Ben Morton (Tangney, Liberal Party) Share this | Hansard source

The Turnbull government is committed to providing tax relief for hardworking Australians. I rise today to speak on the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 because this bill forms a key component of the government's reform agenda to improve Australia's tax system for businesses and to drive further investment in our economy. This bill provides incentives for Australian businesses to create jobs, reinvest their profits, grow their businesses and succeed.

This bill immediately reduces the tax rate to 27.5 per cent for 870,000 businesses with turnover of up to $10 million. These businesses employ 3.4 million Australians. Information compiled by the Australian Taxation Office shows that, in 2013-14, 98 per cent of companies would have been subject to the lower small business company tax rate at a turnover threshold of $10 million. The bill will: reduce the company tax rate for all businesses to 25 per cent by 2026-27; increase the unincorporated tax discount for small businesses from five per cent to 16 per cent by 2026-27; and increase turnover thresholds so that more businesses can access lower tax rates. This government will do everything it can to pursue policies that encourage investment, because it creates jobs. The measures in this bill go right to the coalface and make positive changes that will absolutely help small businesses and, indeed, all businesses over time.

This bill is a tax-rate reduction road map, and businesses can see very clearly the tax reform direction in which Australia is headed and can start to plan their investments. These reforms will let Australian businesses reinvest more of their earnings in employing more Australians and growing their businesses. That means all Australians will benefit, with much of the economic benefits of a lower company tax rate going to workers as higher real wages, longer hours or additional recruitment.

Australia's company tax rate is higher than that of many other advanced economies. This bill is an important step in fixing this. It will allow Australian businesses to once again be globally competitive on tax. It will assist our businesses to succeed both at home and internationally, and it will encourage businesses to remain in and even relocate to Australia. The Senate Economics Legislation Committee, in their review of this legislation, received 29 written submissions. An overwhelming majority of submissions expressed support for the bill, with one of the key endorsements being on this very point—that this bill will help make Australia's corporate tax settings more internationally competitive and encourage higher levels of foreign investment in Australia.

It is important to note that complementary measures will ensure businesses are not able to avoid paying tax and are required to pay their fair share. Government is keen to support businesses with lower taxes but will ensure those businesses which seek to pay no tax are penalised. This includes tougher rules for multinationals that shift profits offshore and enhancing the ATO's enforcement capabilities.

I will go to the specifics of this bill. Schedule 1 amends the tax rate act 1986 to reduce the company tax rate. In the 2016-17 income year, businesses with turnover below $10 million will see a tax rate of 27.5 per cent. Schedule 2 increases the small business unincorporated income tax discount to 16 per cent by 2026-27. Providing unincorporated small businesses with a reduced rate of tax improves their cash flow and enables them to keep more earnings to be reinvested into their businesses. It also ensures that small businesses benefit from a reduced rate, regardless of whether they are operating as companies, sole traders, partnerships or trusts.

Schedule 3 amends the Income Tax Assessment Act 1997 to increase the aggregated turnover threshold for access to many small business tax concessions to $10 million. It is long overdue. The aggregated turnover threshold for access to the unincorporated small business income tax discounts will be increased to $5 billion and the current aggregated turnover threshold of $2 million will be retained for the small business capital gains tax concessions.

More than 90,000 additional small businesses will be able to access a range of small business concessions. These include simplified trading stock rules, a simplified method of calculating pay-as-you-go instalments by the ATO and the option to account for GST on a cash basis and pay GST instalments as calculated by the tax office. On average, small businesses face higher costs of complying with their regulatory obligations as a proportion of their turnover and income compared to larger businesses. We need to change this, and this bill is an important start. Eligible businesses will be able to use small business concessions to reduce their tax liability and compliance costs and improve their cash flow.

Small and medium businesses are the prime drivers of jobs and growth in our economy. A tax on their business is a tax on their innovation, entrepreneurship and investment. It ends up being a tax on jobs that they create—or are prevented from creating. When they invest and grow, we all win. That is why there are so many supporters of the changes put forward in this bill. Along with the 870,000 businesses set to benefit, the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Australian Industry Group and the Council of Small Business Australia have welcomed the government's focus on small business and the reforms that actually improve the bottom line for those businesses.

I have met with so many small businesses since becoming the member for Tangney—mums and dads and families; hardworking Australians employing hundreds of people in Tangney and champing at the bit to invest in and grow their businesses. As someone who comes from a family dedicated to small business and employing people, and as someone who stands in this chamber today who has actually interviewed people and given them their first jobs, I know, fundamentally, the importance of creating an opportunity for small businesses to flourish and grow. The prize for the application of a small businessperson's effort is to grow their business, employ more Australians and prosper. It should not be a higher tax rate, but that would be the case if this bill is not passed. This bill brings down taxes for Australian businesses—immediately for small and medium-sized businesses. This bill must pass this and the other place as soon as possible.

But we all know that Labor, the Leader of the Opposition and their union mates have chosen to oppose the reduction in the company tax rate. They have put populism before good policy once again. Labor and the unions hate it when people apply their own effort and succeed. The Australian Council of Trade Unions was critical of the proposed company tax changes following the 2016-17 budget, stating: 'A corporate tax cut is not a jobs plan.' But that is absolutely rubbish.

The contributions in this place from members opposite to the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016 were nothing but disgraceful. That bill is so relevant to this legislation before the House today. This government drew together feedback from businesses and the preliminary findings of the investment approach analysis to devise the innovative Prepare-Trial-Hire Program that will make a difference to young people's lives. The Youth Jobs PaTH intervenes with early investment and training to get people into work and off a path to lifelong welfare dependency. The program will increase young people's employability and provide them with real work experience to get the start they need in the workforce and will focus on making sure young jobseekers know what to expect when they get into the workforce and what is expected of them.

It is good to be joined in the chamber by the member for Swan—a good friend and someone, like many people on this side of the chamber, who has experience in running small businesses, employing people and giving people a start. He knows full well, like many people on this side of the chamber, including the member for Stirling—

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