Michelle Landry (Capricornia, National Party) Share this | Hansard source

Time and time again we hear of the need to cut red tape to make it easier for small business. Thanks to the coalition government, action is catching up with the rhetoric. The government's efforts to support small business are being felt across the nation. I applaud the Minister for Small Business for making a real difference to the businesses of Capricornia.

Throughout Capricornia, small businesses have been suffering, with continued delays in new mining approvals and a lack of support for major new infrastructure projects from the Labor state government. But in the resilient spirit that is Central Queensland, small businesses persevere. Running a small business is tough in an ever-evolving economic landscape. I think back to the days when my own parents ran Lucky Daniel News & Casket Agency in Rockhampton. It was hard enough then to make a decent income—so much so that, on occasion, I would have to step in and help out when my mother would go to work the night shift as a nurse. As hard as it was then, my parents did not have to navigate the complex system we simplistically label as 'red tape'. They did not have to worry about BAS statements. They did not need to worry about social media strategies and ensuring their business had an appropriate digital presence. They did not have to worry about competition from online suppliers and competition from major internationals. They did not have to worry about how they were going to pay staff members double time and a half and still be able to feed their family at the end of the day. Running a small business today is just that—running. It is running from union pillar to taxation post and back again, via digital trenches and gutters of compliance.

The steps the coalition government is taking have real and measurable outcomes. An immediate business tax deduction of $20,000 for purchasing assets can make a big difference. It is the difference between buying the computer that will allow them to better manage their online presence. It is the difference between being able to afford opening on a Sunday in the hope of countering losses from 24/7 online competitors. Extending the instant asset write-off program is the highlight of the budget for small business. The measure has proved to be one of the most popular government small business incentives. It encourages Australia's 3.2 million small businesses to invest in their business. Based on current lodgements of the 2015-16 tax returns, as at the beginning of May 2017, around 220,000 business have reported that they have utilised the IAWO. That is around $1.9 billion in deductions for the 2015-16 financial year. This number is expected to increase as more businesses lodge their income tax returns.

What does this mean for small businesses in Capricornia? It was just last week that Minister Fiona Nash and I walked through the main street of Rockhampton. We visited Stewarts, a department store operating since 1862. Bruce Woods praised the efforts of the coalition government and the efforts to support small business. When Prime Minister Malcolm Turnbull was in town two weeks ago, we were fortunate to visit a number of new small businesses, including Dingles Cafe & Bar and Headricks Lane. Both of these businesses have shown confidence in the measures being made and confidence that the measures will push the economy in the right direction.

The instant asset write-off will improve cash flow for small-business, providing a boost in productivity and helping small-business owners to reinvest in their business. Improved cash flow will also give businesses the flexibility to hire more employees and pay staff more. When small businesses purchase more or buy assets locally, the community and other businesses directly benefit from the flow-on effect of that purchase. They have that little bit of extra cash to support the local hockey team or to take on a new apprentice.

What we are hearing is that small businesses around Australia feel energised by the small-business measures in our budget. We are hearing that it has given them the confidence to carefully invest in growing their business. Rockhampton chartered accountant Ms Sarah Becker, from James Becker & Co, has said that the $20,000 immediate tax deduction for small business purchases is being taken up by a number of her clients in order to get their businesses up to date and ready for increased future capacity. Mr Chris Harris from CT Harris & Co, who is also in Rockhampton, has applauded the small-business tax package. He explained that many of his clients have already take up the $20,000 immediate tax deduction by bringing forward the acquisition of items that were previously only on the wish list. These small businesses will use the purchase of assets to generate income and boost struggling regional economies. By allowing small businesses to purchase both old and new items, the continuation of this package is boosting not just the market for new products but the second-hand market, which benefits even more small businesses. Mr Harris has said that this ensures there will not be a negative effect on the second-hand market and has commended the government for this foresight.

Every dollar spent in a small business is an injection of confidence into that business and the local community. Small businesses and industry groups have been vocal in their calls for an extension to the program. This has been well received by small business stakeholders following the budget.

The extension of the package has also been welcomed by rural communities. Ken McCaffrey, a well-known livestock agent in Queensland, was saying that he has been talking to a number of property owners. Overall, he says, the fact that farmers can deduct the cost of water facilities and fencing in the year that they are purchased and deduct the cost of fodder storage assets over three years has meant a boost not just for those farmers themselves but also for related businesses in rural communities that will be supplying the fencing materials and other equipment required.

Capricornia is home to 12,927 registered small businesses. The instant asset write-off supports businesses to reinvest in the local economy. For example, if Olive Catering wants to expand its operations and purchase a mobile kitchen or buy a new coffee machine, they can take advantage of the generous incentive. Design+Architecture may need a new drafting table so that they can better prepare designs to bid for the Mount Archer redevelopment; they can now write that off, too.

The figures speak for themselves. As at 4 April 2017, with 60 per cent of the 2015-16 returns counted, over 200,000 claims have been made. This is an increase from 153,000 in 2014-15 and 117,000 in 2013-14. The average claim size in 2015-16 was $8,547.

Finally, I would like to touch on the importance of the depreciation deduction. Allowing pooling for assets costing more than the $20,000 threshold will allow for longer-term financial planning and cash flow. The pooling arrangements are available to small businesses to provide greater simplicity for their tax affairs. As the pool depreciates all assets in the same way, small businesses do not need to spend valuable time tracking each individual asset against different depreciation rates over the time.

Almost Anything, a web and graphic design business in North Rockhampton, is a perfect example. Almost Anything have a high turnover, but the profits are marginal. They can now benefit from an increase in turnover to $10 million. They can purchase a new printer so that they can perform die-cut printing services and better compete with online companies. The printer costs over $50,000, which is above the threshold, so they are not able to claim an immediate deduction. However, Almost Anything can depreciate the asset through their general small business pool. If the value of the pool falls below $20,000, the entire pool balance can be immediately deducted in that income year, providing an additional cash flow benefit. Because the business is not limited to just one purchase, and thanks to the forward cash flow, they can also purchase branded vehicles for staff, to help promote their business. It falls under the $20,000 threshold, so they are able to write it off instantly.

The extension of this budget measure will build on the tremendous success already achieved. The measure has proved to be one of the most popular government small business incentives, and encourages Australia's 3.2 million small businesses to invest in their business. A strong small business sector means more jobs for Australians and more opportunities to build vibrant local economies across the country. Small business is the backbone of our economy and the backbone of Capricornia. Most small businesses do not have a team of accountants, ongoing administration support or marketing departments; they do the work themselves, and they have to continually navigate an increasingly complex business world. Every new compliance requirement and government regulation means less time to focus on growing their business and employing more people. This continues the government's strong record of backing small business to grow and deliver more and better-paying jobs by helping them replace or upgrade their machinery and equipment.

By continuing to reduce red tape the coalition government is proving its commitment to the working class. Making business easier for Australians will deliver more for everyday families than what union-driven compliance will ever achieve. Thank you, Minister, for your work to support the small businesses of Capricornia.

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