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

I seek leave to move a motion relating to the consideration of a bill, as circulated.

Leave granted.

That doesn't happen often. I move:

That:

(a) the Senate notes that:

(i) the 2025-26 Budget does not contain any substantial support for small business, and

(ii) the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024 presents an opportunity to legislate a $30,000 instant asset write off to give small businesses the certainty they deserve;

(b) the order of the Senate agreed to earlier today relating to the hours of meeting and routine of business be further varied, to insert at the end of the list of bills in paragraph (aa)(ii), the Treasury Laws Amendment (Tax

Incentives and Integrity) Bill 2024; and

(c) a message be sent to the House of Representatives requesting that the House immediately consider the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024.

Unfortunately, we've seen this government repeatedly ignore small business when it comes to consultation on legislation, when it comes to digitisation to unlock productivity, when it comes to many of Bruce Billson's sensible recommendations for small business in this country. Here we are on the last day of the parliament, and the government is prioritising all sorts of bills. One they aren't prioritising is the instant asset write-off for this year, which hasn't even passed the House yet. Yet earlier, when he was asked about it, we saw the Treasurer blame the Senate. Blaming the Senate for a bill that hasn't passed the House yet seems like a very strange excuse from the government. I urge the major parties: rather than trying to score political points, let's pass these measures for Australia's 2½ million small businesses. They need the certainty, and this parliament has not adequately looked after small businesses in this parliament.

We've heard, rightly, lots about cost-of-living pressures, but the thing we don't talk about is that small-business owners face a double whammy when it comes to cost of living. In their business they are dealing with rising costs and, in many instances, trying to work out ways to not pass them on to customers, and then at home they're facing the same cost-of-living pressures that all Australians are. This instant asset write-off is something that needs to be done today. It needs to be done today to allow small business to have certainty, and I urge the coalition to support it. We may see some squirming, some pushing for a higher amount and to make it permanent. I agree with both of those things. Last time this bill went through, I actually moved amendments to it, and we saw the coalition abstain. I'm not too sure why. But I urge the parliament to pass it. It's in the budget. It's something that the government has committed to. Let's get this $20,000 for this year done, and the next parliament will need to do the work of making it permanent, providing certainty and raising it to at least $30,000.

I'll be moving an amendment to the TLAB—the more cost-of-living relief bill—to make sure that the instant asset write-off is legislated for this financial year. I urge all senators to think about the small businesses in their states and territories and support the amendment.

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

Thank you very much, Senator Pocock, for moving this motion. The coalition will be supporting you in your effort to move this motion. The instant asset write-off is a fundamentally important feature of our taxation system, to drive productivity. Productivity has fallen to record lows under this government. Productivity is one of the great drivers of economic growth, which is so desperately needed in this environment. We've seen economic growth stagnate to around 0.8 per cent per annum. That is anaemic growth. Without productivity driving economic growth our prosperity is at risk.

The instant asset write-off is a fundamental tenet of our taxation system, particularly for small businesses. Small businesses rely on the instant asset write-off so that they can invest in the productive capacity of their own businesses and receive a full tax deduction for doing so. You will recall that the instant asset write-off has been used previously by governments in order to inject that productivity into our economy, back into economic growth. During COVID it went up to have a cap of around $100,000, from memory. That was a really important part of the coalition government's COVID response, to make sure that we kept businesses in business and kept people employed. At a time when the economy was at great risk, this was a fundamentally important measure.

The instant asset write-off was continued under the Labor government, but we see that was removed from last night's budget entirely. The coalition have been pushing to not only keep this measure but raise it. We want to see the threshold raised from $20,000 to $30,000 to allow those small businesses who want to grow, to invest and to employ in their own businesses a tax deduction for investing in productive assets. I don't think that's too much to ask. Small businesses have been crying out for it, and last night they were devastated to see that it had been removed from the budget entirely. The coalition would like to see the write-off reinstated not just in this year's budget but in last year's. Let's face it: the problem is that because the House of Representatives hasn't passed this legislation—and it's in the House of Representatives, not in the Senate—thousands of small businesses have relied on the write-off being there at the end of this tax year. They've already made the investments, and they're expecting a tax deduction. But because this government has sat on it hands, because this government disrespects small businesses, those small-business owners are going to find themselves sorely disappointed unless Senator Pocock gets his way today and the House of Representatives stops sitting on its hands, passes this incredibly important measure and sends it here for the Senate to support.

Small businesses need this. Small businesses not only need the instant asset write-off this year; they need it next year as well—and it has gone from this budget. We want to see the instant asset write-off threshold lifted from $20,000 to $30,000. Most importantly, a coalition government will commit to making the instant asset write-off a permanent feature of the taxation system. Why is this important? Because small businesses aren't like large businesses. They don't have the capacity to just make investments at the drop of a hat. They need to plan for it. They need to budget for it. And, when they do, they deserve to be rewarded for it. They deserve to make a tax deduction for those investments.

Let's say you're a restaurant, a hospitality business. We know that one in 11 hospitality businesses failed last year, along with 29,000 other businesses that have failed under the Labor government. If you are a hospitality business and you want to invest in a new refrigeration system that's going to be more environmentally friendly and bring your electricity prices down, that would be fantastic. But you should be able to invest in that asset and then write it off immediately. Under a coalition government, that will always be the case.

Unfortunately, under a Labor government that disrespects small businesses and doesn't understand small businesses—and you know why they don't understand small businesses? Because they have never worked in one, because they have never owned one, because they have never run one. The Labor government disrespect small businesses, so they will never approve an instant asset write-off. They don't think this is necessary. They would rather give people an election bribe of 70c a day in 18 months time in order to win an election. That's not taxation policy. That's not taxation reform. That's not productivity enhancing. That's an election sweetener. That's a budget measure for the next five weeks. That's not for the next five years. That's not for the next 50 years. That's simply a bribe. It's a cruel hoax to ordinary Australians who deserve so much better. The Labor Party think they can buy your vote. How dare they! Australians are not that stupid—and the small business community certainly know that.

One of the hats I've been wearing in this term of parliament is that of the chair of the Senate Select Committee on the Cost of Living, and one of the most heartbreaking stories I heard was that of a small-business owner in Western Australia. Western Australia is a pretty prosperous state, don't get me wrong. This man was 67 years old and he was sitting in a forum that I was running. He spoke at the very end of the forum and said: 'Under this government, I have seen my business go backwards. I have been running a hairdressing salon for 45 years. Me and my wife, together, have been running this salon. At our peak, we employed eight people, but we're down to four. I saw my business manager the other day. My business manager said to me—and I'm 67 years old—that I have $2,000 a month for my wife and I to live on for the foreseeable future, and that's it—$2,000 a month. Otherwise my business will go under and we will die paupers.' He has $2,000 a month, and, as he told me this story in front of about 40 people, he burst into tears. It was possibly the most moving and confronting moment that I have had throughout this term of government, because that's the face of failed Labor tax policy. That's the face of Labor's cost-of-living crisis. That's the face of Labor's cost-of-doing-business crisis. This poor man was facing poverty after years of doing what was right—running a business, employing other people, investing in his business and growing his business. It's small-business owners like that man that are the ones that we are standing up for here.

On my side of the chamber, we stand up for small business. We know that the country can't run without small businesses. We know that communities falter without strong small businesses. We know unemployment goes up without small businesses. We need small businesses for economic growth and for our economic prosperity—prosperity for the nation for the next generation. This government does not understand small business, and that is why it has not legislated for an instant asset write-off for this financial year, let alone the next financial year. They have sat on their hands and allowed small businesses to make investment decisions thinking they were going to get a tax deduction for them, and now small businesses have found out that, because they're at the end of the runway, they're not. Well, that's just outrageous. That is a failure of a promise. That is a broken promise.

So we will support Senator Pocock's motion. The Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024, which is the bill that Senator Pocock would like to see pass the House of Representatives and come back to the Senate, is, for the most part, a bill that is in fact antibusiness. We tried to amend it because there were so many schedules to it that we did not agree with. They embedded the instant asset write-off in this bill, hoping that they could get through a whole series of antibusiness measures along with a pro-business measure. That's what this government does. It does it every single time. It tries to find a wedge so that it can get its antibusiness, antigrowth, antiproductivity, antiprosperity agenda through at the same time as those items that we want to see go through so that we can see growth in the economy and inject productivity into all that we do.

I have colleagues who will go through the individual schedules, which include things like luxury car taxes and denying deductions for ATO interest charges, which is a terrible impost on small businesses. It also extends the period to retain a BAS refund. But schedule 4 is the one that is most important, because this is Labor's attempt to chip away at the instant asset write-off with this limit of $20,000, which is completely inadequate and which the coalition has said it would like to see extended to $30,000. But that's just this financial year, and small business have been waiting for and relying on this. Next financial year, when this terrible Labor budget kicks in—when that $42 billion of deficit and the trillion dollars of Labor debt kick in—there will be no instant asset write-off, because Labor don't care about small business. Labor don't care about small business, because they don't understand small business.

So not only do we want to see this pass but we want to see this budget rejected. We want to see an instant asset write-off that goes up to $30,000 and is made a permanent feature of the taxation system. Why do we want to do that? Because small businesses, for three years now, have been crying out for help. They've watched their electricity bills go up by 32 per cent. They've watched their gas bills go up by 34 per cent. They've watched their rents go up. They've watched their wage bills go up. They've watched their superannuation bills go up. And they're caught in the pincer movement because they're also at the other end of the cost-of-living crisis. So many businesses have seen demand for their products and services drop away, as consumer demand has dried up after 12 interest rate rises under Labor. Those 12 interest rate rises, I might add, all occurred while these guys were wearing 'yes' T-shirts and wandering around the country telling people to change the Constitution.

That happened on their watch because they took their eye off the ball. Labor took their eye off the ball, and their misplaced priorities and poor policies have meant that Australians have suffered under Labor. If you want to know why your standard of living has gone backwards by eight per cent, if you want to know why you are poorer, if you want to know why you've spent an additional $50,000 on your mortgage over the last three years—$50,000 that you will never get back—look no further because they're sitting across the chamber. They were out there campaigning in 'yes' T-shirts while interest rates went up. While electricity prices went up, they said, 'Oh, no, the best thing would be a renewables-only approach.' They forgot to say $275. They haven't said that for three years now. They said 97 times before the last election that they were going to bring power prices down by $275. Have they said it once since the election? No. They're pretty big on subsidies. They're pretty big on giving you your own money back to compensate for their failed policies. It doesn't matter if it's in health. It doesn't matter if it's in energy. They're happy to give you your money back because their policies don't work out.

The instant asset write-off is a fundamental feature of our taxation system. It has worked for years to increase productivity, economic growth and prosperity—prosperity that all Australians expect and deserve from a government that understands fiscal responsibility and economic management. But, unfortunately, that's not what we've seen this week. It's certainly not what we've seen today. What we've seen this week is a budget that's willing to squander two windfall surpluses and instead return a $42 billion deficit and a budget that's willing to rack up debt to the tune of a trillion dollars that your kids and your grandkids are all going to pay for for generations to come.

But they've also said they're willing to buy your vote back. They're willing to buy your vote back for 70 cents a day, which you won't get for another 18 months. How about them apples? Isn't that extraordinary? They think that you are so stupid that you would fall for something as shallow and as brazen as an election bribe of 70 cents a day. Bring back the instant asset write-off. Bring it back to this parliament, bring it back to this chamber and let's pass it right now. But let's not just pass it at a $20,000 threshold. Let's raise it to $30,000. Let's do small business a favour finally because they've been crying out for help and they'll never find it from the Albanese government.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I indicate that the government will not be opposing this motion from Senator Pocock. I note the government's position remains that which was budgeted, which is a $20,000 instant asset write-off which has been before the parliament for some time.

Question agreed to.