Rick Wilson (O'Connor, Liberal Party) Share this | Hansard source

The 2015 budget, as contained in the Appropriation Bill (No. 1) 2015-2016 and related bills, is a big win for families, small businesses and farmers. My electorate of O'Connor has an abundance of families, small businesses and farmers, so that means the budget is a huge win for my electorate. While the budget has been generally well received across the board, there are some budget measures that specifically benefit the different regions of my electorate.

Before I discuss some of the budget measures I am really proud of, we cannot forget the reason Australia is in this situation. This government inherited a deficit of $48 billion. The deficit for the 2015 budget is estimated to be $35 billion and is forecast to reduce each and every year to below $7 billion over the next four years. Gross debt in a decade will be more than $110 billion lower than we inherited from the previous government. Net debt is projected to peak at 18 per cent of GDP or $313.4 billion in 2016-17 before falling considerably to 7.1 per cent of GDP by 2025-26. Our action on the budget has allowed us each year to lower taxes. In 2014 we removed the carbon and mining taxes. In 2015 we are reducing taxes for 90 per cent of all Australian small businesses. Taken together, all of our decisions since coming to government have reduced the overall tax burden by $5.4 billion.

The government's 2015 budget is a historic, unprecedented game-changing budget for small business. The Growing Jobs and Small Business package is the biggest economic recognition of the sector in Australia's history. Small business has been and continues to be the engine room of the economy. It is an enduring focus and priority for this government. We are committed to working to ensure that Australia is the best place to start and grow a small business.

Our budget package was developed from extensive consultation with small business owners and employees. The corporate tax rate will be reduced from 30 per cent to 28.5 per cent for small businesses with an annual turnover of under $2 million. Small business will pay less tax for income in years that commence on or after 1 July 2015. The accelerated depreciation arrangement for small business and primary producers is the centrepiece of the budget's small business package. The change will amend the small business simplified depreciation rules in the tax law to increase the threshold for immediate deductibility from $1,000 to $20,000. This is a significant increase in the threshold and a massive gain to the cash flow for small businesses.

Our budget measures reflect our understanding of the complex nature of small businesses across our country. We know small businesses are at the very heart of rural and regional Australia and, with this in mind, changes have been implemented to amend tax laws to provide a simplified acceleration depreciation rule for all farmers. Farmers will be able to immediately deduct all capital expenditure on fencing and water facilities, while fodder storage assets will be deductible over three years. In an unprecedented move, we are simplifying the tax system for farmers and encouraging investment that will improve our farming communities' resilience to drought and other extreme weather events.

The accelerated depreciation arrangements for farmers and small business can be claimed for expenditure from budget night, making it more attractive for them to invest in new assets and grow. The changes will assist farmers with cash flow, improve resilience and reduce red tape by removing the need for farmers to track expenditure over time. A farmer can immediately deduct the cost of a water facility or fencing—for example, an $80,000 irrigation system previously was deducted over three years but now can be deducted immediately, giving a $53,000 deduction in the first year and so reducing the farmer's tax burden. A $25,000 new fence was previously deducted over 30 years but now can be deducted immediately, giving a $24,167 deduction in year one.

In my electorate, child care is a huge issue. The farmers that we have just been talking about and the shift workers, like many people in Kalgoorlie-Boulder, find it hard to get carers for their children. The Jobs for Families package will provide greater choice for these people by delivering more affordable access to quality child care and early childhood learning. Eligibility for the childcare subsidy will be determined by a stronger activity test. The good news is a broad range of activities will meet the activity test requirements. These include being self-employed, doing unpaid work in a family business such as a farm, looking for work or setting up a business and studying. The activity test includes a requirement to undertake a minimum of eight hours of activity per fortnight to access any subsidy, unless exempt. Eight hours of activity per fortnight results in up to 36 hours of childcare subsidy.

Another important issue is the zone tax offset. In the goldfields, specifically in Kalgoorlie-Boulder, I know that many are happy with the change to the zone tax offset. From 1 July 2015, the zone tax offset is only available to individuals genuinely living in remote and regional Australia. It is very important to my constituents to be recognised as genuinely living in a remote area for the purposes of the zone tax offset. The zone tax offset was introduced in 1954 in recognition of the disadvantages of residing in remote parts of Australia, in particular the isolation and high cost of living associated with living regionally. For too long Perth residents involved in fly-in fly-out and drive-in drive-out roles have had access to this allowance. In the 2012-13 financial year, more than half a million Australian residents with taxable income claimed zone tax offsets totalling $284.3 million. It is estimated that around 20 per cent of all those claimants do not live full-time in the zones.

While this allowance is only small for most of my constituents, it does recognise the high cost of living in regional WA. As my constituents know, FIFO workers do not face the same challenges of remote living that the zone tax offset was designed to address, as their genuine place of residence is elsewhere. FIFO workers do not have any additional costs; they eat at the work mess; they are not buying bread and milk at the local shop or paying for the increased freight costs; in fact they do not spend one cent in the region they work in.

The system was rewarding people in circumstances where they are not spending any money in the area, and this has now changed. On top of being of benefit to my constituents, this budget measure will gain revenue of approximately $110 million per year starting from the 2016-17 financial year. I would like to see some further reform on the zone tax offset, including the addition of a greater range of farm areas and, most importantly, for the offsets to be increased. People living in remote areas do not have access to the same level of publicly funded services as metropolitan areas, and they pay substantially more for the services that are available. We should increase the zone tax offsets to compensate for that.

The current zone tax offset is split into three categories: zone A, an offset value of $338; zone B, an offset value of $57; and special zone areas, an offset value of $1,173. I find it hard to believe that someone living in Esperance, some 700 kilometres from Perth, is financially only $57 worse off compared to someone living in Perth. I would like to see the zone tax offset for zone B reflect the real cost of living in such a remote regional town.

Youth allowance is an issue I have fought very hard for, and there were two very important issues I took to the 2013 election. One was rural health and the other one was youth allowance. I want to take a moment to discuss two recent announcements that substantially affect regional Australia and my electorate. Recently the government announced positive changes to youth allowance. From 1 July 2016, the family asset test and the family means test will be removed from the youth allowance parental income test. These changes will mean that farming families will not have farm assets counted toward the test for their children accessing youth allowance. Another change is that all family tax benefit children in the family pool will be included in the income-testing arrangements. These changes are great for rural and regional families, and specifically for students aiming for dependent youth allowance. As more students achieve dependent youth allowance status they will not have to take a gap year, which will lower university deferral rates.

However, the job is not done. I would like to see a reduction in the youth allowance waiting period from 18 months to less than 14 months, at least. This would allow each student in my electorate to start university after a one-year gap rather than a two-year gap. The current 18-month waiting period means that many students in my electorate are disadvantaged. Instead of taking a one-year gap to qualify for an allowance, they have to wait two years or start university without accessing the independent youth allowance. If a student finishes school in late November, that student is looking at May, at least, before qualifying for youth allowance. Without a job in the city, this makes starting university in late February almost impossible. I often receive calls from parents of children who are struggling to make ends meet while studying in the city and waiting for the allowance. In one instance, a student had started university after one year but was down to his last $150 while he waited for Centrelink approval for youth allowance.

I commend the students in my electorate who do the hard work to attend university despite being disadvantaged. A city student, of course, has the option of living at home with their parents while studying at university, and may also be able to continue in the same part-time job they had during the holidays while they were at school. A country student has to move to the city and find a new job—ideally one that pays reasonably—to support themselves because they are not living at home. A country student has to move out of home for the first time and move to the city, sometimes hundreds of kilometres from their home, and then pay to make ends meet in that city. The costs of covering rent, food and travel to and from home is a lot to ask from students who cannot work in their home town. Reducing the youth allowance waiting period will ensure regional and rural students in my electorate are only one year behind students who come from the city. I will continue to fight for a reduction in the youth allowance waiting period for as long as it takes, to ensure country students can further their education without being disadvantaged.

Rural health is another critical issue in my electorate. Eleven towns will now find it easier to attract doctors under the overhauled General Practice Rural Incentives Program. Under the changes, 450 Australian country towns will receive increased subsidies to attract and retain doctors. The overhauled, much fairer GP rural incentives program means that smaller rural communities will be able to more easily attract and retain GPs. The system will be fairer for small towns, redirecting money to attract more doctors to towns that have genuine difficulty attracting and retaining them. It made no sense that, under the previous system, $50 million a year was being used to pay incentives for doctors to live in 14 large regional cities—including Townsville, which has a population of 175,000, and Cairns, which has a population of 145,000. This money will now be spent attracting doctors to towns like my home town of Katanning, which has a population of 5,000, and our neighbouring town, Kojonup, which has a population of 2,000. It makes more sense to use the GP fund to attract doctors to where the greatest shortages are—small and remote communities, not big regional cities. The highest incentive paid to work in remote regional Australia will jump from $47,000 to $60,000 per year. The maximum incentive to work in a town of less than 5,000 in regional Australia will increase from $18,000 to $23,000. Other changes include that doctors will be able to take leave from a rural practice for up to five years with no loss of their incentive status on their return. Four existing programs have been streamlined into a single group retention payment, and doctors will need to stay in a regional or rural longer than two years, up from the current six months, before they receive the incentive.

As a final note on regional health, I am very pleased to announce that the Royal Flying Doctors received an extra $20 million over two years, increasing their funding from $58 million per annum to $68 million per annum. It is a vital service in my electorate of O'Connor.

To conclude, I want to touch on the government's commitment to infrastructure and how important infrastructure investment is. While I am disappointed to have only one successful project under round 1 of the National Stronger Regions Fund, I was thrilled the city of Albany was successful in their application for the relocation of the Albany Visitor Centre. This project will deliver an iconic building that will house a new tourist information hub and showcase regional produce, involving co-location with the Albany Visitor Centre and the Albany Public Library. This news is on top of the Roads to Recovery program, the Black Spot Program, the Heavy Vehicle Safety and Productivity Program and the Bridges Renewal Program.

Roads to Recovery has $350 million allocated, and this year an extra $350 million is being funded. More than 2,300 projects have already been listed for funding under the current 2014-19 program. The Black Spot Program has $60 million allocated annually to target dangerous areas where crashes are occurring. We have almost tripled black spot funding for the next two years, with an extra $100 million being allocated in 2015-16 and 2016-17 to accelerate road safety improvements. A total of 382 projects across five states and territories have already been announced for 2015, with further announcements being made in the coming weeks. Then we have the announcement of the Stronger Communities Program: $45 million over two years to fund small capital projects in local communities. Between $1,000 and $20,000 will be made available to reputable not-for-profit organisations for local projects. When the guidelines are released, I will be promoting this program in my electorate and encouraging eligible organisations to apply.

The 2015 budget is a great budget for Australia and particularly for O'Connor. I congratulate the Treasurer, the Minister for Small Business, the Minister for Finance and the Prime Minister on their hard work. For me, it is a good combination of repairing Australia's financial situation and giving people a chance to have a go.

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