Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

It is always a pleasure to follow my good friend the member for Rankin. The ability of those opposite to rewrite history never ceases to amaze me. The most important piece of support we have provided to not only the small business sector but the business sector more generally in Australia since we came to government, which those opposite have failed to acknowledge, is the repeal of the carbon tax. An enormous weight was lifted from the business sector in this country in July last year when that insidious tax was repealed. Those opposite pontificate about the costs for small business yet they came out of their national conference with a new policy to reintroduce a carbon tax via an ETS or another mechanism that is going to be a hammer blow not only to small business in this country but also to large business. We are going to see jobs and opportunities lost across the Australian economy as a direct result of the policies that those opposite will introduce if they ever return to this side of the chamber.

It is with great pleasure that I stand here today to support the Tax Laws Amendment (Small Business Measures No. 3) Bill. This bill seeks to amend various taxation laws to provide tax relief and reduce red tape for small business. That is something that we as a government over the past nearly two years have been focused on—reducing the red tape and regulation burden in our economy. Since last year's budget and following the success of this year's budget more than $50 billion in budget repair measures has now been legislated. It is interesting to note that those opposite fail to mention the dire circumstances in which they left the Australian budget when they lost government in 2013. We have focused on delivering real tax relief and real red tape reductions for the small business sector but also for the Australian economy more generally.

According to the NAB, business confidence and conditions continue to climb, sitting at plus 10 points, well into positive territory and near a two-year high. I note with interest that the member for Oxley in his contribution talked about the number of people unemployed. I am sure all in this House would like to see far fewer people unemployed—800,000 people is far too high a figure. Those opposite have made the comment that that figure is higher than it has been in 20 years. I remind the member for Oxley and even the member for Rankin, because I think he touched on that, that our workforce in those 20 years has grown substantially and, whilst the unemployment rate of 6.3 per cent is not acceptable and we want it to be lower, in 1995, which is their comparison point—which, by the way, was during a Labor government—the equivalent unemployment rate was 8.4 per cent, or two per cent higher in real terms than it is today. Again, that was under the Labor government of those opposite.

The recent break from parliament gave me the opportunity to visit many businesses in my region, including many small businesses who are feeling the positive effects of the budget's Jobs and Small Business package. It is tremendous to see how local small businesses in Forde are feeling growing confidence in a government that is providing them with the right tools they need to grow their business—new businesses like Delirium Fashions, who opened recently in Beenleigh. They have provided a wonderful fillip to the main street of Beenleigh as they take the opportunity to establish a new business at a time when also as a government we are investing some $3 million into the Beenleigh town centre redevelopment. In my electorate of Forde we have approximately 11,000 small businesses. These businesses are run by hardworking, dedicated and innovative people who put their life and their assets on the line every single day that they go to work. The small business measures passed from the 2015 budget will make a huge difference to the many business people in our local community and also across the country.

This bill is the third of four bills our government has introduced to deliver one of the largest jobs and small business packages in the nation's history, worth some $5.5 billion. The company tax cut of 1.5 per cent and accelerated depreciation for small business bills have already passed the House and the Senate.

This bill will provide a tax discount for unincorporated small businesses to improve cash flow, allow immediate deductibility of professional expenses and expand the fringe benefits tax exemption for work-related portable electronic devices, further reducing red tape.

Small businesses can face proportionately higher regulatory costs than larger businesses because of their inability to take advantage of the economies of scale and in understanding and complying with regulation. Schedule 1 of this bill will provide a five per cent tax discount for approximately 70 per cent of Australian small businesses which are not incorporated, capped at $1,000 per year. Similarly to the company tax cut, this bill extends that benefit in a proportionate way to a greater number of unincorporated small businesses. Australian small businesses are made up of a wide range of different enterprise structures, and this Jobs and Small Business package budget measure is structured to ensure we assist as many small businesses as possible.

Currently, unincorporated business income is taxed at its owner's marginal tax rate. This feature of Australia's tax system means that the company tax cut that we introduced previously would not benefit unincorporated businesses—and, because of this, our sole traders, many of them tradies, mum-and-dad business partnerships and family businesses operating through a trust, would miss out if we only focused on a small business company tax cut. The measures in this bill will ensure all small businesses are entitled to a tax cut, regardless of how they are structured. This tax cut of up to $1,000 for each business owner will help improve cash flow that can be reinvested in the business, hopefully helping the business grow and achieve its potential.

Schedule 2 of this bill provides immediate deductibility of professional expenses for small business. Currently, there are some expenses related to starting a business that have to be depreciated over five years at 20 per cent of the original cost. Under the changes in this bill, new businesses will be able to immediately deduct rather than depreciate over five years. This will not only improve business cash flow; it will improve record-keeping requirements that small businesses face and also hopefully reduce the cost that they incur in dealing with their professional advisers each year. Small business owners will be able to claim the deduction for the entire amount of those professional fees and get on with growing their business and Australia's economy. This measure to immediately deduct professional expenses when starting a business will be available from the start of the 2015-16 income year.

Schedule 3 of this bill reduces red tape within the fringe benefit tax system by expanding the FBT exemption for work-related portable electronic devices. By simplifying FBT arrangements for small business, we can reduce the existing complexity in complying with current rules and improve access for employers to work-related benefit exemptions. Small businesses with an aggregated turnover of less than $2 million will be able to access an FBT exemption for all portable electronic devices that are provided for work purposes. This exemption will be available even if multiple devices have substantially similar functions and have been provided by an employer to an employee for work purposes.

Under the FBT system, fringe benefits are not taxed at an employee's marginal tax rate but are, instead, taxed at the top marginal tax rate. Currently there is an FBT exemption for five categories of work-related items that are primarily for the employee's employment. These categories apply to portable electronic devices, items of computer software, items of protective clothing, briefcases and tools of trade. With the portable electronic device category, an FBT exemption can currently be provided for more than one device provided the devices do not have similar functions.

We recognise, with the development of new products and the increasing overlap in functionality, that it is becoming more difficult for employers to determine which devices can access the existing FBT exemption. These legislative provisions that allow for the FBT exemption for portable electronic devices and computer software have not kept up to date with evolving technology. This bill seeks to resolve that problem. Allowing the existing FBT exemptions to apply to items that have substantially similar functions, as proposed, will simplify the current rules and provide employers with more flexibility in the number and nature of items provided to employees. Simplifying this exemption is expected to lead to a reduction in compliance and red tape costs for employers. More than 30,000 businesses are estimated to initially benefit from this measure.

Overall, this bill, coupled with the other Jobs and Small Business package measures announced by the government in the 2015-16 budget, encourages small businesses to provide their staff with the necessary tools they need to undertake their day-to-day activities but also to help grow the business in which they work. Our government is seeking to create a more competitive system that supports, not hinders, small business growth. The hardworking men and women of Australian small business deserve a government that will provide them with the best opportunities possible to invest, grow and succeed in their small business ventures—because we want to see our small businesses grow to become medium and, ultimately, large businesses.

The coalition government has introduced some terrific measures to ensure Australia is best placed to start and grow small business. The measures in this bill, along with all the measures in the Jobs and Small Business Package, are not only about helping small business but also about creating jobs and building a strong economy. I commend this bill to the House.

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