Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Hansard source

I thank Senator Thistlethwaite for his question. And, no, Senator Macdonald, tax cuts. Australia's two million small businesses will benefit from a package of effective tax cuts that will improve cash flow and also reduce red-tape compliance costs.

This week the Assistant Treasurer and I released for public consultation the details of these tax changes. From the 2012-13 income year the package will allow small businesses to firstly immediately write off assets valued at under $6,500—that is for each item—and that is an increase in the write-off on those assets from $1,000. It is a very significant increase in write-off. There will be an immediate write-off of up to $5,000 for motor vehicles acquired from the 2012-13 income year, with the remainder to be written off at the rate of 15 per cent in the first year and 30 per cent in following years. There will be a write-off of other assets in a single depreciation pool at a rate of 30 per cent, after 15 per cent in the first year.

The increase in the instant asset write-off threshold from $1,000 to $6,500 is very significant. It allows for small business to claim an immediate deduction for assets costing less than $6,500, rather than having to depreciate them over time. The simplified depreciation pool arrangements will also allow small business to depreciate some assets more quickly, at a rate of 30 per cent instead of five per cent, and help reduce compliance costs. The measures will have a significant impact on improving the cash flow position of small businesses. The total cost of this assistance package in 2013-14 will be over $1 billion. It is a very, very significant improvement in the tax treatment for small business and it builds on this government's commitment to cut the company tax rate for small business from 30 per cent to 29 per cent from the 2012-13 income year. (Time expired)