Teresa Gambaro (Brisbane, Liberal Party) Share this | Hansard source

I rise today to also speak on the Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016. This is a very important piece of legislation. I know that it has been welcomed by many businesses in my electorate of Brisbane.

This government is committed to growing the economy and creating more jobs for hardworking Australians. And our strong plan is working for Australia: the economy is transitioning well out of the mining boom, generating 301,300 additional jobs last year. Ninety per cent of those jobs were in the private sector, and over 60 per cent were full time. Youth unemployment is at its lowest rate since July 2013, and there are more Australian women in full-time work than ever before.

This bill will continue this agenda and will put into legislation the final item from the government's widely acclaimed Growing Jobs and Small Business package in last year's budget. This is absolutely great news for a large number of the many small businesses that I represent. There are 30,000 small businesses in the electorate of Brisbane. Whether they are thriving businesses in Fortitude Valley; some of the most innovative businesses in the CBD; Enoggera or New Farm—this is a very welcome bill and good news to them.

Small business owners who find they are using a legal structure that does not suit their needs will no longer be stuck with that structure. We recognise that for business to grow, adapt, innovate and remain flexible in this period of transition, we must in turn create the legislative environment that reflects all of those fluid changes that occur in the business world so they can be as flexible and innovative as possible.

We know that business has been stifled by overly onerous red tape. My office is constantly contacted by businesses who have struggled with the rules and regulations they have faced in the past, particularly under the various governments run by members on the opposite side. We have done a great deal to reduce red tape and to make sure businesses run at their absolute best efficiency.

Businesses based in my electorate—like Half Brick Studios, Alt VFX, Cloud Manager—all of these businesses have spoken about the new-found confidence in the business community as a result of this government's work. A large part of that is legislating important measures like the tax laws amendment. It is bills like these that display the government's commitment to small business operators, to mums and dads and to the many people who run a small business and grow our economy in Brisbane.

At the time of releasing this measure as an exposure draft, the government received broad support within the community. The Restaurant and Catering Industry Association said: 'The ability to change legal structure without incurring a capital gains liability represents a significant reduction in red tape for small hospitality operators'

They said that restructuring hospitality businesses almost always requires assets to be transferred from one entity to another, attracting significant income tax liabilities. That, of course, impacts on cash flow and available capital. This discourages expansion, meaning that some businesses remain inefficiently small, it reduces productivity and it dampens additional employment opportunities. The National Insurance Brokers Association had this to say of the bill: 'We welcome the proposals as there is an ongoing level of merger and acquisition activity in the insurance broking sector, and the reforms will allow small insurance broking businesses to restructure their legal status prior to sale or merger, in order to make the business more attractive to a potential purchaser. We note that the rollover benefits will only operate when the business remains owned by the same ultimate owners.'

I know that there are many people who work in the financial services industry, in the electorate of Brisbane, who will be particularly pleased. They will be able to provide a much higher level of service because they will be able to streamline many of these processes. This measure is estimated to have a cost to revenue of $40 million over the forward estimates period. Small businesses considering a restructure may obtain assistance from the Australian Taxation Office or by consulting a tax professional.

Introducing this particular rollover is another example of this government reducing the burden of unnecessary red tape on small business. It aligns with the Board of Tax's review of impediments facing small business. Tax is right up there as well as the red tape that I mentioned earlier. Any entity that carries on a business, when the combined annual turnover of the entity and its affiliates is less than $2 million, will be able to restructure and use this rollover provided the underlying economic ownership of the business assets remains the same. As a government we recognise that there are significant barriers and challenges that stand in front of small-business owners in today's economy; therefore we are doing absolutely everything that we can to ensure that from a legislative perspective they have all of the tools that are out there, including all of the tax tools that are available to them, to help grow the economy.

The small business may be a sole trader, company, trust or partnership and the transferee entity may take any of these forms. The rollover allows small-business owners to restructure their businesses by transferring assets to a different entity without incurring an immediate capital gains tax liability, provided that the ownership remains the same. The ability to restructure through the rollover should reduce complexity and make it much easier for businesses to grow. As a former small business operator in the hospitality industry, I know very well the hoops that need to be jumped and the red tape that has to be fulfilled every single day that they go to work. So we are using this experience in putting into practice ways to help small business. The new small-business entity will pay capital gains tax if and when it sells the asset or triggers a capital gains tax event. There may be state taxes, like stamp duty, payable at the time of the restructure, but we are doing everything we can—every small bit we can—to help small business.

This ability to restructure will be available from 1 July 2016. These are common sense amendments. They will make a huge deal of difference to the many thousands of Brisbane businesses that I represent. It is a much welcomed bill. I know that they will look forward to these amendments and the bills being put into place in the very near future.

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