Susan Templeman (Macquarie, Australian Labor Party) Share this | Hansard source

I think it is interesting that yet again from the member for Durack we hear claims that nobody on this side of the House has any idea about small business, yet there are people here who have been in small business for much of their career. There are people who have partners in small business. It really behoves those opposite to take a look at the expertise on our benches. You are going to be looking at it all too soon from the other side if you are lucky enough to still be here.

Labor will support the Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017 to extend by 12 months to 30 June 2018 the period in which small business entities can temporarily access expanded accelerated depreciation rules. And I am not going to have to switch this speech into a speech about jobseekers and universities, because I will be able to talk about small business and what we want to see for small business for my remaining 14 minutes and five seconds.

Labor recognises that Australia's small businesses make a huge contribution to our national prosperity, including providing a livelihood for millions of Australians. Over two million businesses—sole traders, partnerships, trusts and small employers—have helped underpin more than 25 years of continuous economic growth. In my electorate of Macquarie, there are around 11,000 businesses, with around 5,000 of those employing one person or more locally. Until July last year, I ran a small businesses. Those opposite look a bit surprised: 'Gosh—are people who support Labor allowed to run businesses?' In fact that is how I came to appreciate the benefits to the economy that a Labor government brings. I started a business when things were definitely tough for the country, but we had the right policies in place to take us through. I grew up in small business. My father was a newsagent. I looked at what it takes to be a good employer, to know that you are making money out of your staff but that you are treating them as family. Then you have a loyalty—something those opposite have no comprehension of.

Labor is very proud to have led the debate in this policy area. I believe that in recent years in particular we have offered really practical policies to support Australia's industrious small business sector. Above all, we know that if people do not have cash in their pockets to spend in their local businesses, those local businesses will not survive. And that is one of the key things those opposite do not understand. They do not appreciate the impact that taking penalty rates out of someone's pocket is going to have in my electorate from 1 July.

Last year, we took a comprehensive suite of small business policies to the federal election including a responsible plan to cut company tax for small businesses with turnovers of less than $2 million. As a small-business person, I struggle to understand how you can justify a $10 million turnover for a small business. Once you are turning over $10 million, unless you are doing something really, really clever that I am not sure would be legal, you really have to question whether you are running as a medium-size business, with all the supports that your staff need, or whether you are simply running as a small, do-it-all-yourself business. I would argue that once you start to get up past $2 million, you should be putting in the supports of a medium-sized business. We are very firm that businesses with under a $2 million a year turnover definitely deserve that extra incentive for the hard work that we all know they do.

We also took to the election a plan to level the playing field for small businesses by ensuring that multinationals pay their fair share of tax. There is nothing worse, as a small business, than seeing this uneven playing field where these gods up here seem to get away with blue murder and you, the small-business person working seven days a week, often 15 or 16 hours a day, giving up your Sundays to do your MYOB, can see the unfairness of that situation. We also took a plan to help small businesses incorporate without additional red tape, because we recognise that a lot of businesses do miss out on some of the tax benefits by not being incorporated, yet they do find it daunting to go through the current process. We also took a range of other innovative policies to assist small businesses better access finance and help entrepreneurs start their own businesses.

I am pleased to say that Labor has continued to fight for small business in this parliament, and I am pleased to have been part of that fight. We continue to develop and advocate for policy that will benefit Australian small businesses, helping them to grow and prosper. I just want to talk about a couple of those policies. In February we introduced into the Senate the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017. These access to justice reforms would help small businesses take cases of anticompetitive behaviour to court. Can you imagine what it is like as a small business when you are up against one of the big guys? It is bad enough in the advertising war, let alone when there is a legal issue at stake. We know small businesses are less likely to take up private litigation against anticompetitive behaviour. It is just too daunting. There is too much at stake—often their home. It is because big businesses have deep pockets and armies of lawyers, so the risk of small businesses being overwhelmed and having to pay the big business's legal fees is a significant obstacle. The Productivity Commission and the government's own competition review say that small businesses are disadvantaged in the court process. But the Turnbull government has refused to address this inequity. Labor's bill will restore the balance by letting a small business request a no adverse costs order very early in the court case. This will help level the playing field, give them confidence to pursue cases and encourage more small businesses to take on anticompetitive behaviour.

The other policy area that we have done a lot of work on and have announced is a package of reforms to tackle illegal company phoenixing, a practice that often leaves small businesses—tradies, people who have put in the blood, sweat and tears—ending up with no money. They end up with unpaid debts that they are never able to recover. They have bought the materials, they have done the work, they have paid their staff but no-one is paying their bills. I draw the House's attention to some comments that were made just yesterday by the Australian Taxation Office commissioner, Chris Jordan, who confirmed that there really is a need for action on dodgy phoenix operators who deliberately burn companies in an attempt to avoid their obligations to employees, taxpayers and honest businesses. The tax commissioner told a Senate estimates committee: 'This is not a new issue. Phoenixing is a big problem, especially when you have these people that are unassociated with the principles. You cannot keep track.' There we have the ATO telling us how difficult it is to keep track of people intent on doing the wrong thing. When speaking about how easy it is to become a company director in Australia, Mr Jordan said this to a senator: 'I could appoint you as a company director without you even knowing and me then controlling the company.' That shows you the holes that there are at the moment. The tax commissioner also noted: 'In other countries proper identification checks are required for anyone wanting to become a director.' Apparently, here, you can almost register your dog as a company director because there are no checks required.

Illegal phoenix activity costs our economy billions of dollars annually, and that is why we have announced the following measures. First, we want to require all company directors to obtain a unique director identification number, with a 100-point identification and check. We expect this of so many other people. If you are on Centrelink you have to have a number. If you are receiving a Medicare benefit you have a unique number and it does not change. If you are registering for any other government facility or service you need a number. Yet, for some reason, you can set up a business and not be identified. So the 100-point check is a really good step. It is only as hard as getting a bank account.

Second, increasing penalties will also be associated with phoenix activity; third, we want to introduce an objective test for transactions depriving employees of their entitlements; and, fourth, we want to clarify the availability of compensation orders against accessories. These measures are based on recommendations from the Melbourne Law School/Monash Business School Phoenix Research Team recommendations. They are well thought through and they are very much needed.

It is just not us calling for a director identification number; among the people who think it might not be such a bad idea are the Productivity Commission, the Australian institute of Company Directors, the Australian Small Business and Family Enterprise Ombudsman, the Australian Chamber of Commerce and Industry, Master Builders Australia, the Australian Council of Trade Unions, the Australian Restructuring Insolvency and Turnaround Association and, of course, the Phoenix Project. So you do have to wonder why, when it is such a sensible idea, that is not the legislation that we are discussing right now.

But let me turn to the instant asset write-off. It was Labor who first identified the value for Australian small businesses in increasing the immediate deductibility threshold. I remember when Labor was in government in 2012 that the threshold for small businesses to write off capital purchases increased from $1,000 to $6,500. That increase meant that it became a bit easier to buy, say, the $3,000 piece of equipment and receive deductibility in the same financial year. That was a good move for a small business that wanted to become slightly bigger.

I first became aware of the whole cost-of-growth issue as a fledgling business in the early nineties. As a journalist I had reported on the issue of cost of growth in the eights from Old Parliament House, but I had not really understood it until I experienced—the issue being, of course, that if you want to grow your business there is often a significant leap of faith that you have to take to hire more people, rent bigger premises or buy a new piece of equipment. A higher instant asset write-off does not solve all those problems at once, but it does mean that the cost of an asset is defrayed more quickly in one go rather than by using depreciation over several years.

As a small business operator, I was pretty shocked that, among the many horrors of the 2014-15 budget, the Abbott wound back this successful Labor initiative. It reinforced my view that Liberal governments might pay lip-service to small business but, at their heart, they are a friend of big business every single time. They only come to the side of small business when they are dragged kicking and screaming. And, thankfully, they were dragged. Just 12 months later, the Abbott government belatedly recognised the error of their way and appreciated the value of Labor's instant asset write-off policy, reinstating and extending it to $20,000.

While Labor does welcome the Turnbull government's decision to extent the small business instant asset write-off, we also note that this measure is expected to cost the budget almost $1 billion in 2018-19. With this expense on the budget, Labor wants to ensure that the predicted economic benefits are being delivered. And we call on the government to evaluate and release the evaluation in full prior to any further extension. That is a sensible measure. I think small businesses would also like to see what the economic benefit is. They are frugal with their money. They know you just cannot throw it around. They would appreciate knowing that an initiative has not just been for their benefit but has also been for a broader economic benefit.

Regrettably, this budget has failed to address many other significant issues facing Australian small business. Small business owners right across the country have talked to Labor and, in my electorate of Macquarie, have talked to me about rising energy costs, inadequate broadband infrastructure and late or delayed payments as key priorities for them and some of the things that they want the government to address.

Waiting for payment—and I speak from experience—is debilitating for a small business. Getting the cash flow right is one of the biggest challenges that you face as a small business, because the first thing you do is pay your staff and your overheads; the last thing you do is pay yourself, let alone put anything aside for super. This budget contains no effort to address the payment terms problem exposed in the Australian Small Business and Family Enterprise Ombudsman's recent report into the practice. This is another issue we need to see addressed.

The NBN—it is hard to know where to start. The hopelessness of the NBN rollout in the electorate of Macquarie has really put pressure on small businesses. The reliance on fibre to the node in the upper Blue Mountains is a major issue for all sorts of professionals who run their businesses from home or who like to work from home some of the time. For an architect, for an engineer, for the accounting firms shifting large volumes of data or for the creatives in my electorate who want to upload amazing video and digital data, it is really difficult. In fact, one of my small businesses has had to relocate from the Blue Mountains down to the bottom of the mountains in Penrith, in the seat of Lindsay, where, thanks to Labor, he can access fibre to the premises. NBN should have been a game changer and a way to improve the economy in regions like mine, which are a long way from the CBD. Sadly, that is not going to be the case. This budget was an opportunity for the government to prioritise small business and for the Prime Minister to prioritise small business over his best friends at the big end of town. Yet, again, the Prime Minister and this government failed.

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