Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, the Minister representing the Treasurer, Senator Cormann. Can the minister update the Senate on the government's plan for jobs and growth in our economy?

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

I thank Senator Edwards, the chair of the Senate Economics Legislation Committee for that question.

As I was saying, last night the Treasurer delivered the government's plan for jobs and growth. Last night the Treasurer delivered our plan to secure the successful economic transition for resource-investment-driven growth to broader drivers of growth in a diversified, stronger and innovative economy. He delivered our plan to live within our means by getting our budget onto a sustainable foundation for the future.

Our plan includes innovation in science programs for start-up businesses. Indeed, earlier today the Senate passed one of the key features of our plan, our innovation and science agenda, in the incentive arrangements that we are putting in place for start-up businesses. Our economic plan for jobs and growth includes our defence plan for local high-tech manufacturing and technologies, spearheaded by my good friend and valued colleague the Minister for Defence, Senator Payne. It includes our export trade deals to generate new business opportunities across key markets in our region, with the best trade minister ever, in then Minister Andrew Robb, having finalised trade agreements with China, South Korea and Japan, and with the new trade minister, Mr Ciobo, now focusing on India and Europe to further improve the opportunities for Australian exporters to access those markets and be successful in those overseas markets.

We have, of course, delivered tax cuts in this budget: tax cuts to average weekly earners and also tax cuts for small- and medium- size businesses and, over time, bringing the company tax rate down to 25 per cent—something that last year the Labor leader, Bill Shorten, said was something that we should work on together on a bipartisan basis. How things have changed! They are now into the class warfare. We on this side know that a more competitive company tax rate is good for jobs and growth. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I ask the minister how the government is encouraging small businesses to invest and employ more Australians?

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

Small- and medium-size businesses are driving jobs growth in Australia. Right now 70 per cent of all employees across Australia are employed in a small- or medium-sized business. These are real jobs in real industries.

For example, 96 per cent of employees in agriculture are employed by a small- and medium-size enterprise, and 84 per cent of construction workers and 80 per cent of employees in professional services are employed by a small- or medium-size enterprise. Most of the employment growth is generated by small- to medium-size business.

In this budget, we are building on the measures that we initiated in last year's budget, providing further tax cuts to small- and medium-size business by lifting the turnover threshold for small-and medium-size business accessing various tax benefits from $2 million to $10 million from 1 July 2016. This means that all businesses with a turnover of less than $10 million can access tax incentives available to small business. This means 870,000 businesses employing 3.4 million Australians will have their tax rate reduced.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister aware of any alternative approaches, and what would their effect be on jobs and growth?

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

There is an alternative approach, and it is an approach that would hurt our economy and cost jobs. It is an approach that would undermine our successful transition from resource-investment-driven growth to broader lines of growth in a more diversified economy. It is Labor's approach of taxing more, borrowing more and spending more. It is a failed approach, which was proven to fail when Labor was last in government. When they were last in government they left behind a weakening economy, rising unemployment and a budget position that was rapidly deteriorating.

Today economic growth is stronger, the unemployment rate is lower than had been anticipated and the budget position is improving. Of course, Labor wants to impose more than $100 billion in new taxes on the economy—not to reduce taxes and spare the economy but to spend more. This is exactly the wrong thing to do. It would hurt growth and it would cost jobs. Their ill-thought-out approach to negative gearing, reducing investment; their ill-thought-out approach to the carbon tax, losing investment— (Time expired)