Allegra Spender (Wentworth, Independent) Share this | Hansard source

I rise to speak on Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025, which, on balance I believe introduces some broadly sensible measures. I will not speak to all those measures however today.

Schedule 1 of this legislation brings cash settled equity derivatives under the beneficial ownership disclosure legislation, acknowledging that alternative financial products can have similar effects on owning assets. While this change will create some additional compliance requirements for holders of derivatives, I believe it is broadly consistent with greater transparency in Australia's financial market and is broadly supported.

Schedule 3 changes the reporting period of the Financial Regulator Assessment Authority from two years to five years. This measure does raise some concerns for me, as the FRAA was only established in 2021 and has delivered only one report for each regulator in 2022 and 2023. I understand that frequent reporting and analysis provides limited time to implement changes prior to another assessment. However, I am concerned that five years may be too far in the other direction, without sufficient data points to indicate that the difficulties with this reporting regularity outweigh the reduction in regulator accountability.

This is because I do have some concerns about the performance and effectiveness of regulators. I repeatedly hear from members of the business community and my electorate that regulators are not always meeting their requirements and responsibilities. In some cases, they are taking months or years to respond to cases and using workarounds, such as requests for additional information, to reset the clock to meet their reporting requirements. As one executive said to me, regulators have no natural predators, and, if the government is not able to hold them accountable for their effectiveness, there is a significant chance that they are causing damage by poor standards of support for the business community. This change in the legislation will put a greater onus on other parliamentary mechanisms of accountability, such as the committees' reviews of regulators, to ensure that the regulators are held to account.

Finally, I'd like to speak mainly to schedule 7, which extends the instant asset write-off of $20,000 for another financial year. Here we are again. Since I've come into this parliament, we have passed this instant asset write-off measure three times now, coinciding with each financial year since 2023. We have come to expect this amendment each year, yet we refuse to make it permanent. Despite the regularity with which this measure is passed, businesses still can't rely on it, because it is politicised, weaponised, senselessly debated, thrown in with other controversial measures, and held up for months in this parliament until the government finally relents.

In the financial year 2024-25, we passed this measure on the final sitting day of the financial year. So let's think of the timing here and what that means. This instant asset write-off is meant to incentivise businesses to invest, but the legislation for this incentive passed on the last sitting day of that financial year, which from memory was back in April—so a mere couple of months before the end of that financial year. So, for most businesses, over the previous 10 months this had provided no incentive to make that investment, because of that uncertainty—or, on the other side, businesses had actually made some purchases, having listened to the government make an announcement about this instant asset write-off, without really being aware that it hadn't actually passed through the parliament, so they were undertaking an enormous amount of risk in their own business.

This really makes no sense. People are caught between two stools. In 2025, it was the last sitting day of the financial year. In the last term, this happened only because the crossbench put significant pressure on the government and the opposition to come to the party and pass the legislation, because it wasn't on the agenda and we were coming literally to the last two days of the sitting calendar. The Senate was about to rise, and the legislation was just not going to go through. Again, there would have been an election. Again, we don't know what would have happened. Australian small businesses would have been left in the lurch. Businesses just can't make decisions under these conditions. It's just not fair.

As such, numerous small businesses and tax groups have called on the government to make this policy permanent, or at the very least make it more permanent, so that small businesses can plan ahead and have more confidence in the scheme. If we agree in this House, as I believe we do, that the measure is worthwhile, let's deliver the certainty that businesses need to invest.

One question is really: is it because there are not more interesting or innovative policies that the government could announce to support small businesses that they just have to roll this out every single year? If that is the case—if they don't have ideas on how to support small businesses—I'm happy to share a couple of ideas that I and others on the crossbench have put forward.

The first is to increase the threshold for the definition of a small business in the Fair Work Act from 15 to at least 25 people. Let me tell you why. The past five years have been tough on small businesses. COVID-19 lockdowns, followed by high inflation and high interest rates, eviscerated consumer demand. We are only now seeing some relief from this, five years on. Furthermore, the government has made, in my opinion, some retrograde choices on industrial relations legislation that have increased the complexity and created disincentives for small businesses to hire employees and expand their businesses. If the government would raise their threshold with a simple adjustment, it would relieve over 40,000 small businesses of the regulatory red tape burden designed for big corporates with hundreds or thousands of employees.

I've run a business. I've run a small not-for-profit with around 15 employees that grew to around 25 employees. I've run a business with more than 100 employees. I've worked in businesses with thousands of employees. They are quite different beasts. It does not make sense for each of those businesses to be under the same regulatory burden. Frankly, they just don't have the same resources to manage all the regulation that bigger businesses do. I think that needs to be reflected in the scope of the legislation and the scope of the regulation that affects small businesses.

Secondly, I believe that the government should strengthen the payment system reporting times regulation by making fast payee designation a requirement of procurement, as they do in the United Kingdom. Under the Payment Times Reporting Scheme, large businesses and some government enterprises that have an annual taxable income of more than $100 million, known as reporting entities, must report every six months on their payment times and terms for small business. But, apart from naming and shaming the businesses that are slow payers, this scheme doesn't really have a lot of teeth and consequently has barely shifted the dial on payment reporting times more than 30 days. Multiple reviews have highlighted the scheme's ineffectiveness in terms of changing those behaviours.

The change I propose is a modest one, given that we already collect all the data that is required. Furthermore, it would act as a real setting of expectations by large businesses, with currently about 15 per cent of government contracts held by some of these large-business slow payers. It's pretty simple. If, as a big business, you are a slow payer—if you are not paying your small businesses, your suppliers, on time, within 30 days—then you shouldn't expect to be able to access government contracts. That could make a real difference to small businesses and smaller businesses that are struggling with working capital, struggling to stay afloat. This is something simple that the government could do now, and I urge the government to act on this example, because it is something that could make a difference right now to small businesses that are struggling with working capital.

This type of proposal has been recommended both by the 2023 Emerson review of payment times reporting and by the payment times and practices inquiry of 2017. All we need is a government that is willing to act and to back small businesses to make sure they are paid on time and have access to working capital so they can continue to invest in themselves and also invest in their employees.

In conclusion, this legislation implements broadly sensible changes, and, as such, I will not stand in its way. But I am concerned that the government, and indeed regulators, have made an insufficient case for increasing the reporting period from two to five years. Lastly, I am disappointed that we do not have a stronger agenda from the government on supporting small businesses, because they need it. There are some great ideas out there on the table. It is time for the government to step up and to act.

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