John Williams (NSW, National Party) Share this | Link to this | Hansard source

When Senator McKim has finished, I will continue. My question is to the Minister representing the Minister for Infrastructure, Transport and Regional Development, Senator McKenzie. Can the minister update the Senate on how small and medium sized businesses in regional Australia will benefit from the tax relief provided by the Liberal-National government?

Bridget McKenzie (Victoria, National Party, Minister for Regional Services) Share this | Link to this | Hansard source

The Liberal-National government is absolutely focused on delivering on our plan for a stronger economy. We know that a stronger economy relies on a stronger regional Australia. The government believes that lower taxes will benefit everyone. After all, it's not our money; it's theirs. We value reward for effort and getting in and having a go. That's why our new lower tax legislation will benefit small and medium businesses in regional Australia so they can grow their businesses and create more jobs faster in local towns and cities. With small businesses making up 82 per cent of the agriculture, forestry and fishing industries, and family farms being the most widespread form of business in the rural sector, tax relief has never been more important for our regional economies. Regional businesses with a turnover below $50 million will face a tax rate of 25 per cent in 2021, six years earlier.

In the state of New South Wales, Senator Williams, 36 per cent of small businesses are located outside the major metropolitan centres of Newcastle, Sydney and Wollongong, employing millions of your fellow New South Welshmen. They will benefit. In your home town of Inverell our tax cuts will help everyone from the local newsagents in Otho Street to the larger employers such as Boss Engineering, who employ 116 people. In a town of 12,000, that makes a significant difference. When we spoke to Boss Engineering and asked what the tax cuts would mean to them, they said: 'It means we can be more competitive. A tax cut of this nature will allow us to compete with imported products and means we can look at pricing to get an even bigger market share. Importantly it means we can employ more locals.' With more than three million small businesses in Australia meeting the threshold, tax relief is a direct shot in the arm that will result in more jobs and improve productivity. The Liberal-National government believe reducing taxes will mean we have the right conditions to employ more locals.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Williams, a supplementary question.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I thank the minister for that good news and I ask: how will families living in regional Australia benefit from the government's tax agenda?

Bridget McKenzie (Victoria, National Party, Minister for Regional Services) Share this | Link to this | Hansard source

That's the one thing I want to stress today—that lower taxes aren't just an end unto themselves; lower taxes support more investment, higher productivity, more jobs and better wages in regional Australia. For our trade exposed industries such as agriculture and mining it means we can compete with the USA and the UK in global markets. The Liberal-National tax relief will allow regional businesses to reinvest their savings into their businesses or staff or to manage cash flow. Because we believe in and support small businesses, this government has already extended our very popular $20,000 instant asset write-off that was first introduced in 2015-16. We have cut nearly $5 billion in red tape. We've simplified the BAS, something I can remember my mum as a small-business owner spending a lot of time and money completing. We've protected small business from unfair contract terms and, importantly, we've instigated an effects test.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Williams, a final supplementary question.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I thank the minister and I ask: are there any threats to economic growth in the regions?

Bridget McKenzie (Victoria, National Party, Minister for Regional Services) Share this | Link to this | Hansard source

It's a good question. I think there is. It's called an elected Labor government. Labor claims to be the friends of small business, yet its policies will hit them hard with more taxes. In fact Bill Shorten's five-point plan is simply two words: more tax, more tax, more tax, more tax and more tax. Under Labor, you will actually legislate to increase the tax rate from 25 per cent to 27.5 per cent for these small and medium businesses after your backflip. Companies with up to $50 million are not the big end of town. They are hardworking Australians employing millions of people right across regional Australia. You will slug Australians with this tax, which will mean that they won't be able to employ more people locally, as Boss Engineering does. You don't understand that the tax paid by hardworking Australians is actually their money. The choice is clear. Only the Liberal-National government believes in reducing taxes and taking the pressure off small business.