David Pocock (ACT, Independent) Share this | Hansard source

I move amendment (1) on sheet 1926:

(1) Schedule 5, item 1, page 46 (after line 4), after section 328-460, insert:

328-465 Additional technology investment boost deduction

Normal or late balancers deduction for 2023-24 income year

(1) You can deduct for the 2023-24 income year an amount that is equal to the sum of the lower of $20,000 and 20% of the total amount (which may be nil) of your expenditure to which subsection 328-470(1) applies.

Early balancers deduction for 2024-25 income year

(2) Subsection (1) does not apply if your 2023-24 income year starts before 1 July 2023. Instead, you can deduct for your 2024-25 income year an amount that is equal to the sum of the lower of $20,000 and 20% of the total amount (which may be nil) of your expenditure to which subsection 328-470(1) applies.

These are bonus deductions under the Income Tax Assessment Act 1997

(3) The Income Tax Assessment Act 1997 has effect as if this section and section 328-470 of this Act were provisions of Division 25 of the Income Tax Assessment Act 1997.

(4) Sections 8-10 and 355-715 of the Income Tax Assessment Act 1997 do not apply in relation to a deduction under this section.

328-470 What expenditure qualifies for the additional technology investment boost

(1) This subsection applies to an amount of expenditure if:

(a) you are a small business entity for the income year in which you incur the expenditure; and

(b) you incur the expenditure in the period starting on 1 July 2023 and ending on 30 June 2024; and

(c) you can deduct the amount of the expenditure under a provision of a taxation law (other than section 328-465 of this Act) whether or not in, or wholly in, the income year in which the expenditure was incurred; and

(d) you incur the expenditure wholly or substantiallyfor the purposes of your digital operations or digitising your operations; and

(e) the expenditure is on acquiring, or acquiring a right to use:

(i) a product covered by subsection (3), in circumstances where you did not use the product (or a different version of the product) in your operations before 1 July 2023; or

(ii) an upgrade, of a product covered by subsection (3) that you were already using in your operations, in circumstances where the upgrade includes one or more substantive additional product features that provide you with a new digital adaptation capability; and

(f) if the expenditure is on a depreciating asset:

(i) the only balancing adjustment events that occur for the asset at a time during the period referred to in paragraph (b) when you hold the asset occur because you stop holding the asset because of an event or circumstance referred to in subsection 40-365(2) (about involuntary disposals) of the Income Tax Assessment Act 1997; and

(ii) you start to use the asset, or have it installed ready for use for a taxable purpose, before 1 July 2024.

Working out whether you can deduct an amount of expenditure on a depreciating asset

(2) For the purposes of paragraph (1)(c), in working out whether you can deduct an amount of expenditure on a depreciating asset, assume that:

(a) you will continue to hold the asset throughout its effective life; and

(b) throughout that effective life, you will use the asset for a taxable purpose to the same extent as you use it, or have it installed ready for use, for a taxable purpose in the income year in which you start to use it, or have it installed ready for use, for a taxable purpose.

Covered products

(3) The following kinds of products are covered by this subsection:

(a) digital business management tools;

(b) digital accounting tools;

(c) website creation and/or management tools;

(d) e-commerce tools;

(e) digital end-to-end retail solutions tools;

(f) digital analytics tools;

(g) digital marketing tools;

(h) cybersecurity tools.

Excluded expenditure

(4) To avoid doubt, subsection (1) does not apply to the following kinds of expenditure:

(a) salary or wage costs;

(b) capital works costs for which you can deduct an amount under Division 43 of the Income Tax Assessment Act 1997;

(c) financing costs, including interest, payments in the nature of interest and expenses of borrowing;

(d) training or education costs;

(e) expenditure that you incur that forms part of, or is included in, the cost of your trading stock.

Note: For deductions relating to training or education costs, see section 328-445.

I thank the government for bringing the Treasury Laws Amendment (2022 Measures No. 4) Bill, the TLAB4, before the Senate. I would like to talk about the amount of time that small business will have to make use of the Skills and Training Boost and the Technology Investment Boost. These are great measures for small businesses to help them digitise to drive genuine productivity among small businesses, but they have two weeks to make use of this funding. We're told that it will be backdated to March and small businesses can keep their receipts and claim it, but every small business we in my office have talked to has had no idea about this scheme. It seems that it won't have much effect, and, potentially, the only people to benefit from this will be the government's bottom line, given that there was money budgeted for it.

This amendment seeks to ensure that small businesses do have a year to digitise and claim some of that back on tax. This is incredibly important for our small businesses who are seeking to become more efficient, to increase productivity, and indeed we hear a lot about productivity from both sides of politics at the moment. I thank the former government for their work on this, targeting small businesses and ensuring that they are being supported in digitising and getting their systems up to speed. We know that a lot of small businesses are still doing it tough coming out of COVID. They are under pressure, so this amendment seeks to ensure that they do have 12 months to be able to use this measure.

Minister, I understand that the original cost of this measure was $1 billion. However, I had it recosted by the Parliamentary Budget Office, and the revised costing came in at $600 million. I'm wondering whether the government has recosted this measure over the course of the financial year.