Kelly O'Dwyer (Higgins, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I am delighted to stand in this place and speak on the Tax Laws Amendment (Small Business Measures No.3) Bill. The government has introduced legislation for three more measures to support small business as part of the 2015 budget's $5.5 billion Jobs and Small Business package. In essence, this is a bill that cares about small business. But why do we care about small business? First, because every business starts as a small business; second, because the coalition understands small businesses are the engine room of the Australian economy; third, because small businesses provide employment and with it true economic security and opportunity for Australians; and, finally, because the coalition understands that you have to generate wealth for individual and community prosperity and in order to get the revenue that the government needs to provide services and infrastructure you need to be able to have that wealth generated. It is, after all, business and not government that ultimately generates this wealth.

The coalition understands that by growing the economy we grow wealth, which means the government is better able to provide for Australians now and into the future whilst keeping taxes as low as possible. The coalition understands that the government's role is to create the right settings to unshackle business from onerous and/or ineffective regulation and encourage growth. Ninety-six per cent of all Australian businesses are small businesses and they represent the largest employer by sector in our nation's economy. My electorate of Higgins has over 20,800 small businesses, each contributing significantly to our local economy—from the cafes to the restaurants to the retail outlets such as florists, there is an abundance of small business activity in my electorate. I also have shopping precincts in my electorate that are destination points for people who want to do fashion shopping, whether it is High Street Armadale or whether it is Chapel Street in South Yarra. In my electorate I also have the largest shopping centre in the Southern Hemisphere, Chadstone Shopping Centre. All of these strips and centres have small businesses in them that help to grow our economy and employ people. Importantly, many young people begin their working life in small business. Pleasingly, in 2013-14 we saw strong growth in the small business area, with over 280,000 new businesses established providing opportunity for today's youth to get the start they need.

While many issues in this place are of genuine concern to Australia's young people, the ability to find employment and build a career remains rightly fundamental to young Australians and, as we know, that is essential in creating a secure and ultimately happy life. In addition, women represent one in three small business owners and notably it is women who constitute the fastest growing cohort of small business owners in Australia, with an increase of four per cent in the 12 months to June 2015 compared with an increase of 1½ per cent in male business owners over the same period. I am equally pleased that these measures introduced today will help over 400,000 women small business owners, as well as entrepreneurs and job seekers.

This bill will ensure that all small businesses receive a tax cut—no matter how they are structured. This measure will provide an automatic boost to the 1.7 million unincorporated businesses—sole operators and partnerships—to grow. By providing individuals who draw their income from an unincorporated business with a five per cent discount on the tax payable on their taxable income, we are able to create a lower taxing environment. This tax offset will be capped at $1,000 per taxpayer per year. This will give a range of small business owners, from tradies who operate as a sole trader to the mum-and-dad-run milk bar—similar to the one my grandparents started up all those years ago—through to family businesses operating through a family trust.

In circumstances where we are able to lower taxes, we should. Lower taxing environments encourage innovation and entrepreneurship. The government's measures will encourage and enable small businesses to grow and reinvest in ideas, equipment and people. This tax cut will increase cash flow for small businesses and lead to an increase in economic productivity. The coalition does not believe that you can tax your way to prosperity in order to unleash the potential of individuals and businesses. We need to do everything we can to make sure that we minimise the tax burden on all Australians. All new small businesses will be able to immediately deduct some start-up expenses, such as legal advice and registration fees, that previously had to be depreciated over five years. This will improve cash flow and reduce red tape. This will mean that businesses will not have the burden of having to track these expenses over the five-year period and will be able to spend less time dealing with regulations and more time in other areas such as improving or expanding their businesses.

This bill will also ensure that small business see a reduction in the current regulatory impositions they are faced with when trying to comply with the current fringe benefits tax rules. The government recognises the importance of being able to stay connected in the digital economy and so employers will be able to access an FBT exemption for portable electronic devices they provide to their employees. These amendments build on the successful passage of the first two bills through the Senate, confirming all small businesses' access to an immediate tax deduction for assets costing less than $20,000 and the 1½ per cent tax cut for small businesses with a turnover of less than $2 million. This is the biggest small business package in Australia's history. At the heart of the package are measures to provide tax relief and reduce the red tape and regulatory burden for small businesses. The last of this collection of bills, to enable small businesses to restructure without facing an immediate capital gains tax liability, is scheduled to be introduced in the spring sittings.

The government is committed to ensuring that Australia is the very best place to start and maintain a small business. Our Jobs and Small Business package is creating the right conditions for Australian businesses to thrive and grow. We are focused on creating the right environment for the over two million small businesses across Australia and those who they employ. Since the coalition came to office, around a quarter of a million new jobs have been created. Company registrations reached a record high in 2014. It is clear that we are already seeing results. I am pleased that these small business measures will build on these strong foundations for the benefit of the Australian people now and into the future. I commend this bill to the House.

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