Tuesday, 22 November 2011
Minerals Resource Rent Tax Bill 2011, Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Bill 2011, Minerals Resource Rent Tax (Imposition — General) Bill 2011, Minerals Resource Rent Tax (Imposition — Customs) Bill 2011, Minerals Resource Rent Tax (Imposition — Excise) Bill 2011, Petroleum Resource Rent Tax Assessment Amendment Bill 2011, Petroleum Resource Rent Tax (Imposition — General) Bill 2011, Petroleum Resource Rent Tax (Imposition — Customs) Bill 2011, Petroleum Resource Rent Tax (Imposition — Excise) Bill 2011, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Superannuation Guarantee (Administration) Amendment Bill 2011; Second Reading
Many speakers before me have pointed out the damaging impact of the Gillard Labor government's minerals resource rent tax and how it treats sections of the community differently, how it divides the nation and how it will drive small business to the wall. Tonight I want to address one part of the mining tax—a very significant part—and its impact, particularly on small business.
This tax has Labor failure written all over it. It was designed to rake in funds to replace the billions of wasted dollars on failed schemes—the BER program, pink batts, computers in schools—and budget blowouts on hopelessly managed programs like the NBN implementation. The Gillard Labor government's mining tax has hit a new high. Labor has managed to create a new tax—Labor's answer to everything—and it has managed to eliminate another of the Howard government's successful initiatives.
Small business forms the backbone of the Australian economy and the Gillard Labor government is trying its hardest to break the back of the hundreds and thousands of men and women who work in their own business—the self-employed, semi-retirees, home-based businesses, start-ups, small retailers, self-employed contractors and micro-business operators. These ordinary, everyday hardworking Australians are the targets for the Gillard Labor government's attack on small business through the mining tax. As part of the mining tax legislation the Gillard Labor government will abolish the entrepreneur's tax offset. Not many people would know about the tax offset, but those in small business understand its benefits. This tax offset was introduced by the Howard government in 2005 to encourage and support our small businesses and family enterprises. In 2005, it was originally thought that over 300,000 small businesses would benefit from the initiative. In 2008-09, the Australian Taxation Office reported that more than 425,000 microbusinesses had claimed the offset. It provides a 25 per cent tax offset on annual income tax liability on turnover up to $50,000, phasing out to cease at a turnover of $75,000. Abolishing this incentive will mean that around 145,000 small businesses with an income between $30,000 and $65,000 will face at least a $10 a week, or $500 a year, tax slug, with those with taxable incomes around $50,000 facing a $16 per week, or $830 per year, tax hike.
For some businesses—whose incomes are modest and for whom the challenges of running them seem to be getting tougher and tougher—that cost could be the final straw. Any member of this House who walks through their electorate and knocks on small-business doors will understand that it is extremely tough right now. In effect, the loss of the offset will increase costs and act like another tax on small business. Yet the Gillard Labor government is out there saying it is going to be good for small business. It will save the government $180 million in 2013-14 and $185 million in 2014-15—a total of $365 million over the forward estimates.
In the electorate of Macquarie, there are an estimated 4,500 small-business operators, contributing to our diverse national economy. These are businesses that are creating local jobs and driving our regional and local economy. Why should small business have to pay for Labor's total lack of control of spending and the subsequent attempt to save money? What will they tax next when they have spent the mining tax and the carbon tax? Small businesses are the losers again as Gillard and Swan hit productive sectors of the economy to make up ground lost through sheer waste and mismanagement.
The coalition acknowledges that small business is the backbone not just of this nation but of our local and regional economies. It is a local employer. It provides a means for people to be independent and to have a future. The coalition will fight changes to increase taxes for small business. Unlike Labor, we encourage small business and we will ensure that small business has a voice within the coalition, with a seat at the cabinet table.
Small business, by its very nature, is enterprising, hardworking and resilient. This latest hit by the Gillard Labor government will test that resilience. I urge small business, when the next election comes, to remember that Labor, by introducing this legislation into this House, have not considered their needs, the pressure on them, the burden they bear and the sacrifices they make. On behalf of the coalition, I say that this is poor legislation. It is bad legislation for small business. Everyday Australians who work hard to make a future not just for themselves but for the people they employ and for their local communities deserve better. There is a better way and the coalition can provide it. The coalition cannot support this legislation without changes that will make a difference for small business.
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