Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

We never forget our roots—where we came from, what contribution we made in the community. I was out of small business. I created businesses out of nothing. I employed a lot of people and I'm very proud of my history in that area. So, whenever there's an article that starts off with small business, I'm the first one to go have a look at it, because I know there are people out there just like me that struggled just like my family did to build a business and build opportunities for all the other families I worked with. Robert Gottliebsen wrote this article on small business. He was talking about the Labor retiree tax policies.

Let's start with the collateral damage. The retiree tax levied via franking credits is aimed at about one million retirees trying to self-fund their retirement.

But collateral damage flows to the hundreds of thousands of small businesses that have been storing their tax-paid profits in their company (it's invested in stock, equipment and capital items). The entrepreneurs were planning to distribute these profits on retirement when the business is sold or closed. It was their planned pension.

They are looking after themselves.

Now their franking credits representing past tax will be lost because in retirement they have no income. Not surprisingly their anger is now "white hot" and it is compounded because a proposed taxing measure has reduced the value of their business and that of many of their friends' businesses. And the word is spreading via the barbecues.

The ALP saw there was an opportunity to tax rich families whose affairs were organised in trusts, via a 30 per cent tax of the predistribution profits. Those small businesses that are not organised as companies often use trusts, so this represents a significant tax hike on their business. They are only now just starting to understand that in this area they are set to become the collateral damage.

There's a further impost. These small businesses, he says:

… work long hours to lift the value of their business. They may not always achieve their aim, but they dream of selling at a profit. Now the ALP plans to hike the tax on their dreamt-of profit. More anger.

For many small businesses the residential home is their capital and the acceleration of the dwelling value falls that will come via the ALP negative gearing policy represents more collateral damage.

…   …   …

Small business is just starting to grasp the adverse implications of these policies to the way they run their business. Taken together, that's an enormous amount of collateral damage …

The last thing a small business needs is collateral damage. I know that, in your electorate of Page, Deputy Speaker Hogan, and in my electorate of McMillan-Monash our biggest employment driver is entrepreneurial small businesses that have created some of the most innovative businesses in Australia. It doesn't matter whether it's in the timber industry, ideas around internet technology, technology in general or the changes we might make to the way we use brown coal. All of these things add up to jobs, jobs and more jobs.

Now take the pristine areas that go around the Western Port Bay from Tooradin to Philip Island. Tourism is extremely important to us, and the number of businesses that spring off the millions of tourists that come down to Phillip Island in one year, the growth I'm seeing around those small businesses and the entrepreneurs doing amazing things—you know, the people I represent are the window cleaners, the lawn mowers, the tradies and Matt down the street, who's renovating the property on the foreshore. I've seen the work he's been doing and watching what's going on there. They are all small businesses and they are going to be under attack. For the people listening to this debate: all of those businesses are going to be under attack in their future from the ALP policies that will indirectly affect them. These are unintended consequences by government that have a slingback that affects, in this particular case, small and medium-sized business.

At all times there should be an overlay. How will this affect a small business? This was just meant to affect a few. In one case, this franking credits exercise is going to really damage the income of a retired nun who had very little income. She said to me, 'Look, it just gives me a little bit more so I can buy a present for the grandchildren and so I can do some reasonable things.' A retired nun! These people have entered into arrangements and agreements on behalf of her and her family so, importantly, it's affecting real people with real lives. It's a change that we should not make. Small business and families should not trust the ALP, who are going to be putting their hands in your pocket.