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

Firstly, in summing up this discussion may I thank all those members who have contributed to the debate—a spectacular 31 members in this chamber, including 16 coalition MPs and 15 from the opposition. And isn't it great that those electorates represent around 300,000 small businesses that have been able to have their interests, their concerns, their aspirations, discussed in this chamber. That was a very worthwhile use of parliamentary time and a great opportunity for Australian small business men and women to know that this parliament is very focused on their interests and their ambitions and goals, and what we can do to energise enterprise and support their contribution to the economy and jobs.

Small business and primary producers make a very important contribution to the Australian economy. They test and pioneer innovative ideas and business practices which are critical to future economic growth, job prospects and improved living standards. These measures are part of a broader package to help small businesses and family enterprises to grow, as they also provide support for farmers and farm businesses and rural communities in drought affected areas across our continent. Firstly, the Tax Laws Amendment (Small Business Measures) No. 1 Bill amends the tax law to lower the company tax rate by 1.5 percentage points, to 28.5 per cent, for incorporated small businesses, potentially helping up to 780,000 small business companies to retain more earnings and improve their cash flow. This is the lowest small business company tax rate since 1967. These amendments will also enable small companies to distribute surplus franking credits accumulated in previous years, reducing the tax their owners pay when they receive dividends. The lower tax rate will apply from 1 July 2015 to incorporated small businesses.

The Tax Laws Amendment (Small Business Measures No. 2) Bill will amend the tax law to expand the accelerated depreciation provisions for small businesses. For small business this involves lifting the threshold for immediate deductibility from $1,000 to $20,000 in allowing assets above this threshold to be depreciated in the simplified pooling arrangements. These arrangements allow these more expensive assets to be depreciated at a rate of 15 per cent in the first year and 30 per cent per year thereafter. This expansion to accelerated depreciation will be available from 7.30 pm on 12 May 2015 to 30 June 2017. As 97 per cent of primary producers are small businesses these amendments will also provide a significant benefit to many, many farmers.

To provide further assistance the bill will also amend the tax law to allow primary producers to access accelerated depreciation rates on fencing, water facilities and fodder storage assets. Primary producers will be allowed to immediately claim a tax deduction for expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Expenditure on fodder storage assets such as silos and tanks used to store grain and other animal feed will be depreciated over three years.

The amendments will improve resilience for farmers facing drought, improve cashflow and reduce red tape by removing the need to track expenditure over time. The accelerated depreciation for primary producers will be available from 7.30 pm on 12 May. These are key elements of the coalition's jobs and small business package introduced by the Abbott government on budget night, and I commend these bills to the House.

Question agreed to.

Bill read a second time.