Anne Aly (Cowan, Australian Labor Party, Minister for International Development) Share this | Hansard source

It certainly does. They also told me that the instant asset write-off and the extension of the write-off helps them to manage those challenges of daily cash flow. An example is the Indian grocer who buys a freezer so that their business can not just expand but also diversify and start selling naan breads that people can take home and cook at home. If anyone has not tried them yet, I highly recommend them. For small businesses needing to repair or replace items in order to continue to operate safely or efficiently, the write-off allows them to claim the full deduction immediately. That then eases the financial pressure to maintain day-to-day operations—for example, you might have a small manufacturer replace some machinery in order to avoid production stoppages. For small businesses wanting or needing to modernise, the ability to upgrade technology or equipment can improve efficiency, reduce costs and indeed enhance competitiveness.

For startups and new small businesses, the write-off provides immediate financial relief, helping new businesses invest without having to build up profits. An example would be a startup online retailer buying storage equipment or a young photographer, who is embarking on a career as a sole trader, going out and buying a new professional camera and lens. The expansion of the write-offs gives them the ability to buy what they need today. The items might be small in nature, but, when we look at small businesses, the diversity of small businesses, the breadth of small businesses and the fact that a large number of small businesses are indeed sole traders who do not operate from a physical premises, the instant asset write-off—though it can provide for small items—can actually make a humungous difference to these small businesses. And I don't think we should be dismissing the impact that the instant asset write-off has for the small businesses that, often, we don't think about.

I'm going to be very honest here and say that we don't think about our translators and interpreters as small businesses yet they operate with ABNs. We don't think about those small businesses for whom a relatively small piece of equipment is actually essential to them being able to establish their business, start up their business, grow their business or continue their business. For that reason, this measure supports fairness, because big corporations can more easily absorb shocks. They can more easily access finance and they can more easily take advantage of complex depreciation systems. Small businesses don't necessarily have that luxury. They don't have the luxury of being able to wait years to recover a cost through depreciation. They don't have big reserves to dip into when something breaks or needs repair or replacement.

The instant asset write-off lets small businesses reinvest and expand and employ people in their local communities. It's the difference between putting off an upgrade and improving businesses today. And I know, from speaking to business owners right across Australia, that this is one of the most impactful ways that we can back small businesses and help them through. But I also know that this doesn't fix every problem for every small business and that there is more to do. Another issue I hear about among small businesses wherever I go is about red tape. I know it's a bit of a motherhood statement, red tape, so I've charged the small businesses that I meet with to actually give me some examples of what red tape means.

Inevitably and consistently, what small businesses come back to me with is that red tape is a kind of shorthand for the fact that small businesses have to navigate three levels of government, often all at once. It can be confusing. It can be time-consuming. Sometimes they have to apply more than once or more than twice for permits and so forth. That's what I'm hearing from small businesses everywhere, and that's something that we want to tackle as well. The National Small Business Strategy outlines how governments will work together. That is the key here: governments working together to support small businesses by removing some of the complexities, making it easier for them to operate and creating environments in which they can operate and therefore thrive.

We are working with state governments to basically cut the clutter for small businesses—actively working and looking, together, for ways to reduce or eliminate this red tape or these layers and layers of compliance, without reducing or impacting quality. It's a big job and it is ongoing, but the enthusiasm of all the ministers from the different jurisdictions is inspiring. I would like to thank them and commend them for their passion for supporting small businesses in line with the federal government's own passion for supporting small businesses.

We are also working to level the playing field for small businesses, ensuring that the power imbalances that they face when dealing with larger businesses are addressed, recognising that they often lack market power as well, and increasing the pressure on large businesses with poor payment practices by highlighting the best and worst payment performers and strengthening communication challenges to promote prompt payment as an environment, social and governance obligation.

In closing—small business is big business. That's what it is. There are over 2 million small businesses around Australia. They employ over 5 million Australians, and 1.5 million of those are sole traders. If we don't back in small businesses, it means that we're also not backing in communities. It also means that we're not backing in economies where small businesses form the backbone of those economies. We understand that small business is at the heart of community and that small business isn't just about the economy; it's about people: the people who run small businesses every day, the people who dedicate their blood, sweat and tears to growing a business not for themselves but as a legacy, often for their families, and so that they can contribute. We recognise, I might add, as Minister for Multicultural Affairs as well, that over 30 per cent of small businesses are started by migrants. In my state of Western Australia 40 per cent of small businesses are started by migrants.

In extending the $20,000 instant asset write-off, we're not just supporting businesses but also backing people: people who take risks, people who work long hours and people who keep local economies alive. Labor will always stand with them because we know and understand that every piece of equipment, every tool and every shopfront opened represents something bigger. It represents confidence and the chance to build a better future. That's what this measure delivers, and that's what this government delivers.

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