James Paterson (Victoria, Liberal Party) Share this | Hansard source

I'm very pleased to rise to contribute to this debate, and very enthusiastically so following on from Senator McKim, my Greens colleague from Tasmania, particularly after hearing about how passionate the Greens political party is about small business. We heard very strongly there from Senator McKim how much the Greens support small business. The Greens love small business so much that they want all businesses to become small businesses, even businesses that are currently large businesses! Of course, that's what would happen to those businesses if we implemented the Greens' policies. If we followed the Greens' economic prescriptions and applied their economic policies, those businesses which are currently large would end up become small because they would have to shrink due to the pressures of the Greens' policies on their businesses. So the Greens really do love small business; they want every business to be a small business. And I presume that they want to prevent small businesses from growing to one day becoming medium-sized businesses or—God forbid!—even a large business, employing lots of people, contributing to their community, providing services and, yes, paying tax that contributes to our wealth as a nation.

I was genuinely pleased, though, to hear Senator McKim announcing the Greens' support for this very important initiative, and, in fact, that the Greens believe that it does not go far enough and that we need an even higher threshold for small businesses in instant asset write-offs. That's a welcome initiative. I think it's probably the first time—and maybe the last time—that the Greens will outflank the coalition to the right on an economic issue and propose a larger tax cut than what we're proposing!

Senator McKim interjecting—

But, Senator McKim, it's a good positive trend; I hope it continues. I look forward to you proposing larger personal income tax cuts than the coalition and larger company tax cuts than the coalition. Of course, if you follow your own logic through to its logical extension, if a $20,000 instant asset write-off is good then a larger one would be better. Where else could we apply this logic? If a cut to personal income tax at a certain level is good, then a larger one would be better. And if a cut to company tax would be good then, presumably, a larger one would be better. Senator McKim said himself that it would encourage businesses to invest more, to grow more and to employ more people. I like this line of thinking from the Greens.

I have to commend, in all sincerity and genuineness, Senator McKim's more thoughtful contribution to this debate than other senators' contributions to this debate. I disagree with only one thing in particular that Senator McKim said, which was to commend Senator Cameron on his eloquent contribution. I think that was unfair and unjust praise. Basically, in Senator Cameron's 20-minute rambling contribution to this debate we had 18 minutes of political abuse that ranged across leadership changes, the 2014 budget and Senator Cameron's observations on various political machinations. There was very little actually about the bill before us here today. But it is true that buried deep inside Senator Cameron's speech was also another piece of good news, and that was that the Labor Party will be supporting this piece of legislation. The Labor Party will be supporting our initiative to lower taxes for small businesses, and that is a very welcome thing. I thank Senator Cameron for that.

I wonder why it was, though, that Senator Cameron spent so much time of his speech making observations about leadership changes. It certainly couldn't be because the Labor Party is immune from such things. It certainly couldn't be because he hadn't participated in any of those previously—we know well that he did and we know well that they have. I wonder why he focused so much on a budget now delivered four years ago?

Perhaps it's because the Labor Party's own record in the area of small business taxation is not so much to write home about and not so much to boast about. Earlier this year, we had the embarrassing situation where the opposition leader, Mr Shorten, appeared to announce the Labor Party's policy on small business accidentally in response to a question from a journalist that he was door-stopped by while walking out of a breakfast function. He then had to scramble over several days after his poor colleagues were left out there hanging agonisingly in radio and television interviews. There was a particularly memorable one from a Tasmanian colleague of Senator Cameron that doesn't bear repeating in this chamber because it was painful to listen to. Finally, Bill Shorten was dragged back, kicking and screaming, to a more sensible small business taxation policy.

But I have to say that if I were a small business owner-operator in this country, I would not be filled with confidence in Bill Shorten's tax policy. Who knows what it will be if he is lucky enough to win the next election? Who knows what it will be by the time of the next election because of the utter chaos we have seen in that policy area from the opposition?

Turning now to the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 before us. This bill goes to the core of the Morrison government's and the Liberal Party's philosophical agenda. We back small business because small businesspeople are having a go, and when they have a go it benefits everyone: it benefits their customers, it benefits their workers and it benefits their local communities. This bill backs small business. It's part of our plan for a stronger economy.

As announced in the 2018-19 budget, this bill extends the $20,000 instant asset write-off by a further 12 months to 30 June 2019 for businesses with an aggregated annual turnover of less than $10 million. What this will do is improve cash flow for small business, providing a boost to small business activity and investment for a further year. Around 3.3 million incorporated and unincorporated businesses with an aggregated annual turnover of less than $10 million will be eligible to access the $20,000 instant asset write-off. Small-business stakeholders have strongly supported the continuation of this measure, and we've heard that loud and clear from all the peak business lobby groups, small, medium and large.

In extending the $20,000 threshold for a further year, the government has sought to strike a balance between, on the one hand, helping small business's cash flow and investment, and, on the other hand, the revenue impact on the budget. As much as we'd like to follow Senator McKim's advice that this should be increased and kept in perpetuity, it would have some budget implications, which I'm sure would have to be addressed in other ways.

The immediate deductibility threshold and the balance at which the pool can be immediately deducted is normally only $1,000. This is obviously a policy that the government has had in place for a number of years. There's some interesting data from the ATO tax return data from 2015-16 that shows that over 300,000 small Australian businesses took advantage of the $20,000 instant asset write-off in the 2015-16 financial year. Compared to 2014-15, in 2015-16, the number of businesses that claimed the instant asset write-off increased by around 60,000, and the average amount claimed increased from an average of $4,100 per small business to about $9,000 per small business.

So the evidence is in. This is a policy that works. This is a policy that encourages investment. We've seen that in the booming small business sector in this country. We've seen that in the very positive economic growth figures announced last week by the Treasurer. We've seen that in the records jobs growth, with over a million new jobs created in the last five years. We've seen that with the strong and buoyant Australian economy that the Morrison government wants to strengthen further with this and other initiatives.

I only hope that the strong multipartisan support that we've seen in the chamber today for this initiative to back small business flows over into other areas of taxation policy to support small business, because, as we all know, it is small business that employs the lion's share of the Australian workforce. Small businesses are often largely mums and dads having a go, taking a risk, employing people, supporting their local community by providing services and jobs and supporting their local community directly with sponsorship and other philanthropy. It is these people who deserve our support and encouragement. We want to see more of them, and we, unlike the Greens, want to see, one day, these businesses grow into medium and even large-sized businesses, so that they can employ more people and contribute even more to our local communities.