Steve Irons (Swan, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017. I would like to begin by thanking the Minister for Small Business for introducing this bill and including the extension of the instant asset write-off as a key budget measure. I thank the minister for all the work he puts into his portfolio, the work that assists almost 20,000 small businesses in my electorate of Swan alone. I know the minister was a small-business owner himself, as I am. In fact, a large number of members on this side of the House have been small-business owners. That is why we know just how much of a positive impact bills like this will have on hardworking everyday Australians.

Across our great nation there are 5.6 million Australians—almost a quarter of our population—working and earning a wage from one of the 3.2 million small businesses. In my electorate of Swan, this includes businesses in the Kewdale-Welshpool industrial hub and the Belmont Business Park. It includes the extensive cafe and restaurant strip along Albany Highway in Victoria Park, in which my electorate office is located, and where there are more than 100 car yards. In fact, I started my own business in Anvil Way off Division Street in Welshpool all the way back in 1988 and continued to work in the air-conditioning and refrigeration sector for more than 25 years, after spending seven years as the state manager for a national air-conditioning company.

The 2017 budget extends the $20,000 instant asset write-off for a further 12 months to 30 June 2018 and the turnover threshold will be lifted to $10 million, actively improving cash flow for small businesses, helping them to reinvest in their businesses and to replace or upgrade their assets. I have listened to the speeches of people on the other side of the chamber today, who talked about going to the last election with their definition of small businesses as being $2 million. If you know anything about small business, you will know that, across the sectors, including government, insurance companies, and various NGOs and not-for-profit bodies, there are different definitions of a small business. For me, the definition of a small business goes to the amount of people they employ, and $10 million is a reasonable level to classify a small business. When I was running my business, there were only three people working in it and it had a turnover of in excess of $6 million. The problem for the Labor Party is that they think the $2 million is profit. They just do not get that there is a difference between turnover and profit. That is why they are saying that a small business is $2 million. Their definition of it is totally incorrect. There are a lot of companies out there with only three to five people or maybe even 10 people—which is a small business by a lot of definitions throughout different sectors—that turn over far more than $2 million. But, because the Labor Party do not know anything about small business, they come in here and say, 'We have people who work in small business,' and they educate people on how to deal with media. Giving lessons to union people on how to do interviews with the media is not a small business. It is not creating anything and it is not employing people; it is just pretending to be a small business.

The 2017 budget extends the $20,000 instant asset write-off, as I said before. So how does this actually work? For the benefit of those opposite, let me break it down further. Accelerated depreciation has two arms: immediate depreciation for each asset less than the threshold of $20,000 until 30 June 2018; and pooling for assets costing more than the threshold which cannot be immediately deducted under other provisions. 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—15 per cent in the first year and 30 per cent in each year after that—small businesses do not need to spend valuable time tracking each individual asset against different depreciation rates over time. Anyone who has run a business would understand that the depreciation tracking and depreciation schedules have been maintained over many years. I know, having been in business before there were tools introduced by the coalition, this particular process was very time-consuming—particularly for accountants, who charge a fair amount of money.

As to the GST, if the small business is registered for GST, then the GST-exclusive amount is taken to be the cost of the asset when calculating depreciation amounts, and the immediate deductibility threshold is $20,000, exclusive of any GST. For those on the other side who might not know—as the Premier of Queensland did not know—the GST rate is 10 per cent. So you can actually buy, as a business which is registered for GST, an item worth $22,000, and the actual write-off is the $20,000 threshold. Where the entity is not registered for GST, then the GST-inclusive amount is taken to be the cost of the asset in the depreciation calculations, and the immediate deductibility threshold is $20,000, inclusive of any GST.

As a proud Liberal, I see it as our duty to nurture and encourage our citizens through incentives, rather than to only impose limitations. The role of government is to provide an environment in which private enterprise will thrive. It is our duty to provide opportunity for all Australians to facilitate wealth, so that all may enjoy the highest possible standards of living; to foster an environment in which the people we represent can achieve their goals; and, perhaps most importantly, to promote individual freedom and free enterprise—arguably, most evident in the small businesses across this nation.

Ninety-nine per cent of all Australian businesses are small businesses, and they collectively contribute $380 billion to our gross domestic product annually. As we, on this side of the chamber, understand, small businesses are the backbone of Australia, and to help them grow and succeed will mean greater employment opportunities and better opportunities for all Australians.

I have heard those on the other side today saying that Labor is the party of small business. In the whole 25 years in which I ran a small business, I never once thought that Labor were the party of small business. All I ever saw was that, whenever Labor came in, they made it tougher for us; they imposed more restrictions on our freedom to operate; they imposed heavier taxes. They also imposed on us the '93 difficulty. I know that in my business I went without pay for 10 months, purely because of the fact that Paul Keating's policies made for a terrible onslaught on small businesses, which suffered dramatically.

As the minister would know from his own experience as a small business owner, the rules around depreciation of tools and equipment are complex and variable. If something like this measure had existed back when I was running my business, I would have saved hours and hours of accountancy time over the course of the 25 years I was in business.

Every dollar that is spent in small business is an injection of confidence into that business and, by extension, into the local community. It creates a chain reaction that extends from our small businesses. While those on the other side of the House seek to further make our small businesses less competitive, we, on this side of the House, are giving the backbone of our country the tools necessary to expand and compete in the global economy, and ensuring that we live up to our word on backing small business.

$5.8 billion in red tape has been abolished by the coalition government. This means saving business owners time so that they can focus on growing their small businesses and not on complying with some bureaucratic process that does nothing to deliver for the greater community.

We on this side of the House have small business experience. I know how hard my good friend the member for Wright worked in running his trucking business. I know that the member for Gilmore worked tirelessly to ensure her fudge-making business was successful. I know that the member for Fadden had a big business before he came into parliament. He had an IT business that employed 160 staff. I doubt whether anyone on that side of the House would ever have gone near employing 160 staff. They might have worked, through their union processes, to make sure that 160 staff were pushed off sites or sacked from companies—or, when they drove businesses into the ground, they got rid of 160 staff.

I can remember when I was on a building site as an apprentice. I see that the Minister for Small Business is here; he would get this. The first thing that happened to me as an apprentice was that the union shop steward, who was Scottish and had red hair, came onto the site and, while I was up on a scaffold, insisted that I produce my union ticket. Unfortunately, after 20 minutes of abusing me—because I said 'I'm working and I'm not coming down'—he walked off and said he was going to shut the site down. I must admit that I did wait until he got about 50 metres away and then I called him back and said, 'Sorry, but I'm an apprentice.' His disgust in that situation at missing out on an opportunity to shut the site down was palpable; you could see that he was so disappointed. As someone said a long time ago, if we got rid of all the Scottish Unionists in Australia we would probably be in a much better place.

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