Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Cook for his question. I can inform him that small business employs about 3.3 million Australians and is absolutely critical to the success of the Australian economy. In fact, in the last 10 years there has been a 12 per cent increase in the number of small businesses in this country. In the recent budget, the government announced a number of measures to assist small business further. One was increasing the assets test so that small business could get the advantage of capital gains tax rollover. They could get the 15-year exemption on capital gains tax and the retirement exemption. Another measure was cutting the incorporation fee from $800 to $400, at an estimated cost of $216 million over the next four years, to help small business with incorporation fees.

One of the major improvements for small business which this government announced in the budget was an improvement in the depreciation arrangements by increasing the diminishing value rate for depreciation from 150 per cent to 200 per cent. Let me give the House some examples of what this will do for small business. For a business acquiring a new truck worth $230,000, this budget announcement alone would give a benefit of $15,333 in the first year of ownership. In other words, the write-off, by increasing the diminishing value, would be of direct benefit to that small business. For a farmer acquiring a tractor worth $90,000, the change in the depreciation—the diminishing value depreciation rate—will give a benefit of $6,750 in the first year of ownership. These are very strong incentives for investment in new plant and equipment and they are real benefits.

I was thinking of these real benefits to small business as I was sitting in my Canberra flat last night, cold and alone.

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