Katy Gallagher (ACT, Australian Labor Party) Share this | Hansard source

As with the previous bill, I seek leave of the Senate to incorporate my comments into Hansard, mindful of the desire to get to the next piece of legislation.

Leave granted.

The incorporated speech read as follows—

I rise to make a contribution on the Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017.

In the interest of time, I will keep my remarks on this legislation brief - however, for a broader canvassing of Labor's view on issues confronting small business and our initiatives in this space, I would refer Senators to the contributions of my Labor

colleagues Andrew Leigh and Julie Owens to the debate on this Bill in the House of Representatives.

On the substance of the Bill, Labor will be supporting the Government's extension to the period in which small business entities can temporarily access expanded accelerated depreciation rules by an additional 12 months to 30 June 2018.

Indeed, it is worth noting that it was Labor that first identified the policy merit in increasing the immediate deductible threshold for small businesses. It was the former Labor Government in 2012 reformed the rules to enshrine an increase to the deductibility threshold to $6,500.

We did so because after careful consideration we believe this was a fiscally responsible level that could be sustained over the longer term, while also encouraging stimulatory investment by small firms.

Following the 2013 election, and in one of the more short-sighted decisions from its horror 2014-15 Budget, the Abbott Government chose to abruptly axe Labor's reforms and reduce the immediate deductibility threshold to just $1,000.

Of course, history records that just 12 months later the Abbott Government radically reversed its position - reinstating and extending the measure at $20,000 for two years, while steadfastly neglecting to acknowledge Labor's advocacy on behalf of small business.

And while Labor is offering its support to extend the time in which small businesses can access the immediate deductibility threshold at $20,000, it is imperative that we highlight some concerns we have with the Government's handling of this measure.

Principally, that the Government's endless chopping and changing of this measure over its time in government has created significant uncertainty in the small business sector.

By continuously shifting the threshold values and legislating sudden termination dates, the Government has unwisely created investment cliffs while also making it virtually impossible for small business to plan for the long and even medium term.

We also note that this measure is estimated by Treasury to see the Commonwealth forgo $950 million in revenue over the course of the next financial year.

This is clearly not an insubstantial cost to the Budget, and expenditure of this nature ought to be justified.

This measure in its current iteration, with its $20,000 threshold, will have been operating for two full years on 1 July 2017. This is an appropriate time to now run a critical eye over its effectiveness and value for taxpayer money.

Labor will do so, seeking to validate that the economic benefits of the current threshold limit claimed by Government are actually delivering for small business and for the taxpayer.