Steve Irons (Swan, Liberal Party) Share this | Hansard source

I too rise to speak on the Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015, which will make a number of overdue changes to the tax arrangements of an ESS, which will benefit both employers and employees in the short and long term.

Whether you are a member of parliament, a small business owner—I know there are many on this side of the chamber and very few on the other side—or the CEO of a large corporation, each of these people would know that attracting and retaining good employees can be difficult in the first instance but can also be the difference between success and failure. A business's employees are those who are on the front line dealing with consumers or making the products that they intend to sell, so if they are not motivated to work hard and represent your business in the same way that you as an owner would then this can be the straw that breaks the camel's back. The business could be put in jeopardy because of the lack of performance by employees. As someone who employed 16 staff at one stage, I am fully aware of the difficulties that go with employing people and keeping them motivated. The intent of an ESS is to help remove this distinct separation between owners and employees by incentivising the employees to work hard and generate growth in the business—and, of course, profit. That is why we all go into business—for the profit. It is not a charity; it is there to make a profit. I know that 'profit' is a dirty word for those on the other side of the House, especially if it is above six per cent, but that is why we go into business.

The incentive here is not necessarily a large salary each week or fortnight. In fact, the incentives of an ESS can often be in lieu of a large salary, particularly when it comes to start-up businesses, as they simply cannot afford to offer the form of remuneration for an employee's hard work that an established business or a large corporation can offer. What an ESS instead allows a business to do is to provide incentives in the form of options or shares so that employees have a vested interest in the business and its future success. As I said, this removes that owner-employee separation and instead aligns their interests so that they are now working toward the same thing— business growth and profit. No longer is this just for the benefit of the owner; it is also now for the benefit of the employee's own hip pocket as well.

As a small business owner for 30 years, I understand how competition impediments, and in particular those impediments that come in the form of a tax, can significantly hinder a business. I also know that there are some employees who are employed but, in the long run, do not suit the business's requirements and you have to let them go. But there are also those employees you do want to retain—not just for a year or two, which has become quite standard in today's employment arena, compared to 20 or 40 years ago, when you would stay in the same job for the majority of your working life. Instead, you want to retain these people for the long term. You want to keep them for 10 or 20 years and make them what we would now deem veterans in your business and part of a succession plan.

But, to give businesses this opportunity, change first needs to be implemented on a legislative level. And to achieve that, each member in this place and in the other place needs to commend the bill which is before the House. By doing so, you will be supporting business owners and you will be supporting employees across all sectors, because no industry will be exempt from the ESS changes that this bill is seeking to implement. All businesses can benefit, and all businesses will benefit if they make the decision to establish a scheme.

Currently, so many Australian businesses have stopped or shied away from establishing a scheme, for two key reasons. Firstly, as a result of amendments implemented in 2009 by those opposite, the scheme put Australian firms at a disadvantage compared to those in other countries. I have been listening to the speeches made by those opposite on the appropriation bills. I have heard some amazing speeches—you would never have thought that they had been in government for six years, because they had nothing to do with everything that is happening. It was not their fault; they were not anywhere near the balance sheet! I heard the member for Lingiari say that the 1.5 per cent tax deduction for small business was their idea. He blamed us for them not getting it through. The fact was that they canned it. They had the numbers in this place to get it through, but they canned it and then they blamed it on us. It was because of their failed mining tax, which produced nothing but trouble for Australian businesses. That is just one of the many examples we could put forward from those opposite. This is because they introduced measures which forced employees to pay tax on the options they received from an ESS—

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