Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked by Opposition senators today.

Well, I listened with interest to the answers to the questions from coalition senators. I think the one thing that the government failed to address in all of the questions was that was that this is the highest taxing government in Australia's history. This government wants us to believe that taxing shares, taxing small businesses and taxing ETFs is somehow going to make housing more affordable. What is a little bit more egregious than that in itself is that they want to take away tax concessions from young Australians who are using those other avenues to build wealth so they can enter the housing market. They're taking those avenues away even though, historically, generations before them have been able to use those levers. This government is calling that intergenerational equity. It is a total falsity. It is a total lie. Nobody believes it.

They couldn't answer questions around which small businesses would be eligible for the proposed carve-outs. They don't know. They have no answers for that. This is the problem with this government: they go ahead, they do things, they don't think about it—poorly executed, poorly drafted legislation—and then it needs to be cleaned up later. Nobody knows who's going to be eligible and who is not. What will an innovative small business be? We had questions around a cafe and a hairdresser effectively scoffed by the government. They're legitimate questions; they're real questions. Who determines what innovation is? Is it a departmental official? Do they determine it? Is it subjective? Is it what they think is innovative, or is it something that somebody else will determine? They're reasonable questions.

What it does create is uncertainty. When there is uncertainty, people won't invest. When there is uncertainty, people move somewhere else where there is no uncertainty. Based on this legislation, we will have some of the highest CGT in the world. Communist China has a flat rate of 20 per cent CGT. Australians who want to innovate and create new businesses, to have a shot at making something special are probably going to go: 'We might go to New Zealand instead. That's easier.'

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

Singapore—zero per cent.

Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) | Link to this | Hansard source

'We might go to Singapore instead. That's easier—zero per cent.' Why wouldn't they do that when there are risks and uncertainty here. When Senator Hume asked that question, Senator Wong came back and said, 'There's chaos and uncertainty across the other side.' Respectfully, the Albanese Labor government is in government. It's up to them to solve these issues, and it's up to them to present to this chamber legislation that will actually work for Australians. This won't. This legislation will damage this country.

The CGT and the negative gearing, as put forward by this government, are totally damaging. In the same way, they have failed to address Australia's housing shortages. The fact is that they won't acknowledge that their own changes in the budget will actually see 30,000 to 35,000 fewer homes constructed. How do you address that? How do you answer that question without acknowledging and understanding that the problem you're meant to be solving is being made worse. That is clearly stated in your own budget papers. Something needs to change.

Lisa Darmanin (Victoria, Australian Labor Party) | Link to this | Hansard source

On this side we are big supporters of small business and innovation. This budget was all about backing small business to invest and to grow. I want to talk a little bit, again, about the changes to the small business concession so that we can provide clarity and certainty for small businesses and others. As Senator Kovacic just said, they need certainty. Well, let's be really clear: the government is extending the eligibility of the 50 per cent active asset reduction to more businesses by increasing the turnover threshold from $2 million to $10 million. This brings the eligibility for this concession into line with the turnover threshold for the instant asset write-off. This will mean that all 2.7 million active small businesses and 98 per cent of active businesses will be eligible for a 50 per cent CGT discount on active business assets, and that's on top of the discount for inflation, where eligible, once these reforms are in place.

The government, as has been mentioned, has also released the consultation paper on the design of a 50 per cent CGT discount for early stage investors, including founders and employee share scheme participants of innovative startup businesses. Final details will be implemented in a later tranche of tax reform legislation. Importantly, this will be released following consultation.

These measures, of course, build on the existing significant measures to support small business risk taking and investment in the budget, including the two-year loss carry-back, loss refundability for startups, expanded venture capital incentives and making the $20,000 instant asset write-off permanent. The additional support for small business has an indicative cost of $300 million over the forward estimates and brings the total new tax measures to support businesses in the tax reform package to over $3.8 billion. This $3.8 billion also includes making the $20,000 instant asset write-off permanent for small businesses; a two-year loss carry-back for companies with a turnover of up to $1 billion; supporting cash flows through disruption; and incentivising sensible risk taking. Remember that, without this measure, the asset threshold would have reverted to $1,000 in just a week or so, on 1 July this year. There will be loss refundability to help startups to grow in their first two years, and we are also expanding the tax incentives for venture capital to help unlock more investment in young and expanding businesses.

Of course, running through all of these things to provide business certainty is one thing, but I think the actual perspective about what small-business owners and startup innovators think about this is best heard in their own words. Last week we heard from Mr David Turner, a small-business owner and a startup founder who advises Australian startups and small businesses as a lawyer. In the inquiry last week, evidence that he submitted said:

… I commend measures such as the proposed loss refundability scheme, the loss carry-back scheme, the R&D tax incentive, and the permanent instant asset write-off, each of which offer cash flow support to start-ups and small businesses … tax system features such as up-front supports for new ventures may be more effective incentives than relief that materialises when a business is sold.

Very quickly, I note that, on this question about whether Australian innovation will go overseas, Mr Turner also said:

… for many founders, there are natural constraints to their ability to pick up their lives and move to another jurisdiction—not only personal and family ones but also professional ones. They may be in a position to commence a business in Australia because of their professional network, because of their knowledge of the market or because of their connections to customers.

(Time expired)

Richard Colbeck (Tasmania, Liberal Party) | Link to this | Hansard source

It's a bit of a misnomer to refer to this part of today's proceedings as taking note of answers, because I think the only thing that we got was non-answers to the questions asked by the coalition today. In circumstances where the budget is now in a complete shambles, the government are doing backflips to try and resolve the problems that they have themselves created by not properly designing the reforms that they wanted to bring in in the first place, which is not the first time we've seen Labor do this. Now they're trying to scramble to get things back in order and to try and recover some ground from what has been a terribly received budget and, quite frankly, a complete shambles of a budget.

I'm going to do something that's very unusual for someone from the coalition, and that's to quote the ABC, which said in an article last Friday:

Business has labelled Labor's budget tax overhaul a "freak show", saying its proposed changes are like an American celebrity who has had too much plastic surgery.

If the ABC is saying this about Labor's budget, what is the reality? We've seen this before. The article continues:

Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar told the ABC's Insiders Podcast the changes were starting to get ugly.

…   …   …

Australian Industry Group CEO Innes Willox said the changes to Labor's cornerstone tax policy added complexity, uncertainty and retrospectivity into the tax system that would harm business.

We all know—and Labor knows this too—that, if you tax something more, you don't get more of it. I sat in this chamber during the last period when Labor were in government, when they started hiking up the taxation on tobacco. Now how's that going? That's a complete shambles. There's another thing that the Labor Party has lost control of completely. There was Kevin Rudd's war on alcopops, where they ratcheted up the tax on alcopops with the express intention of having less of them. And here we are—increasing tax and saying that we're going to get more housing when the budget papers say we're going to get less. That's on top of the fact that the Labor Party, despite the fact that they say that they're building more houses, are building 30,000 houses less per year—170,000 houses a year are being built in this country under Labor. Under the coalition, it was 200,000 houses per year. How can they stand there with a straight face and say we're getting more houses when the reality is we are getting less? That is how dishonest this government is.

This is a government that went to the election that said it would not make changes to capital gains tax—

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

Fifty times.

Richard Colbeck (Tasmania, Liberal Party) | Link to this | Hansard source

Thank you, Senator Scarr. Fifty times they said they would not make changes to capital gains tax. They said they would not make changes to other taxes, and then they did that in the budget. This is a dishonest government. You cannot trust a single thing this government say, whether it's defending the changes that they're making now or anything else they say, because we know that, when they want your vote, they'll say what they think you want to hear, and then, when they get back into government, as they've done on two occasions now, they do the exact opposite. This is a dishonest government, and they deserve the ignominy that's being thrust upon them by the Australian people.(Time expired)

Josh Dolega (Tasmania, Australian Labor Party) | Link to this | Hansard source

I too rise to take note of answers to questions asked by the coalition. I am extremely proud of the budget that this government has delivered and of the changes and the theme of delivering fairness for working Australians, for young people and for those who would strive to own a home. Our changes to the capital gains tax and negative gearing for houses will and are already creating a fair go for people to get into a house. We've already seen great stories in the weekend newspapers, including Domain, where young people and couples are getting a home without competing with investors. We're already seeing a great effect that people are getting a chance to be able to live the Australian dream.

You see, for a quarter of a decade, housing has been treated as a vehicle for building wealth—houses for building wealth. To me, housing is a right. Having somewhere to live and a safe place to come home to is a fundamental right, and young people are realising it's the Liberals and the Nationals and John Howard that they have to thank for this. They really did a trick on us, and we're feeling it generations later. Those governments' decisions, not just in housing, have caused fundamental issues which this government is looking to fix. We're also restoring fairness to the way that income on investments is treated. How is it fair that the labour of working Australians, whether it be cleaners, teachers, tradies, public servants or nurses—why should their labour be taxed higher than income that is earned on investments? Our changes are going to restore fairness to the way that income is taxed.

Our budget also delivers on some of the other commitments that we've taken to the election, such as delivering on tax cuts—the tax cuts that are due to come in on 1 July. That is the next round that we've delivered. Since coming to power, the average working taxpayer is up to $2,800 better off and paying less tax than when we came into government. We're also including, in the tax system, when people go to do their tax returns at the end of the year, a $250 working Australians tax offset, and we're delivering the standard deduction of $1,000 for taxpayers, which will make a difference to people and make it easier for them to complete their tax return.

When it comes to small business, recently Prime Minister Anthony Albanese and Treasurer Jim Chalmers announced some changes to our policy, following a period of consultation with stakeholders. So we will be changing the threshold of a small business from $2 million up to $10 million. That means 2.7 million active small businesses—98 per cent of active businesses—will be eligible for concessional treatment. This is on top of the four existing CGT concessions, which means eligible small-business owners will pay reduced or no capital gains tax when it comes time to sell. I'm incredibly proud of this budget, I'm incredibly proud of the work of this caucus and I say: let's get it done.

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

Labor's budget is a tax on ambition, a tax on aspiration and a tax on success. That's the reality. It's gone down like a lead balloon in the Australian community across all demographics, from young people to retirees, and the Labor government is now in damage control. They're trying to pare back various elements of the increase in capital gains tax, trying to play favourites, and they're just digging a deeper hole. That's the reality. Labor's budget has gone down like a lead balloon in the Australian community.

Senator Hume, in her question to the government, raised the legitimate point that the government say they're going to give carve-outs for startups who use innovation—who are innovative. What business isn't innovative? What business today isn't using innovation to survive and prosper? As Senator Hume said, from the local cafe—and I want to give a shout-out to my friend Nick, who just sold his cafe in my local area, where he had to struggle every single day to be innovative so that his business prospered, providing employment to people and providing an excellent service—to your local hairdresser, they're innovative. My friend Khalid, my barber, who just got made an Australian citizen last week, is a wonderful man who, with his family, came to this country and built a business. He now employs eight people and owns the premises in which he conducts the business. He has to be innovative every single day. But Labor's now setting up this false construct that some businesses are innovative and some aren't, picking and choosing between different Australian businesses. It's not right.

As Senator Cash said, it's a question of timing. You might be innovative when you start the business, but what about when you sell it 20 years later? I want to read to you a quote from a founder of SEEK, a company that was set up in 1997. Five or half a dozen people set up that company. It's now the go-to platform for people looking for jobs. It may have been innovative in 1997, but what about in 2026, when it's got a market capitalisation north of $4 billion and 3,000 employees, including across Asia? Are they innovative now? They were certainly innovative then. This is what Mr Paul Bassat—not a politician but one of the founders of SEEK Limited, one of Australia's most successful startup companies—says in relation to the Labor government's changes to capital gains tax:

… the government is committing a big own goal that will have a significant impact on a critical sector of the economy.

He said:

I am in a range of different WhatsApp groups with Australian founders, and the overall mood is one of great disappointment and frustration

There is great disappointment and frustration amongst the people who are actually setting up these new businesses and creating wealth, prosperity and employment. That's what they think. Mr Bassat goes on:

We don't want own goals either in the World Cup or in our economy, and the government is committing a big own goal that will have a significant impact on a critical sector of the economy.

This is a founder of SEEK, now a very successful multibillion-dollar company. We don't want the next founders to go to Singapore or Canada to set up their companies; we want them to stay in Australia and create wealth and prosperity for the Australian people.

Question agreed to.