Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

The Greens strongly support the Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016. We think it is good legislation that will provide much-needed relief to small business owners to allow them to change the legal structure of their business in a way that provides flexibility and support whilst they are doing so. The current problem is that rollover relief is not available for a company or a small business that wishes or needs to restructure to become, for example a sole trader, a partnership or a trust.

This bill seeks to extend the rollover relief to include the transfer of assets from a company to a sole trader, partnership or trust, as long as it occurs on or after 1 July this year. The legislation allows businesses to defer the gains or losses that would have resulted when the assets were transferred from the old entity to the new entity. Importantly, to be eligible for the rollover, it must be a small business entity in the income year in which the transfer takes place and an entity that satisfies the maximum net asset value test at the time of the transfer.

This bill is designed, and rightfully so, to help small businesses that may have, for example, originally chosen an inappropriate structure—that is, one that does not necessarily suit the small business or the circumstances that exist. It is also designed to help small businesses whose circumstances have changed and, potentially, small businesses who may wish to keep growing and expanding and want to change the structure of their business to enable that growth and expansion. In general terms, it is aimed at restructures where ownership of the business does not change.

It is often said, because it is true, that small business is the engine room of the Australian economy. In our country right now, small business employs around 4.5 million Australians. That is almost half of the Australian workforce. Crucially, small business gives many Australians the chance to back themselves, to take risks and achieve rewards, to innovate and to test new ideas. It is absolutely crucial that our legislative framework provides flexibility for small businesses and the capacity for small businesses to compete with large corporations on a level playing field. Currently, of course, that is not the case; small businesses in Australia do not have a level playing field on which to compete with large corporations.

One of the ways that we could mitigate that situation would be to introduce an effects test, as recommended by the Harper review—one of the most comprehensive reviews of competition policy ever undertaken in this country. An effects test is something the Greens have long supported and advocated and will continue to campaign for in the lead-up to the election later this year, whenever that may be, and beyond that election, until an effects test is introduced in this country so that small businesses can compete with large corporations on a level playing field.

There are two political parties in this place that are on the record as supporting an effects test—that is, the Nationals and the Australian Greens. I should also acknowledge that Senator Xenophon supports an effects test, and there may be other Independents or crossbench members of the Senate who do, too. But, in terms of relatively large groupings of people in the parliament, it is worth pointing out that the Nationals support an effects test—and they are to be congratulated for that—as well as the Australian Greens.

We know that big corporations are currently using their massive market advantages to cut out, and in some cases crush, smaller competitors. We also know there are a huge range of stakeholders that support an effects test in this country. The National Farmers Federation is one of those stakeholders because it has seen the impact on its membership, farmers and primary producers, who too often get screwed because they do not have the protection they need in terms of their contracts with big corporations.

In Professor Harper's review, he recommended clear and, in the main, reasonable amendments that could be made to make our business environment fairer. As the ACCC have repeatedly said, current competition laws are inadequate for dealing with things like strategic land banking, retaliatory threats, capacity dumping and vexatious legal action.

In that context, it is worth members being aware that the second review of an effects test, which was announced by Treasurer Morrison late last year, is still underway but that, as part of that review, the ACCC's submission has been published. It is also worth members being aware that the ACCC say in their submission that there are many ways companies can seek to prevent their competitors from competing on their merits. That is what the Greens want to change. We want to see a level playing field so that companies can compete on their merits and so that small companies are not disadvantaged against big companies merely because of their market power or the size of the business.

The ACCC also say in their submission, referring to the Competition and Consumer Act:

… section 46 does not effectively address a range of anti-competitive conduct …

The ACCC give a number of examples of such conduct that are currently happening but that are unlikely to be deemed anticompetitive behaviour under the act. Those examples include tying up customers in long-term contracts with anticompetitive rebates; freezing out competing suppliers from retail display and demonstration opportunities; joint marketing fees, where dominant retailers ask their suppliers to pay them 20 per cent of the sales price to market those products; retaliatory threats involving businesses trying to lock out other firms from certain markets; and locking up supplies so that a firm can capture 90 per cent of the available supply in the market. Large corporations are engaging in such anticompetitive practices, but our watchdog has not been given the teeth it needs by this parliament to take on those companies through the Australian legal system. Basically, the ACCC has been rendered somewhat toothless in these areas by this parliament's refusal to introduce an effects test.

As I said, there are two parties in this place that support an effects test. There are two that currently do not: the Liberal Party and the Labor Party. The Liberal Party says it will consider its position once the Treasury review has been completed and the government and the relevant minister, the Treasurer, have had an opportunity to consider the outcomes of that review. Now, we thought it was a no-brainer once Professor Harper recommended an effects test in Australia. We certainly believe that Professor Harper's recommendation of an effects test should have been endorsed by the government in Treasurer Morrison's original response to the Harper review. If that had happened, we would now be debating an effects test and how to deliver a level playing field for all businesses in this country. It is very disappointing that we are not doing that.

I do not intend to let the Labor Party off the hook. We heard contributions yesterday from Senator Dastyari and today from Senator Cameron about the nexus between the Liberal Party and the major corporate players in this country. Those comments have merit, and they are based in truth. There is too much power wielded by big corporates in Australia. But the Labor Party itself should stand condemned for its refusal to back an effects test, which comes about because of the strident opposition to an effects test by the SDA, one of the most powerful unions inside the ALP machine in Australia today.

What we are seeing is what former minister for small business Bruce Billson infamously and correctly said about an effects test:

If there is no change then that will be a triumph of lobbying over logic. It would be a triumph of back-room political machinations over good economic policy-making for our country.

Both the Liberal Party and the Labor Party stand condemned for, as Mr Billson said, a triumph of backroom political machinations over good economic policymaking for this country. There are different backrooms, different machinations, different power cabals in those two parties, but, in effect, they are the same. As I stand here today, there is a refusal from both the Liberal Party and the ALP to back an obvious no-brainer of a reform in this country that would let small business compete on a level playing field against bigger business, big corporations and the top end of town. No-one is asking for the playing field to be tilted in favour of small business. What we are asking for is for small business to be given a chance to compete on a level playing field with the top end of town, because, currently, they are significantly disadvantaged by the fact that the playing field is tilted so strongly in favour of large corporations.

The Greens have consistently backed small business in this country, and we will proudly continue to advocate for small business in this country. We took a policy to the last election of a two per cent tax cut for small business. We acknowledge that since that election 1.5 per cent of that two per cent was delivered in the last Hockey budget. However, that still leaves an opportunity for political parties and candidates in the upcoming election to put out a strong small business policy, including potential further tax cuts for small business and also, for example, a stronger, more powerful Small Business Commissioner. An improved Small Business Commissioner would be a more effective representative for the small business community, would provide a brokerage service between small business and large business and would support and encourage research in Australian small business trends to help policymakers better understand the sector. If we legislate for a stronger, more powerful Small Business Commissioner, it would make it more difficult for that position to be abolished in the future.

This legislation is good legislation. It will help small business become more flexible. It will help small business to innovate. It will help small business to grow. It will help so many Australians achieve their dreams of setting up a small business in an area where they have expertise or an interest, where they believe they can make a contribution to our community, where they can be proactive and where they can get in and work the often horrendously long hours that small business owners work. I have been employed by small businesses and I have operated as a sole trader in the past. I know from personal experience how hard many small business owners and employees work. They do not have the economies of scale that large businesses and corporations have, so they have to multitask; they have to work long hours. You spend a lot of time away from your family and your sporting clubs or other organisations in the community that you might volunteer for.

This is why we are supporting this legislation so strongly. It will provide flexibility for small businesses who may have chosen the wrong structure to start with, whose circumstances may have changed, or who simply want to keep growing, expanding and contributing positively to our community, our economy and our society.