Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Hansard source

I am pleased to speak on this motion by the member for Mallee because it gives me an opportunity to point out just how recent the conversion is, by the government, to the needs of small business. I have spoken on a number of private members' motions on small business by both sides of the House since the election and they have always been in the Federation Chamber. This is the first time I have had the opportunity to stand in this chamber on a government-side motion on small business. That is not surprising, because all the things they are so proud of, at the moment—the instant tax write-off, for example—they were attacking just a year ago. They are now very pleased to have introduced instant asset depreciation, and we on this side support the action they have taken—but just a year ago they were removing exactly that tax assistance for small business.

Labor in government introduced a range of tax measures, including the instant asset write-off, back in 2011, which increased the write-off threshold for small business from $1,000 to $6½ thousand. Business welcomed that. Small business was delighted by that. But when the government first came to office, in 2013, one of the first things they did was set about abolishing that. In 2014 they abolished some $3.5 billion worth of tax assistance to small business by abolishing that measure alone. Last year they considered that small business did not need assistance in purchasing assets; it did not need instant right-off. They abolished it. Not only did they abolish it but they did it retrospectively, so businesses that had made their plans suddenly found those plans undone by this government. Last year, there was a completely different view.

We had also introduced a loss carry-back for companies which, again, was incredibly well received and, recommended back in the tax forum a number of years ago, was well received by business. This was also abolished by the Abbott government last year. In total, over $5 billion in tax assistance to the small business sector was abolished. Now we have them standing up and crowing about this recent conversion—that instant tax write-off is really good and they are going to introduce it. Business had it a year ago. Government took away, and now it is wanting credit for putting it back—at a considerably lower level—and only for two years. We have already seen accounting firms and economists around the country talking about the danger of that, of introducing an instant tax write-off for two years that ends at the end of June 2017, where small business will pull their spending forward and we will see a bit of a cliff for many suppliers to small business around the end of June 2017.

We have to applaud the government here for its conversion. We have to applaud them for realising the error of their ways last year, of recognising that the abolition of the instant tax write-off last year was a mistake, and for setting about to undo some of the damage it did. And it did do damage. If you look at business confidence, over the last year it has essentially flatlined. It has been in free-fall since the election, in September 2013, and it flatlined at an incredibly low level—under 95—after the budget last year, and has sat there for a year, flatlined. We are now seeing a slight improvement, and thank goodness for that because business confidence has been at an appallingly low level. It is now back to where it was immediately before the last budget. I cannot say it is much of a recovery but it is, at least, back to where it was before the last budget.

We have also seen in the last few days some dreadful news on capex, which measures the extent to which business is planning on investing. This is business across the full range. We have capex, at the moment, down at recessionary levels. There has been quite a bit of economic debate, about the effect of this, over the last few days. These are incredibly poor figures for a government that believes it is about encouraging business.

I want to say one last thing about the language of this government, in getting up and telling business to 'have a go'. I have 16½ thousand small businesses in my community of Parramatta and they have been having a go for a long time. Since the economy has dropped and $5½ billion in tax assistance was ripped away last year they have been really having to have a go to survive. For the government to get up and tell them to have a go, now, is quite offensive. They have been doing it for a long time and they have been doing it very tough under this government.

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