Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Thank you to those senators who have contributed to the debate on these two important bills. The Australian economy is facing significant structural adjustments, and small businesses will play a very important role in that structural adjustment. Small businesses are adaptable, flexible and able to respond quickly and profitably to changing circumstances. Small businesses are often the entities that test and pioneer innovative ideas and business practices which are critical to future economic growth, job prospects and improved living standards. As such, the government's small business and jobs package that we are asked to vote on today is a central part of the government's long-term economic plan for stronger growth and more jobs and is designed to ensure that every Australian has the best possible opportunity to get ahead.

All of this makes it particularly important that the policy settings that we have put in place support small business growth and innovation. The Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 amends the tax law to lower the company tax rate by 1.5 percentage points to 28.5 per cent, potentially helping up to 780,000 incorporated small businesses to retain more earnings and improve their cash flow. The lower tax rate will apply from 1 July 2015 for incorporated small businesses. These amendments will also enable small companies to distribute surplus franking credits accumulated in previous years, reducing the tax their owners pay when they receive dividends.

The Tax Laws Amendment (Small Business Measures No. 2) Bill 2015 amends the tax law to raise the immediate deductibility threshold under the small business simplified depreciation rules from $1,000 to $20,000 from 7.30 pm on 12 May 2015 budget night until 30 June 2017. This will allow small businesses to immediately deduct assets costing less than $20,000. Small businesses that purchase assets of $20,000 or more can use the simplified pooling arrangements and depreciate these assets at 15 per cent in the first year and 30 per cent per year thereafter. The usual lock-out rules will also be suspended for the same period so that businesses that may have opted out of those simplified depreciation rules in recent years can choose to use them now that the threshold will be significantly higher.

These amendments will also provide a significant benefit to many primary producers with 97 per cent of primary producers being small businesses. To provide further assistance, the bill will also amend the tax law to allow all primary producers to access accelerated depreciation rates on fencing, water facilities and fodder storage assets from 7.30 pm on 12 May 2015. Primary producers can immediately deduct expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills, as well as fodder storage and assets such as silos and tanks used to store grain and other animal feed. These expenditures can be depreciated over three years. The amendments will improve farmers' cash flow, resilience and the need to track expenditure over time. Supporting small businesses and farmers in the hard times is essential to the success of the nation's economy at large. I commend these bills to the Senate.

Question agreed to.

Bills read a second time.