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

It's always a tough act to follow Senator Bragg on franking credits—or superannuation, for that matter—with his keen interest and knowledge. But I rise to speak on schedule 5 of the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023, in relation to small business. This is another bill that, when introduced, presented potential unintended consequences for small businesses—consequences that small-business owners weren't made aware of. Thankfully, key accounting and tax bodies noticed the risks and raised them with my office. I want to thank Chartered Accountants Australia and New Zealand, Certified Practising Accountant Australia, the Tax Institute and the Institute of Public Accountants for their engagement on these matters. I also want to thank the government for revising the explanatory memorandum to address the concerns raised on behalf of small businesses.

It's common practice for small businesses to use capital raisings and franked dividends to facilitate the departure of one or more shareholders from a company—for example, when a new generation of family members invests in the family business and a franked dividend is paid to the departing generation of shareholders. Those are franked credits that the departing shareholders have legitimately earned, and they deserve to be treated as legitimate. The government has offered assurances that such practices are not intended to be captured by this measure and has amended the explanatory memorandum to clarify this point as well as making substantive amendments to refine the scope of the measure. Given these changes, I am now in a position to support the amended bill.

I'll also be moving a second reading amendment on the small and family business concerns related to this bill. I hope that, moving forward, my parliamentary colleagues will commit to consulting the small business community on legislative changes that have the potential to negatively impact them. Too often legislation is introduced and passed without small businesses being made aware of how they might be affected. We know that most small-business owners are flat out running their small businesses and not necessarily checking in on what the parliament is discussing. We can and must do a better job in this place of consulting directly with the people impacted by our decisions, and I'd argue that we need to do so early in the process rather than at the last moment or, worse, after legislation has passed.

This was one of the clearest messages we heard from small-business owners at a breakfast I hosted with Senator Maria Kovacic and Allegra Spender MP here at Parliament House. Over 120 people came along at 7.30 on a Monday morning to discuss the challenges small businesses are facing and how policy can be better designed to support them rather than hindering them and the work that they are doing. Many of those in attendance were Canberra small-business owners who've never been invited into this building. They drive past it all the time, but they've never actually been invited in here to voice their concerns and opinions or to learn how proposed government policies might change their lives for better or worse. We heard firsthand how small businesses are struggling post-COVID to make things work and are struggling to try and increase wages to ensure that staff can pay for the things they need and to be able to retain staff. As small-business owners in a competitive environment with the challenges we're facing, that often means that they have to pick up extra shifts. They have to do nights where they're doing payroll or spend a Saturday or a Sunday working on their business. This is one of the things that often isn't acknowledged when we impose additional requirements on them when it comes to legislation—often well-meaning requirements, and even changes that small-business owners would agree with. We need to understand and consider the impact that that has on them and their ability to run their small businesses.

We heard at our small-business event that when costs rise small-business owners are hit twice. Their power bills go up at the office and at home. Their supplies go up in cost, as do their groceries. Their margins shrink as the pressure grows to make ends meet. Interest rates rise and their mortgage repayments climb, as do their business loans. Then they're forced to refinance to bring capital into the business and cover the squeeze on revenue. A Treasury report released last December found that one in five small-business owners had been diagnosed with a mental health condition in recent months. These people and the businesses they run are the lifeblood of our economy. They're vital to the prosperity of our communities and to addressing Australia's productivity slump. Most small-business owners are inherently optimistic, but we know that behind the scenes many are burning themselves out, sometimes wondering why they went into business in the first place and asking themselves if they'd be better off just shutting up shop.

This has to change, and that starts with involving small-business owners in the policy development process, consulting them every step of the way. Instead of making their lives harder, we should be looking for opportunities to support the great work they do. The decisions we make here should remind people who start their own businesses that they are right to be optimistic and that we in this place want them to bet on themselves, to back themselves to start that business, to create new things, to take calculated risks and to play their part in shaping the future of our economy and our country.