Eric Hutchinson (Lyons, Liberal Party) Share this | Hansard source

One might have been forgiven for thinking in the first 14 minutes of the member for Fowler's contribution on the Tax Laws Amendment (Small Business Measures No. 1) Bill 2015 and cognate bill that there were no small businesses in his electorate, because he spent a lot of time there talking about the 2014 budget, which was the year before this budget which has these very, very welcome measures. He did reflect for a short time on the Leader of the Opposition's budget-in-reply speech. This was the contribution by the Leader of the Opposition where there was $220 million spent, unfunded, for the 29 minutes. Thank goodness he did not go for the full 30 minutes!

I have just been upstairs, as part of my role with the House of Representatives Standing Committee on Education and Employment. One submission that was made to the national inquiry we are holding at the moment was from Mark Brennan, the Australian Small Business Commissioner. Indeed, the member for Gorton and also the member for Perth were there, and I thank them for their constructive questions and contributions in that really important forum. This debate is about looking at the impediments for small businesses to employing more people. I suspect that they, if they had had a choice, would have certainly not wanted to try and gag the opportunity that all members in this place have—those on the other side and in the government—to talk about the value that small business creates in this country. Indeed, we want to ensure that Australia is the best place to start and grow a business. That is what I want to do in my electorate. I think we all came into this place to do good, to give something back and to let the innovative Australians that we know do what they do best. At the end of it all, it is about people. And we believe that the people in charge of small businesses in our communities—in regional Australia, in the cities—are the ones who know best. They are the ones who know best what to do with their own money and that is why we are giving them back money. We are giving them back their own money. It is not our money, it is their money, and that is why we are giving it back to them as part of the measures in this year's budget.

I want to ensure that my electorate of Lyons in Tasmania is a place where small business gets all the support it needs to thrive and to flourish. More than 95 per cent of all of Australian businesses are small businesses, employing more than 4½ million people, producing more than $330 billion of our nation's economic output every year. We know that it is the right time to invest in business as a driver in our country's positive economic future. This is what we as a nation must now be doing and we are giving the tools and the opportunity to those people who know best how to do that.

That is why it is the right time to introduce the first of the proposed legislation to guarantee a solid footing for these businesses. These tax law amendments have already been welcomed with open arms, particularly by small businesses, in the country areas of my electorate. Schedule 1 of the bill proposes amending the Income Tax Rates Act 1986 to reduce the company tax rate, from 30 per cent to 28½ per cent, for companies that are small business entities with a turnover of less than $2 million annually. We do know though, of course, that a relatively small proportion of small businesses in Australia are incorporated entities, so those that make up the majority will be given a five per cent discount on their taxation, up to a value of $1,000, which is commensurate with the measure in terms of taxation reduction. The amendments will apply for the first income year from 1 July this year and the measure was announced as part of the Jobs and Small Business package in the budget last month.

The reaction to this move has been overwhelmingly positive. I travelled around my electorate of Lyons talking to the many, many people that it will benefit. I spent the Saturday morning in New Norfolk, one of the larger population centres in my patch. It was extraordinary to see. We copped a bit of flak last year in our efforts to reset the finances of our nation, so I was not feeling too sure. I had my brochure but, when I walked into the hairdressers, they already knew—it was amazing how quickly good news had travelled! They all knew that there was an opportunity here for them and that there was something in the budget. They all knew that this was a government that was focused on them and their small businesses—whether they are cafes or hairdressers. I was quite taken aback. I could go on—I could list so many small businesses that will benefit from this in my patch. Indeed, as I say, it has been welcomed.

I have mentioned before Jane Shaw at the Ingleside Bakery at Evandale; Jane and her husband have a staff of 15 people. Most of them are casuals, two are full time, and she said that the size of these proposed tax measures would make a significant difference to their business. Keith Rice operates Primary Employers Tasmania, which is contracted to, for example, the poppy growers association. When I rang Keith about another matter he said, 'My wife has gone out and bought a new computer already.' These are the sorts of things that are happening on the ground.

While the Tax Laws Amendment (Small Business Measures No 1) Bill will reduce corporate tax rates by 1.5 per cent, the Tax Laws Amendment (Small Business Measures No 2) Bill will provide accelerated depreciation arrangements to small businesses and primary producers. Can I say—as I know I go on about it a fair bit in this place—that this is perfect timing for the irrigation development going on within the state of Tasmania. I do not want to sound like a broken record, and I apologise for that. It has bipartisan support, and I acknowledge the contribution, particularly, of David Llewellyn, the former minister in Tasmania. It was good public policy, it had bipartisan support, and I acknowledge the contribution of former Minister Llewellyn in the former Tasmanian Labor government.

It is just beautiful timing for so many farmers. I was talking to Richard Hallett, who is in the Southern Highlands Irrigation Scheme, a couple of days ago about this. They have already developed parts of their property and they have infrastructure in place. With the Southern Highlands Irrigation Scheme now confirmed, thanks to $60 million from the Commonwealth government, and the tax offsets, these immediate asset write-offs, the capacity for them to take advantage of the increased cashflow, which they will be able to generate from that opportunity, is truly significant. This will have enormous benefits for their local economy, as it will on the East Coast. Brown Brothers on the East Coast and Spring Vale Vineyard on the East Coast are all planning expansions on the back of the irrigation scheme, and this gives them a simple tool to be able to do that.

I think of Tim Schmidt from Deloraine. Indeed, for those that are paying tax it is toss-up whether or not to buy an $18,000 second-hand irrigator to smaller business. He will be able to write off that under the $20,000 instant asset write-off. Or, maybe, he buys a new irrigator, because as a primary producer he would be able to write off that $34,000 for the equivalent new version of the same irrigator. I also think of Howard Hansen. Howard is an interesting case study. Howard has significant orchards in the member for Franklin's electorate, and he also grows cherries in the Derwent Valley which is in the electorate of Lyons. He is planning on planting an additional 10 hectares of apples in the Derwent Valley, putting in a dam and putting in an additional 10 hectares of cherries in the Derwent Valley this winter. He is about to order between $150,000 and $200,000 worth of irrigation pumps, mains, filters and drip tubes. The additional investment of this money was not going to occur this year, but now Howard is seriously considering bringing it forward into this year. What it means is jobs. It means expansion of his business and it means more jobs for people in the Huon Valley in the member for Franklin's electorate, and it means more jobs for the people in the Derwent Valley in my electorate. This is all good news.

The bill will amend the small business simplified depreciation rules in the tax laws to increase the threshold for immediate deductibility from $1,000 to $20,000. As I have mentioned, this is a significant increase in the threshold, as the business owners in my electorate have been telling me. It will provide a major improvement in cashflow for many, many small businesses. While it is businesses that create jobs, there is a clear role for the government to address impediments and create the right conditions for small businesses to grow and become more productive so that more jobs will flow. That is our fundamental responsibility.

The Australian economy is in a transition. The declining terms of trade and the ageing of the population, which is something we should celebrate of course, are placing downward pressures on income growth. Obviously going into the production phase of the mining industry, there is a real need to see small business rise to the top. Small businesses are a key driver of Australia's economy underpinning growth and innovation and providing jobs, as I have said, for millions of Australians including thousands of Tasmanians.

These tax proposals have been carefully thought through after specific consultation with businesses, tax specialists outside of government and the ATO. As Minister for Small Business Billson says, 'We know from the Intergenerational report that there will be a significant challenge to maintain our country's current rate of income growth.' Future growth in living standards must be driven by higher levels of Australian productivity. It will need productivity growth to increase to about three per cent, which is well in excess of what Australia has achieved in the past 50 years, and more than doubles what has occurred in the past decade. Growth will need more and better quality goods and services to be generated from the resources we already have. Again, that is why this government has made small business the absolute cornerstone of the budget this year. It is the biggest small-business package in Australia's history, and at the heart of the package are the tax cuts and the instant asset write-offs for all small businesses, as we have mentioned.

The government are working to support jobs and small business. If you look at our record over the last 18 months, it really is a record of success and achievement, and we are a government that are delivering for the engine room that is small business in our economy. We have repealed the carbon tax, and we have repealed the mining tax. We have finalised three free trade agreements with South Korea, Japan and, most recently, China. There is more to come. We have announced $2.45 billion in annual red-tape savings, which does not sound very sexy, but let me assure you that this is the thing that stops people investing. We have established the $484.2 million Entrepreneurs' Infrastructure Program. We have created new employment opportunities through a significant $50 billion investment in transport infrastructure. That manifests itself in my electorate into things like new bridges and better roads and being able to get the products that are produced by the small businesses in my electorate to the markets, which we are opening up in Asia through the free trade agreements, more easily.

We have established a $6.8 billion job-active employment service. If you want to have a go, if you are a job seeker, if you are an employer, we want to support you. If you are a family with somebody looking to go back to work, we want to support you. We are supporting the VET sector. We have introduced Restart for those over 50s that have the experience and want to get back into the workforce, because we are going to need you. We are going to need you in the small businesses. They start to work on their businesses rather than in their businesses. This is something that we want to increasingly see. We have expanded tax concessions for employee share schemes and for unfair contract protections to small businesses. We know that many small businesses are doing it tough. The government know, and they believe in you and will support you. We need you to be working increasingly, as I said, on your business, not in it. Get advice. We will support you. We want your small business to become a big business.

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