Mal Brough (Fisher, Liberal Party) Share this | Hansard source

He is good for a bit of a laugh, isn't he? The old ideologue gets up and parrots the lines and just goes on and on and on. Can I take you back to the submarines? Do you want a little lesson on the submarines? Other than the fact that the propellers did not work and we had to buy them from someone else because 'our submarines sounded like a rock concert when they tried to stealthily disappear', other than the fact that the fire control systems were not as advanced as the Oberon, other than the fact they could not communicate with home, other than the fact that salt water used to get into the diesel engine, they were absolutely brilliant! And they were after the coalition came into government, changed the procedures, bought in the US and got something moving: a submarine. It is a wonderful innovation, but if we continued down the path we were on they would have been spending their whole time in the dock.

In 2009, the Labor Party changed this policy. What is this policy all about: employee share ownership scheme? It is actually about people. I say to the member for Charlton, as he wanders off to start to consider the loss that New South Wales are going to have inflicted today—

Dr Chalmers interjecting—

One thing that some of us agree with across the chamber is that Queensland are dominant when it comes to the rugby league tonight. But it is all about people. What the Labor Party did in 2009 was a form of class warfare. We heard it today from the shadow Assistant Treasurer when he said that there was concern amongst Labor ranks that, with an employee share ownership scheme, perhaps those who have the potential to earn more would have a differential tax rate to those able to earn less. What it did was remove aspiration. That is a great Australian tradition: people aspiring to do better, no matter where they started. It does not matter where you start in a company; it is what you contribute to it and what you contribute to your family, your community and your country. By being part of an employee share ownership scheme, you could have some skin in the game.

Let me take you to a good friend of mine, Tom Potter, who was Young Businessman of the Year some time ago, in the early 90s. He was the founder of Eagle Boys Pizza. That is not an innovative company in the form of tech start-ups, but it was innovative. He will tell you the story of good quality managers—that when they became franchisees they had skin in the game. The same stores that they were operating as managers would see marked improvement in their bottom line, sometimes exceeding 30 per cent because they had some ownership. So it is about people.

We have heard the shadow Assistant Treasurer and the member for Charlton wax lyrical about innovation. Innovation comes from the minds of individuals—people who can see things in a way that most of us unfortunately cannot. They see the future and then they try to make it happen through their skill sets. Since 2009, so much innovation has happened throughout the world. The shadow Assistant Treasurer mentioned Israel. He and I both travelled to Israel and saw the Israeli start-up nation founders and key people recently. We appreciate what they have done. What we learnt from them is that they did not hold back their people. They embraced the individual and gave them the opportunities to flourish. In doing so, they created wonderful things. In the other place, Senator Sean Edwards whilst there was saying how he has benefited from Israeli tech start-up businesses by putting their drip-feed irrigation into his vineyards. It shows you what you can achieve if you invest in people.

What the Labor Party did in 2009 was lose an opportunity. It lost an opportunity for Australia to stay at the forefront. Many people who could have contributed to our economy and grown the jobs that the member for Charlton refers to were lost to the Australian economy because the Labor Party decided on class warfare and being concerned about what an individual might earn as opposed to growing the collective pie and letting everyone benefit. When they talk about these things, what they have to acknowledge is that, through their ideology, they have actually driven good Australian potential entrepreneurs out of this country, taking with them their innovation. They have set up overseas and the opportunities and jobs that come from them have been lost. So it is timely that an Abbott-led government leads the way, values people, puts people first and says that the only way you get good innovation is to make sure that people have skin in the game and they can do so without a tax burden.

Those who are listening to this debate must be wondering how this worked under Labor's proposal. What Labor did for the last six years meant that, if I had a start-up company and I needed to employ a programmer or a software engineer and I really had nothing but my own sweat capital, my intellect and the idea to offer them a position, giving them a stake in the business meant that they had to recognise and realise a tax liability before they made any money. How familiar is that? It is like having a mining tax that does not raise any tax. In fact, it can cost the Commonwealth. The Labor Party has form on this. They did not do it once; they did it on several occasions. Here, it impacted upon the fastest-growing sector in the world economy, which of course is the digital revolution.

These changes that are being introduced today and that come into effect from 1 July this year are not only important; they are critical. They are critical because we have been behind the curve. Where we are seeing more innovation occurring each year, and growing at a rapid rate, time is of the essence. A great thinker in this field and a futurist told me recently that, for all of the innovation that the world has seen over the last 40 years—if you think about that for a moment and reflect, that is everything from the mobile phone, the internet, plasma screens and a million different bits and pieces—we will see four times as much innovation in the next 10 years. What the Labor Party did in 2009 is deny Australia's best and brightest the opportunity to work in Australia, to have skin in the game and to use their intellect, their vision and their passion to create jobs for Australians.

This is all about the ideological divide. Begrudgingly, the Labor Party come in here today and say out of one corner of their mouth, 'We are going to back this. However, here are all the awful things that the coalition do.' But this is good. It is rectifying a crucial mistake that the Labor Party made that, in four years in government, they did not see fit to overturn. When you fail, when you make a mistake, there is nothing wrong with that: we learn from our mistakes. But, when we fail to rectify them, that is when we compound the issue. That is what Labor have done here. Start-up companies and their owners will benefit from this, as the Entrepreneurs' Infrastructure Program, the research and development tax incentive, and the venture capital, limited partnerships, small business and capital gains tax concessions will all be of benefit to this incredible ecosystem.

On the Sunshine Coast, we intend to grow our economy, to deepen our connection with the start-up community, to make sure that companies like atmail, which is now taking the world by storm, are not isolated but become the norm. We will use the Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015 that we are debating here today to say to young entrepreneurs, to university graduates: come to the Sunshine Coast, because here you can enjoy lifestyle as well as the ecosystem to make your dreams a reality. Create the jobs that we need there. Broaden our economy from health, construction and tourism. Show people that working from your own home, starting in a garage, is not where you end. Some of the biggest businesses in the world today started in garages. They started because people could work together and have skin in the game by owning part of that business. This is a good policy. This is the way forward for Australia, and we need to do a lot more.

Shortly in the other place, in the second chamber, in addressing the appropriations bill, I will share with that chamber a few other ideas and ways in which we can take the innovation world and make it ours. We are competing against places like Singapore, which are giving tax-free status for seven years; Israel, being the second largest ecosystem; and of course Silicon Valley, which we all know about. But we have really talented people here. Let me read some comments from some of the people that I refer to in relation to this policy. An article by Paul Smith in The Australian Financial Review on 25 March states:

StartupAUS Peter Bradd said the changes would help attract and retain talent for innovative companies and make Australia's startup eco-system globally competitive.

We have no choice here but to be globally competitive. The member for Charlton talked about rust belts. Rust belts happen when you do not invest in your people and give them a chance to flourish. The article continues:

"Changes to the ESS [Employee Share Scheme] will help Australian start-ups become strong drivers of increases in job creation and, because many help to drive technological change, this will lead to productivity gains and job creation for our economy," Mr Bradd said.

There were many similar comments from people such as founder and CEO of Engagement Innovation, Tim Glover, also a former PwC director. He agreed, as the article states:

"Start-up leaders can consider this a green light to inviting key employees to participate in an ESS with little downside tax risk to the employee," Mr Clover said.

I come back to where I started from. This all happened because of the ideological beliefs of the Labor Party and class warfare—that someone should not get ahead, that we all should be equal. We are here because of our intellect, because of our capacity to drive change and to drive innovation. People should be rewarded. They were not getting something for nothing, which is Labor's way. They were having to put the hard yards in, with no return. What Labor was giving them was a tax liability before they had realised any potential income—unbelievable. Now they can invest their time, their intellect, their passion and their commitment. In doing so, if they are successful and they return a profit to that business and it grows and their shares become of value, only when it is realised or when they leave that company will they have a tax liability. I am sure everyone listening to this would say: 'Isn't that just common sense? Isn't that the way it should be? How the hell can you be asked to pay a tax on something that has not actually realised an income or a profit?' Well, that is what the Labor Party do. They come in here and wax lyrical about innovation and science and technology, but let's look at their record. They did not back people. They did not back the intellectual capacity and the innovative capacity of Australians, and the coalition does.

I say to the innovators of Australia: come and look closely at the Sunshine Coast. We are going to set the world on fire. We want you to be part of it. We have an exciting future up there. Enjoy the lifestyle, enjoy the generosity of the people and, using the share ownership scheme, make sure that you are part of growing a stronger ecosystem in this start-up community for all of Australia.

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