Chris Crewther (Dunkley, Liberal Party) Share this | Hansard source

As an electorate of over 16,000 small businesses, Dunkley is centrestage to this legislation. We have the highest economic growth of any Victorian federal electorate. One could almost say that Dunkley is a natural home for business and innovation. I am a proud member of the Frankston Business Network and I proudly display my membership in my office. The network is a non-political, voluntary, not-for-profit organisation, representing all businesses operating within the greater Frankston region.

Frankston City Council and Mornington Peninsular Shire council have an abundance of resources for local businesses and start-ups including grants, support and business development programs. You would be hard pressed to find a better place to begin a small business than Dunkley. Obviously, of course, the Minister for Social Services' electorate of Pearce would not be far behind. That is why this legislation, the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 has my full support. Starting with businesses with an aggregated turnover of less than $10 million, the Turnbull coalition government is supporting industry in Dunkley and across Australia by reducing the corporate tax rate to 27.5 per cent and then down to 25 per cent within 10 years. By providing this initially to small businesses then progressively lowering the tax rate for all businesses, we will boost Australian jobs and Australian wages and we will boost our businesses' competitiveness both in the Australian market and internationally. Small business employs approximately a quarter of Australia's working population yet only one in 10 small business ventures succeed. That is why we must help them first.

This legislation is an example of the long-term visionary planning that Australia needs. The 10-year plan will invite investment and demonstrate continued confidence in Australian industry. Paying less tax frees up more money to pay employees and to give them more hours of work. These tax reforms will provide a boost to 1.8 million people seeking additional work. On the Mornington Peninsular we had a rolling average unemployment rate, as of September last year, of 5.1 per cent and a youth unemployment rate of 10.1 per cent. Many would gladly work if businesses could afford to hire them. This does not of course include underemployment, which is even higher.

Australia is not unfamiliar with fiscal competitiveness. Lower tariffs result in lower costs and greater production. Currently only five of the 35 OECD nations have a corporate tax rate higher than ours. Compare this to 15 years ago when Australia had the ninth lowest corporate tax rate among advanced economies. The United States' administration now has plans to reduce their corporate tax rate to 15 per cent. We have an uncompetitive business tax rate and our businesses are being stifled. The Turnbull coalition government will fix this, and will bring commerce and small business policy back to the heart of governing for Australia.

We are in a period of transition. With the end of the mining boom, we absolutely must support our other industries and give our local businesses a hand up. Excessive taxation cripples business, and we on this side of the House are determined to lessen the burden. By reducing the corporate tax rate for businesses with a turnover of less than $10 million on 1 July this year, we will be delivering a lower tax rate for around 870,000 companies which employ over 3.4 million workers. That means more income, more jobs and more employment for the community in Dunkley and across Australia. We will in turn bring greater investment into Australia and make sure that Australia continues to be an attractive place to do business. While prioritising small business, we will ensure that all businesses receive the benefits of a lower corporate tax rate over time. When there is less tax to pay, the profit margins are greater. When there is more money and more room to move, there is the opportunity for expansion, acquiring more staff, higher wages and a higher standard of living. You would have to be a fool not to jump at the chance to improve the security of our industries and have an expected permanent increase in the size of our economy of just over one per cent in the long term.

Dunkley, my electorate, has above the average number of small businesses so my focus is naturally primarily on the small business aspect of this legislation. During the 2013-14 financial year, small business added approximately $340 billion to the Australian economy. According to 2015 figures, approximately 97.7 per cent of businesses in Dunkley employ fewer than 20 people and approximately 99.5 per cent of businesses in Dunkley had a turnover of less than $10 million. We even have start-up hubs like the Frankston Foundry, which I visited last week, where people can set up and host their businesses from under the foundry's roof.

Small business is the keystone and the driver of our economy, particularly in my electorate, which is the federal electorate with the highest economic growth in Victoria, as I have noted. We as a government therefore have a duty to reduce the tax burden and free up investment as well as provide growth opportunities for our local communities. Frankston City Council figures note that the gross revenue generated in my local economy per job created is $254,914. If we can free up businesses to potentially create additional employment opportunities by reducing the amount of tax that business needs to feed back into government, just think of the potential growth of our local employment figures, our economy, our investment opportunities and our standard of living. This in turn will have a long-term positive impact on government revenue by increasing the overall pie.

From 1 July this year, all businesses with an annual turnover of less than $10 million will: be subject to simpler depreciation and trading stock rules, be able to use simpler clearer methods of paying pay-as-you-go tax instalments to the ATO, have flexibility in how GST is paid, have access to tax concessions previously only available to a small segment of businesses, and have reduced GST compliance costs through trials of simpler business activity statements. We are also introducing changes to benefit crowdfunding. This is how we, in the Turnbull coalition government, are the government for small business. By putting small business first, we will provide a boost to our economy and to national revenue. The prospect of the reverse or even just the rejection of these changes would be extremely harmful for small businesses right around the country.

Both the Leader of the Opposition and the shadow Treasurer have previously advocated for reductions in company tax, and I call on them to show that it was not just talk but to translate this into real action and support of this legislation. For example, the Leader of the Opposition said:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

The Leader of the Opposition should take a leaf out of his predecessor Paul Keating's book, who twice reduced the corporate tax rate for all businesses—that is, all businesses at once, not a graduated approach favouring small businesses first as we are doing.

This week we had The Big Small Business Expo in Dunkley in Frankston. It was hosted by yet another business hub, The Garden, and its founders, Emily and Jo. This is a hugely positive event with attendees offered marketing tips, exposure and networking opportunities, as well as opportunities for innovators and entrepreneurs to be connected to business people, along with mentors. I challenge any members opposing this legislation to come to Frankston and look at my constituents in the eye and tell them why they refuse to support tax relief for small business.

There are small-business owners like Cecile, who has run the Vogue House Cafe for over 15 years—first in Mount Eliza and now in Frankston. Cecile is the sole permanent staff member at the cafe. These tax cuts for businesses could potentially allow Cecile to hire other staff and have support in running the cafe. I challenge those members opposite to explain to Cecile why they refuse to give her a break. There is also George, owner and manager of Digital Reprographics, a local printing business that has been around for almost 20 years. George and his hardworking staff can professionally print and deliver several thousand flyers with half a day's warning, and they have plenty of capability for expansion. George invests in the local Frankston and the wider Dunkley community and is a small-business operator and a strong supporter of business networking and mentoring opportunities for newcomers to the business sector. In opposing this legislation, those opposite do not believe George deserves any help and will not allow him to expand or develop his business.

That is what opposition to this legislation comes down to. It is opposition to investment, opposition to more jobs, opposition to job security and opposition to wage growth. The opposition are exactly that: opposition to opportunities for hardworking individuals and to opportunities for their economic competitiveness. By demanding that small- and medium-sized businesses pay nearly $5 billion extra in tax, those members opposite have Australian business in a stranglehold that is economically irresponsible and pure opportunism.

It is a fact that higher corporate taxes hurt workers. The economic burden of corporate taxes are ultimately passed on to employees in the form of lower wages, fewer hours and less job security. The Tax Foundation in the United States found a consistent occurrence of reverse correlation between tax rates and wages—that is, when there is an increase in tax, ultimately a fall in wages follows. When a tax cut is implemented, there is a proportional increase in wages for ordinary employees. Add to this the increased investment in a growing company that is exploring and working its way into overseas markets, and a person such as Perry, of Nutech Paint in Seaford, finds themselves with additional opportunities for growth and investment, hiring additional staff and producing more, selling more and exporting more. And so the cycle continues.

We are the government for small business, including businesses like Nutech Paint. We have a positive record on fiscal policy, and this legislation goes some of the way towards the taxation reforms I indicated during my maiden speech, which are ideals of classical liberalism and central to Liberal Party ideology. I would be inclined to think the shadow Treasurer's amendment perhaps reflects his concerns about his own party's policy, characterised by wasteful spending, fiscal irresponsibility and a complete apathy to our industries and our international competitiveness.

It is no wonder that the opposition are trying to block this legislation. They need the extra tax income to fund their unfunded promises, yet they concurrently continue to try to block our savings measures. This is a confused opposition. Who knows what they want? I am sure that every one of us knows people, including me, who have attempted to start up small businesses. They may be successful or not. It is quite common for people to mortgage their own houses, their own homes, and to put everything on the line for their business, including the lifestyles of their families. We have all heard of or met small-business owners who take home no pay because they need to put that money into taxes or wages, just to keep afloat.

These include people like Andriy, a successful migrant story and the owner of Blue Bay Cheese in Mornington; Mark and Dianne of The Bramble Farm in Langwarrin; Sally of The Cake Cottage in Frankston; and Armadeo of Globeline Automotive in Seaford. These are the very people that this legislation would help. There is never a point when these people stop working or stop worrying about the impact of governments' economic policies. Let us give them one fewer thing to worry about and give them the security and predictability of easing tax rates over the next decade.

These are the reasons I am strongly supportive of this legislation. Secure economic modelling outlines the positive trajectory of wages and investment with a reduced corporate tax rate—lowering the tax rate for businesses with an annual turnover of less than $10 million by 2.5 per cent by 1 July 2017, extending the reduced rate of 27.5 per cent to all corporate tax entities by the 2023-24 financial year and then progressively reducing that rate to 25 per cent for all businesses by 2026-27. This is not a tax cut for big business. This is a tax cut for all business. In doing so, we will improve job security, wages and investment in our industries, both in Dunkley and across Australia. This is a positive plan for more jobs and economic growth that is backed by evidence and is completely funded. I call on members opposite to support this legislation and to give our local businesses the help that so many need and deserve, and to make Australia competitive again.

Debate adjourned.

See this speech in context