Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

My question is to the Treasurer. With 556 companies being wound up in May by the Australian government—77 per cent of all wind-ups in Australia and twice as many as in July 2014—why has the government dropped the threshold level for wind-ups from $300,000 to $30,000? Does the government really support small business? Why not adopt a chapter 11 system to keep Australians employed and businesses going?

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for his question. It is an issue that has been hotly discussed over the years—whether Australia goes down the path of having a chapter 11 equivalent to the United States. I well recall this from when I was Minister for Financial Services and Regulation. In the development of CLERP, the Corporate Law Economic Reform Program, we had a good look at it around 1998-99. One of the reasons we did not go down that path was that in Australia there are a number of options available such as the appointment of administrators—obviously the court can appoint administrators and so on. The most important thing we can do in relation to this is keep the door open for positive changes that will help small businesses in particular, as the honourable member said, to basically work their way out of difficulties should the opportunity arise and, importantly, not in any way create credit problems for banks that are primarily the lenders to those small businesses.

What we have seen over recent times—in fact, the last decade—is that a larger number of small businesses are using their homes as equity and security for credit. That has an upside and a downside. Obviously, there is a very significant cost to the individual and their family if the business fails. In relation to where there is unsecured lending to small business, the banks obviously charge much higher interest rates. We have commissioned a productivity report into this. The draft report from the Productivity Commission has been made available. That addresses a number of those issues. The government has not provided a final response yet.

But I would just say this: whenever you make credit more affordable, more accessible, you should only do so where you are sure that credit risk is preserved. There is a danger that it can undermine the quality of the risk book in financial institutions and, if you make it harder for the lenders to recover the money that is owed to them, make lending to small business far more expensive. We do not want any unintended consequences associated with any of the decisions. That is why the government is, in a measured way, considering the Productivity Commission report.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

) ( ): My question is to the Minister for Small Business. Will the minister inform the House how cutting taxes for small business will help grow jobs and the economy? What has been the response from the small business community to the government's budget?

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

Thank you to the member for Lindsay. She is a product of a family enterprise that has been an institution in Penrith. She has been a great supporter of small business, and I thank those members opposite that are clearly great supporters of mine. Thank you for that.

The response to the budget has been completely overwhelming and positive for the 10,222 businesses in Lindsay. I have not met them all but I have met many on my visits to Penrith and with the member for Lindsay. The most recent was when we joined dozens of local small businesses at The Creative Fringe smart hub and Debbie O'Connor. What a great story! A home based business that Debbie ran, it went well. She is now hosting not only her own business at that shared enterprise centre but many other start-ups, many other businesses in a growth phase, helping men and women of enterprise to start and launch their business. And isn't it great that, today, more women are starting small businesses than men.

That is why the jobs and small business package is historic. It is a game changer. It is the largest and most supportive of its kind in this nation's history. Quite understandably the response has been extremely positive. And why wouldn't it be, with the lowest small business company tax rate in almost 50 years. That is a great achievement. We have seen 1.7 million unincorporated small businesses not overlooked by this government, not forgotten like the opposition has done. We have made sure they also get a proportionate and commensurate tax discount of five per cent up to $1,000. And who hasn't heard about the positive response to the instant asset write-off. Up to $20,000 for any business asset bought by a small business is able to be immediately depreciated.

Some examples were shared with the member for Lindsay and I when we were there at The Creative Fringe. Freelance photographer Katrina James was there and shared her positivity about it. She said: 'These reforms are fantastic. As a photographer working in the digital age, my gear is outdated far before it is depreciated. This will really help.' Jo Dickens, from Kingswood Florist, said: 'The tax changes are fabulous for small business. The timing of the depreciation really makes a difference.'

As the Prime Minister shared, these measures have now passed this House. And isn't that terrific. I have spoken to the Manager of Government Business in the Senate—

Mr Bowen interjecting—

Don't you get excited, member for McMahon. I remember your 46 days as the small business minister.

Mr Bowen interjecting—

That was two votes, on your average; you had one every 23 days. That measure has now gone to the Senate. The Manager of Government Business in the Senate has assured me it is the No. 1 government business item when the Senate reconvenes. What we have is an enduring focus from this side of the House, from men and women who have grown up with small business running through their veins. What a great week for small business and what a great government for small business the Abbott coalition is.