Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

My question is to the Treasurer. Treasurer, if a small business paying the company tax rate purchases a new ute worth $35,000 after 1 July this year, will not the first-year after-tax benefit from the government's instant asset write-off arrangements be $1,300, not the $6½ thousand that the government was claiming yesterday?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I will restrain myself, Mr Speaker. I just have to go back and run through some of the facts. We have a $6,500 instant asset write-off which can be claimed by up to 2.7 million small businesses. That will be a very substantial benefit, particularly to the cash flow of many struggling businesses right around our country. In the last budget, we did say that the first $5,000 of any car purchase—namely, a ute—could be written off within that framework. That is what we have said so yet again I have not the faintest idea what he is talking about.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

I have a supplementary question, Mr Speaker. Will the Treasurer confirm that any first-year tax benefit will be offset by higher tax liabilities in subsequent years, so that the net value to the business of the instant asset write-off over the life of the asset is likely to be about $300 and not the $6½ thousand that the government was claiming yesterday?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

This is a fundamental reform because we are—

Opposition Members:

Opposition members interjecting—

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

It just shows that you do not get it.

Peter Slipper (Speaker) Share this | Link to this | Hansard source

The Treasurer will be heard in complete silence for the answer to the supplementary question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

This is one of the most fundamental reforms that we could make to the tax system for small business. It has a very substantial benefit in terms of cash flow in the year that it is claimed and it also simplifies the system because it does away with complex depreciation schedules. So this is really welcomed by small business. This is one of the recommendations of the Henry review, and we are doing it in an affordable way.

Mr Van Manen interjecting—

Peter Slipper (Speaker) Share this | Link to this | Hansard source

The honourable member for Forde will remove himself from the chamber under the provisions of standing order 94(a).

The member for Forde then left the chamber.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Those opposite are acutely embarrassed by the fact that they have voted against this measure both in the House of Representatives and in the Senate, because it brings the benefits that I was talking about before.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I raise a point of order, Mr Speaker. The Treasurer is not being directly relevant to the question; the issue was the value of the write-off being $300 not the $6½ thousand claimed.

Peter Slipper (Speaker) Share this | Link to this | Hansard source

The honourable member for Cowper will resume his seat. Has the Treasurer concluded?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Yes.