage of it in the final quarter of the financial year. By the time they do, there will be insufficient time to consider, scope and cost potential opportunities to make use of this incentive. Small-business owners are busy running their businesses, which are under immense pressure at the moment. They need more time and awareness to make use of these opportunities provided for in the bill. I would say to the government that, if they are genuine in providing this assistance to small businesses, then the time frame in which these measures are available must be extended. I'll be supporting this bill, but I will also be moving amendments to increase the amount for the instant asset write-off and the energy incentive to extend it for another year, because, if we are going to be genuine about these measures, we have to put them within a time frame where businesses will actually be able to make use of them. If not, it is window dressing and posturing.

It is also really important that the responsible minister should report back to the parliament on its effectiveness in assisting small businesses. Too often in this place, big business has a very loud voice and very quick and easy access to government, but not often enough do we hear and consider the impacts of policies on small business. That is an important aspect that the government should take on board, and it should do better reporting in that respect. The bill is a good start, but I think it can be better, and I urge the government to increase the asset write-off caps and the period in which they are available to small businesses.

Fiona Phillips (Gilmore, Australian Labor Party) Share this | Link to this | Hansard source

I'm absolutely delighted to rise today in support of the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. In regional areas, like my electorate of Gilmore on the New South Wales South Coast, small business is what keeps the heart of our community pumping. Run by local people for local people, these businesses put in the hard yards every single day to make their communities better. They're our neighbours, our friends, our family. They often feel like family even when they are not: the local corner store, the newsagency, the grocery store, the swim school, the dairy farm, the winery, the brewhouse, the bakery, the pub—I could go on. Many started in local families, who have held onto those businesses and grown them into tourism meccas, international drawcards or just the go-to spot for local people to hang out. It didn't happen overnight, and it wasn't easy.

I grew up on a dairy farm, which is still there today—a small business that has grown. My husband, a carpenter, runs his own small business as well, as he's done for many years. I know the struggles small businesses face. I've been there as well, like so many people. That's why I am so incredibly proud to be part of a government that is working to support small businesses to grow, to diversify and to meet the challenges of a changing energy market.

We all know that energy prices have been rapidly going up, pushed by global challenges and a former government that spent a decade without a cohesive energy policy. We've seen it in our homes, and this government has worked to do what it can to bring those prices down. At the same time, we've supported eligible households with $500 in energy bill relief, a fantastic support that is helping millions of households right across Australia to deal with the cost of living.

Small businesses have probably felt this brunt more than others—no shock there. Their outputs are higher, their energy needs are higher, and so, of course, are their costs. To help them, this bill introduces the small-business energy incentive, to help small and medium sized businesses electrify and save on their energy bills. Businesses with an aggregated annual turnover of less than $50 million will, from 1 July until 30 June next year, have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient use of energy. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000. This incentive will help small businesses to make investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops and installing batteries and heat pumps. Not only is this going to help with the upfront cost or depreciation of these assets; there will also be the long-term impact on electricity bills, helping small businesses to save in the long run as well.

It has been clear for a long time that businesses have been working to make some of these changes themselves. Small-business owners can see the benefits in upgrading their equipment, making it more modern, easier to use, easier to maintain, better on the environment and, most of all, cheaper. Of course they can. But they've spent a decade without the right government support to help them do that. That's what we are trying to do—give businesses incentives, give them support and help them deal with the global economic climate that is driving up electricity prices. As a happy bonus, this will also help to reduce their impact on the climate. Up to 3.8 million small and medium-sized businesses will be eligible. How great is that? This is just one way we are helping businesses with their energy needs.

I want to briefly touch on another program that I have been so delighted to support as part of the Albanese government, which is helping small businesses with practical support to reduce their energy costs. The Energy Efficiency Grants for Small and Medium Sized Enterprises program is a $62 million grants program designed to help businesses become more energy efficient, to ease pressure on their energy bills and to reduce emissions. The program provides grants of between $10,000 and $25,000 to SMEs in all industry sectors to help them undertake energy-saving measures such as upgrading or replacing existing air conditioners with high-efficiency units, replacing gas-heating boilers with heat pumps, or purchasing tools to monitor energy use—and more. There is so much opportunity.

I was absolutely delighted to see local businesses in my electorate of Gilmore on the New South Wales South Coast benefit from this fantastic program. Hubert Estate, one of those family run tourism drawcards that I mentioned earlier, a truly beautiful winery in the Ulladulla area, has taken many steps to improve its energy efficiency and reduce its impact on the environment. I was really happy to deliver $25,000 as part of that program to Hubert Estate for a compressed air system. Meadows Swim School in Nowra, another locally owned and run business, was successful under the program for a heat pump upgrade worth $25,000, which was a big help for a small local swim school. Dungowan Erowal Bay, a beautiful waterfront holiday accommodation in stunning Jervis Bay, received $25,000 to replace inefficient air conditioning units with modern high-efficiency units, helping the business, helping boost tourism and helping the environment—win, win, win. Another fascinating small business, Cyber Heroes, a podcast hosted by two local fellows giving guidance on protecting yourself from cybercrime and becoming cybersavvy, received more than $12,000 to replace non-LED lights and add automation control. This is a small business helping people around the country with one of our great modern challenges, so we're helping them.

The diversity of these recipients and what they have chosen to put the grants towards is simply fabulous and demonstrates our government's commitment to working with small business to give them the support they need now and into the future. They're just a couple of examples on the energy front of how we are supporting small and medium-sized businesses, and it's great to see this bill extending that even further.

That's not all this bill does. Another part of the changes we are introducing today is something else I know will be welcomed with open arms by local small businesses—the $20,000 instant asset write-off. Schedule 1 of this bill increases the instant asset write-off threshold to $20,000 until 30 June 2024, to improve cash flow and reduce compliance costs for small businesses. This is something we announced as part of the 2023-24 budget, and I'm delighted to see it being delivered. Small businesses with an aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 this financial year. It will apply on a per asset basis, so businesses can write off multiple assets—simplicity, reducing red tape, as they say, and increasing cash flow when it's needed most. Music to small business ears, I'm sure. That's what we are delivering today, because we know it's what they need and want and we know that it will make a difference. Of course assets over $20,000 can continue to be placed into the small-business simplified depreciation pool, depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

On top of support for small businesses, this bill is also supporting registered charities. The bill provides a path for up to 28 community foundations to be endorsed by the Commissioner of Taxation as deductible gift recipients, providing an incentive for donations to these foundations for the important work they do in our community. This is working towards our government's goal of doubling philanthropy by 2030.

I will always do everything I can to support local businesses, to celebrate them and to thank them for the work they do in our community. We've seen the difference small businesses make to communities. There's no better example than during the 2019-20 bushfires, when small businesses stepped up to support our recovery, donated goods, acted as community hubs, stayed open for incredible hours and were just simply there for local people and tourists alike through some of our hardest times. We thank them so much for that. In amongst all the tragedy and hardship we were surrounded with, it was a beautiful display of the true South Coast spirit, and we genuinely thank them from the bottom of our hearts for that.

Small businesses are the lifeblood of our regions, and we need to do everything we can to help them through some of these hard economic times. That's what this government is doing, and this bill is just one piece of that puzzle. I am proud to be supporting it. I commend the bill to the House.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. Small businesses are the backbone of our economy. Anyone who doesn't think that in this parliament really hasn't surveyed their community, because, according to the Australian Bureau of Statistics in June 2023, businesses with zero to 19 employees, defined as small businesses, accounted for 97.3 per cent of all Australian businesses. If we include medium businesses—those with, say, 20 to 199 employees—the total number of small to medium businesses represented 98 per cent of all businesses in this country.

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

Order! The Federation Chamber is now suspended until quorum is present.

Sitting suspended from 16:56 to 17:01

( Quorum formed)

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

As I was saying, businesses with zero to 19 employees are defined as a small business, and they account for 97.3 per cent of businesses in Australia. If we include medium businesses—those with 20 to 199 employees, which can be your average IGA—the total number of small and medium businesses represents 98 per cent of all businesses in this country, of which 98.3 per cent have an annual turnover of $10 million or less. One distinction we always need to make, when talking about turnover, is that turnover is not profit. When we're looking at businesses and we're defining a small business, we shouldn't just look at turnover. As I mentioned before, service stations and IGAs—those with very small profit margins—can tip over that $10 million. Ninety-two point seven per cent have an annual turnover of less than $2 million, and it is this economic metric that I wish to pay most attention to. As shown by the ABS figures, most businesses in Australia have a relatively small turnover. Hence, if we apply the Australian Taxation Office definition of 'small business'—those businesses with a turnover of $10 million or less—we can safely say that more than 98 per cent of all businesses in Australia are indeed small businesses.

This bill seeks to increase the instant asset write-off from $1,000—which was really just embarrassing—to $20,000. It's a temporary measure to support small businesses to improve their cash flow and reduce compliance costs. This is a targeted measure, and while I support it and recognise the significant impact it will have on thousands of small mum-and-dad businesses that struggle with cash flow, I do have some reservations. Firstly, $20,000 is really a very small amount. I have a lot of small-business food manufacturing in my electorate, and just one machine in that area can be well over $100,000. The COVID response threshold lifted it up to $150,000, and that was later lifted again, providing small business with the opportunity to acquire what they needed, without limitation, to move into the next century. I've got to say that many businesses in my community really scrimped and saved and got some loans to be able to afford to buy that equipment. Secondly, the measure is only available for assets acquired between July 2023 and June 2024. Again going back to my food manufacturers, many of their pieces of equipment are just not made in Australia. They're made overseas—Germany, Italy and the like—and so there's a very long delay in getting that equipment, once ordered, into Australia. I think this is quite short-sighted, given our current environment, and the time frame really should be extended.

To be frank, businesses are finding it incredibly challenging. I've talked to so many small businesses right across Mayo—those in viticulture, food production and construction. Right across the board there are huge challenges felt because it is tough doing business in Australia. The Australian Securities and Investments Commission reported that 7,942 Australian companies entered external administration in the 2022-23 financial year, and this represents a nearly 50 per cent increase on the previous year. That should be ringing alarm bells in this place. In the construction sector, some jurisdictions have reported a 73 per cent increase in companies entering external administration or having a controller appointed. Importantly, ASIC identified inadequate cash flow as a leading cause of company failure. Given this, I urge the government to reconsider both the threshold and the time limit in providing those instant asset write-offs. We really want small businesses to thrive in our nation. We want to give them every opportunity and every environment to do so.

Schedule 2 of the bill will provide small and medium businesses with access to a bonus deduction of up to 20 per cent of the expenditure on assets—or improvements to existing assets—that support electrification or more efficient energy use, with a maximum claim of $20,000. Like the instant asset write-off, I support this measure and acknowledge the positive impact it will have on small-business cash flows, extending beyond the initial expenditure. We know that small businesses and consumers more generally are struggling. Increased cost and, in particular, rising energy costs are having a profound effect on the sustainability of businesses and households. I visited a small business in my electorate just a week and a half ago, and I asked, 'How are your power prices going?' They said they were in negotiations for a new contract; their three-year contract was just expiring and they were not sure what they were going to do, because their new contract was 50 per cent more. How can a business absorb that? We've got to do more in this place. We're just driving people out of business with those sorts of energy prices.

I have raised my concerns about the cost of living and energy prices on several occasions in this place. When we talk about the cost of living, we're talking about the cost of covering all of your bills. We're talking about the cost of buying food and putting petrol in your car. Everything has gone up. It's a crisis, and I just don't think there are enough of us talking about it. This needs to be a matter of public importance every day. I will support any policy that will mitigate some of the increased costs experienced by businesses, because those small businesses employ people in my community. When people have a job, they can take some steps towards covering the cost of running their household. Without those small businesses, there are no jobs.

As with the instant asset write-off provisions, I urge the government to consider increasing the maximum amount of the bonus deduction and making that initiative ongoing. And let's not forget that, again, we need to have a longer lead time. One year is not enough if you're a small manufacturing business and you're ordering in equipment from overseas. We don't manufacture a lot of large-scale commercial stuff, such as fridges, freezers, ovens and stills for distilleries; all of that generally needs to come from overseas. I support the schedules in this bill and implore the government to do everything within its powers to work towards reducing the cost of energy and other spiralling costs that are hurting businesses in our community.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the motion moved by the Assistant Treasurer and Minister for Financial Services, the honourable member for Whitlam, who, I point out, is also a loyal, long-suffering Dragons supporter. I'm wearing a Dragons tie, so I share his pain. But I digress.

The Albanese Labor government is taking action to reduce the cost-of-living impacts for Australian small businesses. The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 has a raft of measures aimed at giving Aussies a fair go, from increasing the instant asset write-off for small businesses to $20,000 to providing incentives for small businesses to electrify and save on their energy bills. This bill also adds a new class of deductible gift recipients, making it easier for Australians to give back to their local community organisations.

Our government, unlike the coalition governments that came before us—the Abbott-Turnbull-Morrison progression—is dedicated to a fair go for all. This bill is directly aimed at ensuring our small businesses and community organisations are not left behind. Small businesses are so critical to our economy and communities, but, after a global pandemic, the war in Ukraine and nine years of coalition governments that focused on the top end of town, small businesses are hurting. They do deserve a fair go.

This bill allows small businesses to instantly deduct eligible assets worth up to $20,000. They can deduct multiple assets, and businesses with assets worth over this increased write-off limit can still use the small-business simplified depreciation tool to claim that 15 per cent reduction in the first year and 30 per cent each year thereafter, so it's quite beneficial. This asset write-off will provide vital cash flow support and simplification benefits to many businesses in Moreton and, obviously, right across the country.

Small businesses are so much more than the services they provide. These people are deeply embedded in and promote a sense of community that brings people together—where 'community' and 'customer' are not simply words but are at the core of any small business. Obviously, this is in contrast to the big-name brands, who feel entitled to squeeze every penny out of hurting Australians. Under the guise of inflation, large corporations are ramping up prices. They're listing record profits at the expense of hardworking Australians while telling consumers that $9 for jar of Vegemite is the new normal.

Those opposite have, sadly, too often been in bed with big business. Labor governments are dedicated to a fair go for all and to ensuring small businesses have equal opportunities to succeed. We believe in fair dinkum markets, not those coercive duopolies. You would never see this completely unfair, greedy profiteering from small businesses. In fact, you see the opposite.

In my electorate of Moreton, over the course of the 2022 Brisbane floods, many residents experienced profound devastation—especially a lot of businesses throughout Rocklea—and went for days without power. Amidst that suffering, a local pizza restaurant, Tocco Italiano in Chelmer, provided free pizza for impacted locals. To all the small businesses that are struggling, the Albanese government hears you and is working on your behalf.

In addition to the increases to the instant asset write-off, this bill introduces the small-business energy incentive to help small and medium-sized businesses electrify and save on their electricity bills. Eligible businesses will receive an extra 20 per cent tax deduction for certain energy-efficient assets from 1 July 2023 through to 30 June 2024. This comes just a few months after the joint state and Commonwealth funded Energy Bill Relief Fund was announced, which saw eligible small businesses in my electorate receive as much as $650 in energy rebates.

The Albanese Labor government will always back our small businesses. We know that they're the backbone of our communities in places like Moreton. This government is helping small businesses combat the costs of living and ensuring that they get a fair go. And, obviously, if their customers have more dollars in their pockets, through pay rises and the like, supported by this side, that means they spend more money in small businesses.

These incentives support small businesses to upgrade or invest in more energy-efficient assets, helping them save money and ensuring that all businesses benefit from the clean energy revolution. Assets like heating and cooling systems, induction cooktops and energy-efficient appliances will all be included. This measure will help the 3.8 million eligible small and medium-sized businesses, including those in my electorate, to save at the shop counter. Delivering ongoing support for energy bill savings is vital to ensuring the stability of small businesses while simultaneously doing our bit to help Australia lower its emissions. This bill is delivering a fair go for small businesses and a fair go for our environment—win-win.

This bill also provides vital pathways for up to 28 community foundations, to be endorsed by the Commissioner of Taxation as deductible gift recipients—or DGR, as most people know it. These organisations are the lifeblood of communities across Australia, and the Albanese government is committed to ensuring they are given the support to flourish. The bill specifically names Justice Reform Initiative Ltd, a critical organisation dedicated to criminal justice reform and working to reduce Indigenous incarceration rates. It also mentions the Australian Sports Foundation Charitable Fund, something I am particularly keen to support because it gives so many in the sporting area a break. Under current arrangements, taxpayers can claim deductions for gifts valued at two dollars or more given to DGRs, and expanding DGR status to these community organisations ensures that they continue to provide their services. This reform will provide clarity to donors and recipients alike, and help to encourage philanthropy within communities. It will assist in achieving the government's goal of doubling philanthropy by 2030.

All Australians are proud of that great concept of mateship. The Albanese government is dedicated to ensuring that helping others in the community is as easy as possible. Whatever your particular passions are, you should be able to send your money towards those community groups. This bill ensures that the next generations of Australians learn that times tradition of what mateship is: digging in your pocket to help someone out who is doing it tough. It's important we continue to incentivise and encourage the work that not-for-profits do around Australia. They took a hit during COVID, with the number of volunteers a cross most community organisations basically all but halving. We want to make it simple for donors and foundations alike to benefit.

Strong and stable government creates strong and stable communities. We don't want people focused on division. That is not a good thing for our society. The bill ensures that community groups across Australia know the Albanese government will always look to support groups who are dedicated to building a fairer country. This government is also extending the global infrastructure hubs income tax exemption for another year. Central to Labor foreign policy has been international cooperation and economic independence. We are a middle power, but we like to make sure that we do more than other nations when it comes to our region in particular. Now, in this difficult world, it is more than ever vital to strengthen and protect the effectiveness of our global institutions.

This bill amends the current income tax law with respect to general insurers to provide good alignment with the new accounting standard. It will help to avoid the compliance burden for general insurers maintaining two different recordkeeping system for tax and accounting purposes. This change aids in streamlining the business process and helps to make the Australian economy more efficient—like those red tape days. Remember them? They were good times, weren't they? Furthermore, this bill strengthens the Australian superannuation tax system by making it fairer and more holistic. The current superannuation tax system allows for disproportionate outcomes across funds under the non-arms-length rules. By limiting the amount of taxable income at the top marginal tax rate to a proportionate amount for self-managed funds and small APRA-regulated funds, our superannuation tax system will be fairer for all Australians while still maintaining the broader integrity of the system—a system that the Labor Party instigated. Now we have over $3 trillion in funds—an amazing initiative.

This government is committed to strengthening our institutions by ensuring AFCA has sufficient authority to consider complaints relating to superannuation. This measure brings the policy in line with its original policy intent—for AFCA to have jurisdiction to hear all superannuation-related complaints. Superannuation represents Australians' future, and it's important to protect it at all costs. We on the side of the House have always endeavoured to defend Australian superannuation, while those opposite seem to undermine the institution and raid Australian super every chance they get—then they miss out on the benefits of compounding interest. AFCA's role in arbitrating financial compliance is vital in terms of giving peace of mind to all working Australians.

The Albanese Labor government is committed to taking action to support small businesses. Sadly, too many of those opposite have sided with big business over small, at the expense of everyday Aussies. This bill can really be summed up in one word: fairness. It makes things fairer for small businesses, fairer for self-managed super funds and fairer for charitable foundations. The Albanese Labor government will continue to take action to support the communities that keep Australia moving, and I commend this bill to the House.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I have appreciated listening to the contributions on the debate, particularly from those in the government that have indicated how much they understand that small business is a vital part of our economy. I have to say that you wouldn't know it based on the agenda that they have been pursuing since they came to government. They might have a messaging problem on that point, because I can tell you that the small businesses in my electorate are not beating a path to my office to tell me how much they appreciate the way in which the Albanese government is supporting them. In fact, it is quite the reverse, because all businesses, small in particular, are really struggling under this government, whether it's through skyrocketing prices on electricity, other business costs or these IR changes that are all about punishing small business and making it difficult to employ people and grow our economy, which is what all small businesses are looking to do. That benefits all of us, particularly the people that work in those businesses.

Businesses are not the enemy, and governments shouldn't be about amending industrial relations laws and other laws to treat small businesses as if they're looking to exploit people—their workers. They care about their workers. They genuinely cherish the opportunity to not only employ people and grow their business but also give someone a job in our economy. I've also got to say that the lowest paid workers in our economy by far are small-business owners. Some of them earn hourly rates way below the minimum wage. Some of them open businesses on weekends and staff them themselves, and, when they look at what their turnover is for opening on a Saturday—a small newsagent or whatever—compared to what they should have been paid for working those hours, it's nowhere near the minimum wage. But they put their capital on the line, they contribute to the economy and they work hard. We would particularly like them to succeed, grow and employ more people. Certainly, what the Liberal Party and the coalition are all about is doing exactly that.

There are two elements to this bill I want to briefly touch on. The first, of course, is the instant asset write-off. In the second reading amendment we've made it very clear that, whilst we're supporting this small initiative of the government—the instant asset write-off—we think it should be much more significant and we would like to see the value increased and the eligibility increased.

I commend my good friend the member for Riverina, who is here in the chamber, who sat around the cabinet table that brought in that instant asset write-off and dramatically expanded it in those very desperate times when we needed to give business a huge amount of confidence to open up the chequebook and make decisions that would get economic activity supported through those tough times. We are the party of the instant asset write-off, and this is a bit of a pale imitation of what we did in government. So we would like to see this figure be much higher than $20,000. We would like the eligibility to be much broader.

The second point I would just like to make is on the energy rebate—schedule 2. It's very curious that, for the instant asset write-off, eligible businesses are those with a turnover of up to $10 million and that, miraculously, it increases for the energy rebate. That businesses with up to $50 million should be eligible for one but not the other seems blatantly unfair and very peculiar.

It's also just sloppy that the government are bringing this through our House in November. This is a scheme that is meant to currently be operating and meant to be eligible up to 30 June next year. It will probably move through our House this week. No-one knows what will happen to it in the Senate, but in the best case it might pass just before Christmas. For businesses to take advantage of this, they've got a precious six months to do so, by 30 June next year. I think that it's very unfortunate that, if there's merit in this proposal that the government is putting forward, they haven't been expeditious in legislating the thing so that businesses can actually take advantage of it. That's very disappointing.

I commend the second reading amendment from the shadow Treasurer. The government should look very closely at how they can do a lot more for business than this. Nonetheless, we won't stand in the way of the passage of this bill. It is a meagre support to business. It is a pale imitation of what we did in government, but if this is all the government's prepared to put forward then of course we will support it. I commend the second reading amendment to the House.

Jerome Laxale (Bennelong, Australian Labor Party) Share this | Link to this | Hansard source

It's my great pleasure to rise today to speak in support of this Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. It's an important bill that shows Labor does care about small business and the not-for-profit sector.

In my time as the mayor of Ryde, while I worked for my family's small business and grew it, and now as the member for Bennelong, I've spent a lot of time talking with small-business owners. The important role they play in Bennelong and across Australia is clearer than ever. The small-business sector is vital to our economy and our wellbeing; it's a sector that remains very close to my heart.

Small businesses play a crucial role in local job creation. In Macquarie Park I've seen agile small businesses and start-ups develop innovative products and solutions. In West Ryde I've seen new family businesses open up, serving the tastiest of foods for our local community, and in Eastwood I have worked with small businesses over the years to shield them from the worst impacts of the pandemic. A strong, resilient and diverse small-businesses sector means a strong, resilient and diverse Australian economy.

In talking to small-business owners like Grace, who runs a small newsagency in Ryde, it has been abundantly clear that the last few years have been very tough. The impact of the pandemic and economic uncertainty have left small businesses struggling. We had supply chain disruptions and we had closed borders and labour shortages. It is, therefore, critical that the House acts to further support what the minister rightly calls the 'engine room of the Australian economy'. Thankfully, the last budget has funded these two important mechanisms to provide support—those mechanisms in this bill.

This bill delivers significant, new and practical measures to support resilience in both the small business and the not-for-profit sectors, helping them both prosper and deliver through challenging conditions. The first mechanism—as we have heard through other speakers—is the implementation of the $20,000 instant asset write-off, which will help improve cash flow and reduce compliance costs for small businesses. This instant asset write-off will apply on a per-asset basis so small businesses can instantly write-off multiple assets. It could be new point-of-sale software, kitchen equipment, machinery, manufacturing equipment or new telecommunication systems—whatever that needed asset may be. For growing small businesses or those who need to digitise, this bill should make it easier to access them.

Small businesses with an aggregate annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2023 to 30 June 2024. It will help restaurants, cafes, grocers, hairdressers, tradies, accountants and small retailers. The mechanism outlined in Schedule 1 also addresses investments greater than $20,000. If an asset is over that amount, it 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 each year thereafter. This will help small businesses with their cash flow and simplify compliance for up to 3.8 million small businesses across Australia. If this bill doesn't go through, that $20,000 will fall to its default level of $1,000.

The second important mechanism in this bill is the mechanism which incentivises small businesses to electrify and invest in renewable energy technology. Given the inflationary pressure on electricity prices, this line of support will provide much-needed assistance to the ongoing operation—particularly high-energy-use small businesses. Businesses with an aggregated turnover of less than $50 million will have access to a bonus 20 per cent tax deduction, supporting electrification and more efficient use of energy in this financial year. That will include solar panels, batteries and heat pumps. If you run a restaurant, you can electrify your cooktops and ovens. It will help businesses drive down their electricity costs. It'll also help to get a reduction emissions, which is really important to this government. Up to $100,000 of total expenditure will be eligible for the incentive, with a maximum bonus tax deduction of $20,000. It will encourage and support investments to drive down everyday business costs. Up to four million small and medium businesses will be eligible to access this scheme.

These mechanisms that support the resilience of small businesses complement the extra $1.5 billion in new tax incentives that the Albanese government introduced earlier this year. There is the technology investment boost, the skills and training boost, this renewable energy incentive and the instant asset write-off; these are all measures which we put into place, under the Albanese government, to help small businesses get through a really tough time. There's quite a bit there on simplifying compliance for not-for-profits, and I commend the relevant ministers for their really hard work. This is a comprehensive bill, one that will help small business across Bennelong and across Australia.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

Thank you to those who have come before me. We have had other omnibus bills in the other chamber. Of the fair work omnibus bill in particular we were quite critical because it included things that were related to the headline but weren't really related to the purpose of the bill. We made the point that they were designed to create more of a wedge. But this omnibus bill is not about that; this omnibus bill seeks to put together a variety of small-business related matters that can be included only in a lumped-up bill as we have here.

The coalition will be supporting the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 but, as my colleagues have said before me, it does not go far enough. It does not go far enough in particular measures that are within the bill, which we will be putting amendments forward to fix. My colleagues have also, quite rightly, spoken about the lack of proper support to small business, and I can single out two areas.

Firstly, many before me have noted that 42 per cent of people in this country who are employed are employed in small businesses, and the percentage of businesses that are small is in the high 90s. It is a huge section of our economy and of society, and most small-business owners have dreams and aspirations of being medium and maybe even large businesses. Most large businesses started, once upon a time, as a small business—even big companies like BHP and Qantas were small businesses at one stage. We would like to think that, in 100 years from now, the Stock Exchange will be full of companies that may be small businesses that started about now. We have to ask what barriers are there for individuals and families choosing to make those decisions of whether to establish those businesses, to put their own capital and effort on the line?

One of the barriers that all sides of politics need to look at is the sheer volume of law and regulations across local government, state government and the Commonwealth. In the other chamber, in another debate, I noted the sheer volume in just some of the relevant provisions included in the Fair Work Act, at almost 1,100 pages. Now, with the 'closing loopholes' omnibus bill, we're seeking to add another 278 pages, with an explanatory memorandum that goes to 305 pages. I spoke about the almost 4,000 pages of the Corporations Act and the almost 5,000 pages of the Income Tax Assessment Act. The GST act is almost 700 pages—and on and on it goes. It cannot be the case that anyone looking to start a business must freeze and engage expensive lawyers just to understand what's going on and what their obligations are. We should be removing that burden rather than adding to it. For small businesses and aspiring medium and large businesses, even the recent changes to the definition of 'casual', 'work' and 'employment' in the other chamber are prohibitive. The definition of 'casual' in the bill goes to three pages, and there are 15 factors, and if you get it wrong, there are prohibitive and serious legal consequences. The definition of 'employment' goes to seven pages. For a small-business owner or someone who works in a small business, they should be terms that have common meaning—a plain English meaning.

We know, with the rising cost of living, that the benefit of casual employment isn't one just for the employer; it's also for the employee. We are hearing of many people who are taking on second and third jobs just to meet their ongoing cost-of-living obligations. These are people who might have a full-time job but now require other work just to pay the bills and to meet the $24,000 extra a year they now need to find on a $750,000 mortgage. That's after-tax money. You need to almost get $50,000 a year to meet that. For those who have that obligation now, the only way to do it is to take on extra casual work. When we talk about supporting small business, we really need to turn our mind to how we are putting further barriers in the way for people to be employed casually and how small-business operators can engage in a business that relies upon the flexibility of casual work. It is not good enough that we have an omnibus bill here that seeks to tinker at the edges. It doesn't actually deal with the substantive issues that are there for people.

There are a few other exceptions in here, and credit was properly given to the previous government about the instant asset write-off. That was a really important reform that made a difference to businesses. It should be extended, and that will be one of the amendments that we are seeking to do. In conclusion, the coalition will be supporting this bill. It doesn't go far enough, and we will be making the amendments.

Daniel Mulino (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to rise in support of the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. This is a bill that contains a wide number of measures, but, at its heart, it is a bill that is there to support small business and to support charities. I won't go through every single measure in this bill, but I will work through a number of the key measures and identify how it helps to support the government's broader agenda when it comes to both small business and charities. The major items in this bill relate to easing the tax pressure for small businesses, helping them with cash flow and helping small businesses to electrify and, in that way, to be part of the broader transition of the economy and our society to a cleaner future.

Schedule 1 of the bill amends the Income Tax (Transitional Provisions) Act 1997 to increase the instant asset write-off threshold to $20,000, until 30 June 2024, to improve cash flow and reduce compliance costs for small business. Under the measure contained in schedule 1, small businesses with an aggregated turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000, from 1 July 2023 until 30 June 2024. The $20,000 threshold will apply on a per asset basis so that small businesses can instantly write off multiple assets. This is a significant measure for businesses looking to invest in their capital or their infrastructure. Assets costing more than $20,000 can be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Schedule 2 of the bill amends the Income Tax (Transitional Provisions) Act 1997 to introduce the small business energy incentive to help small and medium businesses electrify and to save on their energy bills. Up to 3.8 million businesses with an aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and the more efficient use of energy. This is something that will be good for businesses in that it will reduce their energy bills or their reliance on energy, but of course it will also be very important for the transition of our economy as a whole. The new tax incentives will apply from 1 July this year until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

Small business is the engine room of our economy. It's both the engine room of the economy and, in a sense, the canary in the coalmine. It's the engine room of the economy not only because it employs so many people—5.2 million people—but also because it gives so many people their first go in the labour force. It gives so many people their opportunity to gain experience and to step on the first rung of the employment ladder. Small business is also so important because it gives so many people in our community a chance to be entrepreneurial and a chance to follow their dreams. It's absolutely critical as a driver of employment in our economy. There are hundreds of thousands of small businesses right across all sectors of our economy, and they drive innovation, entrepreneurialism and technology diffusion right across the economy.

So small business, as I mentioned, is the engine room. But small business is also vulnerable in many ways. It's the canary in the coalmine because small business, more than large business, is often subject to short-term cash flow constraints. Moreover small business in many contexts can be subject to risk. Whether it be a natural disaster risk, a business related risk, a business cycle risk or whatever it might be, small businesses often find it more difficult to diversify those risks. Small businesses can be much more exposed to those risks than larger businesses. So, on the one hand, small businesses are incredibly important to our economy. They employ, I think, almost half of the total labour force, and, as I said, they give so many people their first chance and give so many people the chance for independence and entrepreneurialism. However, on the other hand, small business has its vulnerabilities.

That's why these two measures are so important. These two measures go to the cash flow issues and some of the risks that I talked about and provide material assistance. Schedule 1, the instant asset write-off extension, is particularly important as a way of helping small business to manage some of those cash flow risks that larger businesses are often more able to absorb. In my electorate of Fraser, small businesses are thriving and critically important right across the electorate. There's the Migrant Cafe in West Footscray and Big Sams Market in St Albans and Footscray Market. Within each of those markets, they have a whole range of individual food and other suppliers. They're such vibrant, dynamic parts of the economy. There's Bell Industries, an incredibly innovative and dynamic manufacturing firm, and many other manufacturing firms right throughout the electorate. There are also, of course, the many thriving, multicultural shopping strips full of small businesses, cafes and restaurants. They are incredibly important, and that's why for me this is such an important bill.

These measures were announced in the May budget, so it's wonderful to see that these are now coming into force. The small-business energy incentive will be extremely important in helping small businesses to invest in the transition of the economy to a clean energy future. For me, this is a particularly important initiative. This is one of those win-win situations where the measure will not only benefit the business by reducing their bills in the future and by reducing their exposure to energy price risk but also benefit millions of organisations employing millions of people. It is absolutely central to the overarching transition task that our economy faces. Many of the peak industry bodies have been calling for exactly this kind of assistance. For example, in Victoria, VCCI, in their report Achieving a net-zero economy, has called for this kind of assistance for small business to be able to invest.

I want to go back to that cash flow issue that I talked about earlier. Often, investments for longer term savings, including moving towards greater electrification and better managing energy usage, require significant upfront expenditure, and it's for exactly that reason that this measure is in place—to help small businesses deal with the challenges of managing cash flows over the medium and long term so as to be able to take advantage of those benefits.

There are a whole range of other measures that the government has put in place. I want to identify them because I think it's important to put this Treasury laws amendment bill in the context of what else we're doing to help small business. Of course, there's targeted energy bill relief already for around one million small businesses, with $650 coming directly off their energy bills, in partnership with the states and territories. We've already got a range of measures in place to help them deal with some of the cost-of-living challenges. There are already initiatives in place, but this will be an additional measure, which will help small businesses to invest for their longer term energy security and efficiency.

There's $15 million for free mental health and financial counselling support so that small-business owners and directors, who have done it so tough over recent years, get support where they need it. Then there's a range of procurement mechanisms, which I think are particularly important. These procurement reforms will ensure that small businesses can access more of the tens of billions of dollars of procurement that the government undertakes. There was a significant increase in the target for small-business procurement, which will flow through to small businesses and, again, help them with a lot of their cash flow. The government is also committed to a range of measures to ensure small businesses are paid on time, which is a critically important issue for small business. Given those cash flow issues that I mentioned, being paid on time can be so critically important in so many areas.

As I mentioned earlier, this bill also contains a number of measures to support charities. It provides a path for 28 community foundations to be endorsed as deductible gift recipients. In particular, the Justice Reform Initiative Ltd and Transparency International Australia are listed as new DGRs under this bill, and the existing listings of the Australian Sports Foundation Charitable Fund and the Victorian Pride Centre are extended. There are many worthwhile organisations that are identified. I wanted to pick out the Justice Reform Initiative and Transparency International to dovetail that with the government's broader initiatives around greater transparency and probity in government. I think it's really important that this bill gives them DGR status.

To conclude, I'd say this is a TLAB that provides for a number of important measures. Small business lies at the heart of our economy. It employs 5.2 million people—almost half the workforce—and it provides so much more than that. It provides people with opportunity—to work, to be entrepreneurs, to be business owners and to live dreams. But small businesses can also be vulnerable on occasion. Measures like this are vitally important to give small businesses the supportive environment they need to be able to thrive. I very much support this bill and look forward to seeing its passage through this House.

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

I rise to speak on the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. It has been said by many colleagues on both sides of the House that small business is the lifeblood of our economy, and I couldn't agree more. But, yet again, the small-business community has been let down by a Labor government. Unfortunately, Labor governments really don't have much of a clue when it comes to small business.

Let's look at the different components of this bill that are meant to help small business. When you're in small business, cash—and cash flow—is king. You need it to invest, you need it to put on more staff, and you need it to buy equipment. As governments, it's our responsibility to make sure that businesses have as much cash as possible so they can invest in their business. First, we have the reinstatement of the coalition's instant asset write-off initiative for purchases of equipment with a value of up to $20,000. The only issue with this figure is that the coalition introduced the same figure in 2015, and I reckon that what you can buy for twenty grand in 2024 is probably a little bit different to what you could buy for 20 grand in 2015. As far as I'm concerned, there should be no limit on the instant asset write-off for small business, because it helps cash flow, and I want to take the time to explain why I know this would benefit our country.

Many people who aren't in business or haven't been in business simply don't understand what an asset write-off is, which is fair enough because it doesn't affect them—they don't think it affects them, but it does affect them indirectly. A business that buys a piece of equipment for that business has to depreciate it over a certain number of years. In most cases it's four, but, depending on the industry and the equipment purchased, it can be up to 10 years. To put it in layman's terms, this is akin to a wage-earner who has to buy tools or clothes for work, which they can claim as a legitimate deduction at tax time. Say you bought goggles and tools for a thousand bucks. If you were a small business, under the small-business rules you would have to depreciate that. In other words, of the $1,000 you outlay this year, you would be able to claim $150 the first year and then, for the next three years, you would be able to claim up to $300. It would take you four years to get that tax benefit, even though you'd actually outlaid the $1,000 this year. That's what small businesses have had to endure for years in this country. It seems unfair, right? That's because it is.

It also affects the economy in general because many small businesses operate through a trust. A lot of the time it's a husband-and-wife operation and they pay each other equally, which is fair enough because they put in an equal effort. The problem is that, say the trust earns $200,000 in a year, they have to pay tax on that $200,000 whether or not they take it. I can tell you from personal experience that, as a small-business owner, you don't take that money out of there. You take enough to live on and you leave the rest in there because you know that, ahead, you might have to buy equipment, you might want to expand your business by putting on new staff or you might need to soften the blow next time there's a Labor government in power. Because they are not able to write off the entire amount immediately after making the purchase, small businesses put off making large purchases until they know they have some type of cushion.

The problem is that, when the Treasury or the PBO give advice to the government of the day, they only talk about the immediate effect on the government. In only allowing small business to depreciate the purchase of assets over four years, instead of all in one year, they are concerned about the cash flow deficit to the Commonwealth, and I get that. However, they don't factor in that, if you allowed small businesses to write off the entire amount immediately, they would make larger purchases more often. The government would collect GST on that. The businesses supplying the goods would make a profit on those goods and pay taxes on those profits. They'd need to employ more people to meet the extra demand of businesses purchasing extra equipment, and those employees would pay personal income tax. All of that would more than make up for the cash flow issue created by the instant deduction.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Order! Given that quorum is not present, the chamber will suspend until quorum is returned.

Sitting suspended from 17:54 to 17:59

( Quorum formed)

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

The other benefit we have now is that, because we had a trial during COVID where small businesses were able to write off large purchases immediately, we don't have to guess anymore. That resulted in record tax receipts, which was a major contributor, along with record contributions from the mining and resource sectors, to the surplus created by the previous coalition government that this Labor government have, of course, taken the credit for. It's kind of ironic that the industries that this government despise and don't support—coal, gas, agriculture and small business—are actually going to supply the funds for them to waste on all the non-income-producing industries like renewables et cetera.

The other issue with this bill is the 30 June 2024 cut-off date. Many small businesses will only find out about this initiative when they go to their accountants to do their tax for the 2024 financial year, and that will be too late for them to take advantage of it. The date needs to be extended until at least 2025—or it should have no expiry date—giving small business certainty.

Sadly, we've just found out that five per cent of small businesses shut during the last year, which is the worst result since the GFC. One common denominator between the last 12 months and the GFC is a federal Labor government. Having been in small business since 2001, I can say that between 2001 and 2006, under John Howard, my business grew 300 per cent. From 2007 to 2013, it grew less than five per cent. From 2013 to 2019, when I entered this place, there was a 45 per cent increase. This was purely because of the government of the day.

Business confidence is something that you cannot buy. Small-business owners that I associate with, that I talk to and that I know personally all have the same attitude—that is, when Labor is in we batten down the hatches and prepare for the worst. You don't spend and you don't invest, because there is no trust.

Let's talk about the electricity incentive. It's a great idea in principle, but, again, unless you've been in small business, you wouldn't understand that it doesn't really help most small-business owners unless they own the premises that they're operating out of, and as we know most businesses rent the premises. So, in offering them incentives to upgrade the equipment, that would be the landlord's equipment; it wouldn't be their equipment.

In the 20 years that I rented premises, I wasn't really interested in upgrading the landlord's equipment, as when I left the building he would enjoy the benefits. If you really want to get serious about this then you need to make sure that the landlord, not the business owner, is the one who's getting the benefit of upgrading the equipment. So, either you're doing this because you know that it won't be taken up, because you don't want to spend the money, or you really just don't understand business. I don't know which it is.

On superannuation, 20 years ago a local smash repair business bought a shed, which he operates out of, with his self-managed super fund, for around $500,000. Of course, real estate has gone up a lot over the last 20 years. Now it is valued at over $3 million. Under the new rules proposed by this government, he will now have to pay tax on the $2½ million gain even though he hasn't actually sold it. He hasn't received any money. So my question is: if the real estate market tanks in the next two years, after he has paid this tax, and it goes back to being worth $1½ million, will there be a refund? You cannot possibly tax people on money they haven't earnt.

It's just absolutely incredible to go down that path—not to mention farmers, many of whom have self-managed superannuation funds and own property that they run livestock on. They're going to be slugged with these bills because the property has now been valued at over $3 million. They're going to have to sell those properties, which means that they won't be able to run as much livestock, which is going to create a shortage and increase prices to the end consumer. It just goes on and on. There is just no business acumen at all in this government. Only the coalition understands small business, and small business only ever thrives under coalition governments. Those, ladies and gentlemen, are the facts.

Dai Le (Fowler, Independent) Share this | Link to this | Hansard source

Locally owned small businesses are the backbone of the community, and it is imperative that measures are taken to ensure the continuity of their success and livelihood. Throughout Fowler, you will find a multitude of small businesses, ranging from family grocers, family run restaurants, family run banh mi bakeries and special novelty shops that are a critical source of employment and income and a space for interaction. This comprises 99 per cent of the businesses in the Fowler electorate. Therefore, I see the uplifting and empowerment of these small businesses and their growth as a fundamental and necessary action to demonstrate appreciation for their contribution to the community at large.

My electorate of Fowler has over 16,000 small businesses, and undoubtedly this number well continue to grow exponentially, with a number of migrant and refugee families settling here over the decade. Many of these families rely on their self-owned business for their livelihood and as a means of employment. It is my understanding that this bill hopes to provide a pillar for small businesses in Australia through various schemes that seek to ease financial pressure and provide incentives that ensure the future of small businesses in a post-COVID world.

The instant asset write-off of $20,000 is presented as a philanthropic and adequate measure to advance the endurance of small businesses. Over these few years, the available instant asset write-off for small businesses has been in flux, ranging from $1,000 to $150,000. During the pandemic, the government at the time had implemented an instant asset write-off of $150,000 for businesses turning over up to $500 million. These measures, while drastic compared to previous years, were a necessity to keep our economy moving during difficult and unprecedented times. With these measures ending on 30 June 2023, I'm glad that the government was proactive in ensuring this did not fall by the wayside.

However, in the 2019 financial year, pre COVID, the instant asset write-off for small businesses was $30,000. But this new measure has been reduced to the 2016 level. We live in a vastly different time to 2016—a time when hardworking families and small businesses are struggling with a cost-of-living crisis. Inflation is on the rise. Food, fuel and property prices are going up and so are the costs of running a small business. Equipment costs are going up and so are electricity and water bills. That is not even including the other administrative costs of running an SME.

Despite economic conditions for small businesses seeing a slight improvement, there is still an air of uncertainty, considering that small businesses were disproportionately affected by COVID. It is undeniable that the devastating impacts that this pandemic brought still linger, and small businesses face the brunt of this. I know that the small businesses in Fowler are still recovering from the pandemic and are struggling to stay afloat. Now that we are seeing a 13th interest rate rise, I have no doubt that this will cause further pain to many in our community and Western Sydney.

A constituent Venessa Tang, who owns a homeware shop in Cabramatta, says she is concerned about the accumulation of normal tax, GST tax and income tax that small businesses are burdened with amidst rising interest rates and increasing prices conjured by the pandemic. She highlights the challenges of small-business owners, who are struggling with the cost of living and doing business like petrol, saying that these increased prices have negatively affected her business turnover and add to the risk of her losing her business.

If it's apparent that small-business owners like Vanessa are struggling, why is the amount of instant asset write-off being reduced? It is not drastic to say that the assumption that small businesses will bode well in the coming years, following this bill, is disillusioned foresight. Furthermore, this incentive is great if small businesses want to buy smaller goods, like kitchen facilities or computers, but it is not sufficient for those who may need to grow or expand their business with better, yet more costly, equipment or machinery.

In their submissions to the Senate inquiry, the National Electrical and Communications Association and the Australian Chamber of Commerce and Industry have both called for the instant asset write-off to be increased. NECA, who represents over 6,000 people within the electrical contracting industry, has urged the government to increase the instant asset write-off to $50,000 dollars. As they have rightly said in their submission, any high-tech equipment and hardware within the sector would exceed $10,000. If the instant asset write-off were increased, SMEs and contractors would be able to recover more of their investments. I urge the government to listen to those who have the lived experience of running a business and support any measures to increase the return on investment for small businesses; otherwise we could see detrimental impacts on the SME economy in the long term.

A similar issue was raised in the submission from the Institute of Public Accountants, where 75 per cent of their members work with and advise small businesses. Their submission focused on the temporary nature of the tax deduction scheme, where the government seems unable to commit to granting certainty for small businesses, preventing them from being able to plan for the long term. Additional certainty encourages sustainable business growth, creating an incentive to invest in technology and equipment. If the intent of the policy is to foster the growth and productivity of small businesses, making the write-off permanent at a higher threshold is the optimal solution.

The submission from the Mortgage and Finance Association of Australia reiterates the burden of economic pressures, inflationary pressures and the increased cost of living on small-business owners. The reduction of the instant asset write-off will place a heavier financial burden on small businesses. This struggle, in conjunction with the challenges of rising operational costs and market interest rates, will exhaust the funds of these businesses and could lead to worker lay-offs, reduced wage growth and, in the worst case, businesses ceasing to operate.

According to the ABS, the rate of business closures is at its worst, with more than 15 per cent of businesses failing in the last 12 months alone. This is the highest it has been since the global financial crisis. Half of the Australian businesses that started in 2019 were permanently closed by June this year, and small businesses are undoubtably at further risk of this, with 60 per cent of sole traders closing their doors. Therefore, Fowler's unemployment rate of nine per cent may see a dramatic surge in the coming years. With this increase in unemployment, more people in the electorate will have to rely on welfare payments from the government, placing a heavy burden on the government's social security and welfare expenses. At the same time, according to the RBA's findings in 2021, small businesses face more challenges in accessing funds through equity and obtaining funding through banks. With inflation on the rise, customers are struggling and hesitating to spend impulsively. Business owners are also struggling, trying to cut costs where possible. It's the government's duty to facilitate the recovery of small business in a post-COVID world, yet the bill fails to take into consideration the context and reality that small businesses face.

A considerable number of small businesses in the Fowler electorate are entrepreneurial ventures founded by minorities—immigrants, women and people without higher education. Support from government policies, without a doubt, can empower and facilitate entrepreneurship and reduce financial risk for these groups of people, who do not have the qualifications to seek employment elsewhere. Reducing the instant asset write-off serves as a disincentive, creating great financial risk and greater uncertainty for small-business owners that come from working-class backgrounds.

The social cost of rising unemployment affecting these particularly vulnerable groups is far too great to ignore. Without continuing efforts to effectively help small businesses retain operations, prolonged unemployment for these groups of people will have a harsh impact on their quality of life as well as their mental and physical health. The loss of self-identity and confidence resulting from unemployment not only compromises their relationships with families and social networks but also exacerbates the dwindling sense of membership in the community. These psychological impacts and other factors, such as insufficient education or English skills, operate as barriers to reemployment. Notably these work to further the problems of inequality within our area and between regions.

As I have mentioned, many small businesses within the Fowler electorate are family owned, which makes it incredibly vital that the source of income for these families is not economically affected. The pervasive ramifications of COVID-19 on the economy dictate that, with the reduction of the instant asset write-off, many working-class households will struggle to provide for their families at a sufficient level. With the median weekly income of families in Fowler naturally decreasing from $1,529 following this level of instant asset write-off reducing to the levels of 2016-19, the standard of living of these households will be reduced.

The Australian Automotive Dealer Association, a representative body for car dealers in Australia, which includes family owned small businesses, similarly advocates for a higher threshold for the instant tax write-off for small businesses in 2024. In their submission, they note that the amount proposed in the amendment is insufficient to support the investment decisions of enterprise in this industry. In Fowler, many of these small businesses are family owned by migrant families and refugees, with 77.3 per cent of families with parents born overseas. These families, who have come from diverse backgrounds, have demonstrated entrepreneurship to create a life for themselves in Australia and should have adequate measures implemented to support their livelihood.

The lax attempt to revive and provide relief for small businesses makes it harder for them to survive. The implementation of this bill may see the closure of many small firms in the education, healthcare, retail and social assistance industries that do not have sufficient working capital or cash flow to maintain operations as they recover from COVID-19. This issue is especially critical for ancillary services provided by small businesses in Fowler's substantial migrant community, such as legal, medical or financial services that focus on providing services for residents of Fowler that struggle with English. This niche differentiation of small businesses in this area is paramount to the vitality of 76.7 per cent of households in Fowler that do not speak English in their household.

The foundation of our community infrastructure may collapse if we lose small businesses and their imperative function. Moreover, the ongoing operations of small businesses stimulate competition, keeping prices low and simultaneously keeping levels of innovation high. Curtailing the extent of support that small firms receive will intensify their struggles to compete with larger businesses. This will engender a less diverse market for goods and services, creating an environment where larger businesses will dominate market segments and small businesses will be unable to compete. In many ways, this bill fails to provide significant relief for owners of small businesses and serves as a barrier for smaller firms to effectively maintain growth. It instead serves to further exacerbate the financial concerns in this period of economic uncertainty.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Brilliantly timed as always, Kim Houghton from the Regional Australia Institute has just texted me. He didn't know that I was going to be rising to speak on this very important bill, but he's let me know that new figures were released just today. There are 92,500 regional vacancies for October. As he says, that has remained flat over the past 12 months and has been at near-record highs since October 2022. Those are the regional job vacancies. He, like so many others, are concerned that these vacancies just aren't being filled.

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 is integral to small-business success. The coalition has put forward a worthy amendment to this particular bill, which I very much support, but I note with great interest that those opposite have all got to their feet, walked to the despatch box and talked about how small businesses are the heartbeat of the economy. Each and every one of them who utters those oft-used words is absolutely correct. It doesn't matter whether they come from a metro or a country electorate, I would like to think that each and every one of the other 150 representatives in the House of Representatives—including me, of course—knows that small business is the heartbeat and the lifeblood of the Australian economy, because it is.

I come here with a bit of skin in the game—a lot of skin in the game, in fact. I was a small-business owner and operator before coming to this place. Our business ran for eight years and continued with my two family colleagues after I entered parliament. It is a very successful printing and publishing firm in Wagga Wagga—MSS Media Services. I worked at a medium-sized business in Wagga Wagga, the Daily Advertiser newspaper, which at its zenith in the late 1990s and early 2000s employed more than 230 people. It was a good business which had a lot of union representatives from different industries—Printing and Kindred Industries Union, the Media Entertainment Arts Alliance, which was previously the Australian Journalist Association, of which I was a member for 21 years. So I come here with a balanced experience, knowing the value of unions, knowing the value of small business and knowing, as so many government members have said, that small businesses are the lifeblood of the economy.

I also want to point out that, while in government, we put in place the Australian Small Businesses and Family Enterprise Ombudsman. I know the job that Kate Carnell did in that role. I know the work that Bruce Billson carried on in that role. I would say to any small-business operator to have a look at that website—asbfeo.gov.au—because it is a very good and valuable source of information for everything from dispute resolution to wages, what is a 'casual', updated industrial relations, and mental health support. That's so important to a small-business owner and operator. The member for Menzies spoke earlier about the absolute burden—I welcome the Assistant Treasurer to this debate—of paperwork that small-business owners and operators do. I know we had various deregulation days where we tried to cut through red tape. While the Assistant Treasurer joins us, I will praise him. I have, publicly, in my electorate, praised him about what he is doing with cyberscams and nefarious characters who prey on our small businesses. I thank him and the member for Greenway, the Minister for Communications, for what they are doing because white-collar crime is such an impost on our small businesses. I think the member for Whitlam and the member for Greenway for building on the work we did in government to eradicate or at least reduce the amount of traffic that small businesses have to endure in this regard—unnecessary criminal activity.

Talking of the Australian Small Business and Family Enterprise Ombudsman—ASBFEO—it was established in March 2016. As I say, it is a valuable resource for small business. On its website, ASBFEO indicates that 97.5 per cent of Australian businesses are small businesses. Why wouldn't you want to support those small businesses?

Between 2020 and 2021, more than five million people—more than 42 per cent of the private sector workforce—were employed by small business. In that same financial year, small business contributed a third of Australia's gross domestic product. In 2021-22, there were 2½ million small businesses operating nationally, and the number of small businesses increased by seven per cent.

I am alarmed by the number of small businesses that have closed their doors in the past 12 months. I am alarmed by the amount of red tape that small businesses are having to wade through. I am alarmed by the high costs of energy for those small businesses. Appreciating the fact that Labor is putting in place an incentive for the instant asset write-off, and appreciating the fact that Labor claims that it was the originator of the instant asset write-off, way back—

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

2012.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Thank you, Minister—but also acknowledging the fact that this increased, and during COVID it was unlimited for businesses of a certain size, I note with some alarm—I was going to say derision, but I'll be a little kind—the fact that it's only $20,000. We heard the member for Mayo talking before about the number of food manufacturers in her South Australian electorate. As she indicated, you can't buy much for $20,000 when it comes to a piece of machinery that's going to be used in a food-manufacturing business.

Likewise, many of our small-business owners and operators are farmers. They're already worried about the appreciation test by which, if their farms somehow become more valuable over the course of 12 months, they're going to be taxed on the gain of that property before they actually even sell the property. That is a spectre looming large over those small-business operators who are farmers. But when you think about the sorts of farm machinery implements that are going to cost less than $20,000, to help your business become more productive, there are not that many. I know when we had it as an unlimited rate, when it was even higher than $20,000—up to $50,000—tradies were able to buy a ute, and that was such a boon for them. But under this measure, under the Labor measure, $20,000 for an instant asset write-off is not going to be much at all.

I appreciate that this bill was part of the May budget announced by the member for Rankin, who, just as an aside, didn't mention infrastructure, for the first time in a quarter of a century, in the first reading of Appropriation Bill (No. 1) on budget night, which was amazing in itself. But it is now 15 November. This measure runs out at the end of the financial year, on 30 June. For any farmer or business owner who is going to purchase a piece of equipment, and prospectively import it from Europe, or elsewhere overseas, and expect it to get here on time and be installed in their firm, their factory or their small business and operating in time to meet the measures according to the legislation—well, good luck. Good luck, because that is going to be a near impossibility. If you don't meet the 30 June deadline, tough luck. You don't get to have that instant asset write-off applied to that 12 months.

That simply isn't good enough. Let's face it: we're six weeks out from Christmas, and we know that in a lot of industries and a lot of sectors, not much happens leading up to Christmas and not much happens in the month after Christmas. So you're looking at a business deciding in February to make an investment in something worth up to $20,000 and having to purchase it, pay for it, potentially import it and have it installed—all by 30 June. Good luck! How's that going to happen?

Maybe in May next year, when the Treasurer gets to his feet and does his next budget, he will extend it. Maybe he'll roll over the instant asset write-off measure that's part of this bill for another 12 months. But those businesses that are wondering what to do between February and May are not going to know what's in the Treasurer's mind. They're not going to be able to second-guess him. For businesses, that uncertainty is quite disturbing. I appreciate, too, that there is a provision in this bill in relation to deductible gift recipients and charity status. We should do anything we can to ensure that businesses that are eligible can get DGR status. I know the member for Whitlam has had oversight of this and I know he goes out of his way to make sure that that is all as correct and accurate as it can be, so I thank him and commend him on that.

Small business for my own electorate—all politics is local—is very, very important. Just with the new instant asset write-off measure, we've got 19,600 small businesses that are going to rely on this measure. But I cannot understand—and I'm pleased that the minister is in the room—why it's only up to $20,000. That just defies logic. I know that we as a coalition government put it in as a COVID measure. I was around the cabinet table. I was around the Expenditure Review Committee table. I was very much part and parcel of all that decision-making as the Deputy Prime Minister. When we made it an unlimited instant asset write-off, I know that we received record tax receipts. It's like the old business axiom that you have to spend money to make money. It does cost government money. I get that; I appreciate that. But why wouldn't we want to be more productive?

Labor comes to office and talks about fee-free TAFE and about manufacturing in Australia. I say to the government: live up to what you are talking about. Don't just be a government of words; be a government of action. Put in place measures that, prior to May 2022, you said you were going to put in place. Put them in place now and live up to your promises, please. Do it for the sake of small businesses and for the sake of the economy, because you're not doing it at the moment. We were promised power price relief. It hasn't happened. Businesses expected that the government wouldn't put in place onerous industrial relations laws, and they have materialised. Businesses were promised they were going to get the instant asset write-off extended, but the amount is only $20,000. You can't get much of a ute, let alone a piece of harvesting equipment, for $20,000. While I appreciate that for accounting firms, law firms and other small businesses of white-collar fame you might get a photocopier, a shredder or something for 20,000 bucks, you ain't going to get much of anything that drives on wheels.

So please re-examine this. Please impress upon your Treasurer, who perhaps hasn't been to a farm anytime in recent months or years, that this is important. It's important for the farmers I represent. It's important for the farmers the member for Kennedy represents. These regional small businesses were the ones that kept us going during COVID. The government owes them that. It owes them the respect, it owes them the dignity and it owes them a fairer and better deal on these measures.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

It's good to follow my friend the member for Riverina in closing this debate, and I want to concur with all the nice things he said about me and utterly disagree with everything else he said! I thank all members who engaged in the debate on the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023.

Schedule 1 to the bill deals with the instant asset write-off, and there's been a fair bit of discussion about it, including from the member for Riverina and others. We say quite simply that it's going to improve cash flow and reduce compliance costs for small businesses. There's a $20,000 instant cash write-off available for small businesses, as defined within the bill, up until 30 June 2024. It was announced in the budget, and businesses have been on notice. I know, through the lobbying that I've had in my office, that many have gone out there and arranged purchases on the basis of these measures operating exactly as intended. Schedule 2 to the bill introduces the new small business energy incentive. This is a bonus of 20 per cent additional tax deduction until 30 June 2024 to help small and medium sized businesses electrify and improve their energy efficiency. Put together, this is a $60 million package to assist small businesses.

We certainly welcome the sincere and genuine engagement from crossbenchers on the issue. We are committed to supporting small businesses and medium sized businesses, and we've done that through both budgets but also between budgets, with the hard work that we've done. I point to one of the first acts of bringing business, community, unions and parliamentarians together, including some from the coalition benches, which was the skills summit, and you engaged in it as well, Deputy Speaker. When I talk to small businesses, they say, 'We can't get the staff we need.' So it's a big effort of ours, addressing the skills gap. The Prime Minister has just got back from a very successful trip to China for trade opportunities and to try to get our relationship, particularly our trade relationship, back on track with China. That's absolutely critical, and there are literally billions of dollars which will flow from the normalisation of trade arrangements, and that will have a massive benefit, particularly in the agricultural sector. There are lots of benefits there for small businesses, large businesses and the economy as a whole.

The member for Riverina talked about energy bill relief. I'm disappointed that he didn't vote, when he had the opportunity, for energy bill relief for small businesses and households in his electorate, but perhaps—

Hon. Members:

Honourable members interjecting—

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

he's doing his own very best to engage with and improve relations with our friends in Micronesia. I'm told he hasn't had a bowl of kava since!

But, seriously, there's a lot of work going on to support businesses. For these reasons and others, we won't be agreeing to the schedule 1 amendments that have been moved by the opposition. I do note they're uncosted. They're on the one hand criticising how much the government spends but on the other hand encouraging us to spend even more, through uncosted proposed amendments. The same goes for the member for Warringah, who has, I should say, genuinely engaged with us on it. I thank her and respectfully say that we won't be agreeing to those amendments, but we're always willing to engage with members of this place on their propositions. The government's measures have been carefully targeted to support small businesses, and the investments are where they're most needed. We think they stand on their own merits. The bill's been referred to the Senate Economics Legislation Committee, and the government looks forward to hearing the recommendations of that committee.

I'll just briefly address some of the lesser-focused-on schedules to the bill. Schedule 3 provides a pathway for 28 community foundations to be endorsed as deductible gift recipients. I want to thank Dr Leigh, the Assistant Minister for Competition, Charities and Treasury, for the great work that he's done in this area, truly reforming the way we deal with these sorts of issues. This will encourage philanthropic support for these foundations and contribute to the government's goal of doubling philanthropic giving by 2030.

Schedule 4 of the bill amends the income tax law to specifically list Justice Reform Initiative Ltd and Transparency International Australia as deductible gift recipients and extends the existing listing of the Australian Sports Foundation Charitable Fund and the Victoria Pride Centre to DGR status. Can I just say in relation to Justice Reform Initiative Ltd that I had the great pleasure of speaking to a former member of this place, Robert Tickner, when he was in parliament yesterday. He's playing a pivotal role in driving some of those initiatives. I commend the great work that he's doing in trying to build a coalition of support for these initiatives, which is around diversion programs and justice reinvestment programs. It's a broad coalition reaching across the political spectrum and working with former police commissioners and other eminent Australians to try and shift the dial on what we're doing in this area. I'm delighted that we're able to do something to assist that great organisation by providing DGR status for them as well.

Schedule 5 of the bill extends the Global Infrastructure Hub's income tax exemption for an additional year, to 30 June 2024, to avoid subjecting funding contributions from G20 members to income tax. That would be a perverse outcome.

Schedule 6 of the bill amends the income tax law with respect to general insurance. This is about more than deregulation and removing red tape. It's about removing unnecessary red tape by ensuring we have an alignment between accounting and tax and avoid unnecessary tax compliance burdens on the general insurance industry. There will be no impact on tax collected or tax burden, but it's about ensuring from an accounting point of view that those standards are aligned.

Schedule 7 of the bill introduces new arrangements for non-arms-length expenses rules for superannuation entities. The measure replaces the current rules for general expenses and better targets the application of these provisions. This will maintain the broader integrity of the superannuation tax system while addressing the potential for disproportionate outcomes.

I know the Senate committee had some discussion about this. What seems to have escaped some members of the committee, but not all of them, is that what we're providing through these measures is relief to the superannuation sector. All of the superannuation sector is getting relief from this, an otherwise disproportionate penalty regime and disproportionate accounting and record-keeping regime—which would be visited upon them—and relief from the risk of measures involved in non-arms-length expenditure.

This schedule is also about deregulation and removing red tape where it adds no integrity benefit. It has missed the attention of many in the other place who are protesting against it. This is actually a deregulation measure. If we don't do it—if we don't pass it—an even more onerous burden will fall upon entities within the superannuation sector due to rulings that have been pronounced by the independent tax commissioner in this area. It's a dereg measure and important that we do it.

Schedule 8 of the bill clarifies that the Australian Financial Complaints Authority has jurisdiction to consider complaints that relate to superannuation. It will ensure that consumers who have superannuation related complaints against financial services organisations maintain access to external dispute resolution. Again, this is a corrective measure beneficial to consumers, which deals with the consequences of a recent Federal Court decision involving MetLife and AFCA which interpreted the law. We accept the court's decision, but it handed down an interpretation of the law which was not what everyone understood it to be. So we are clarifying that issue by doing what we believe to be the status quo ante. It is very pro-consumer. With those comments in mind, I once again thank members for their contributions to the debate and commend the bill to the House.

Question unresolved.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

As it is necessary to resolve this question to enable further questions to be considered in relation to this bill, in accordance with standing order 195, the bill will be returned to the House for further consideration.