Accelerated Depreciation For Small Business Entities Bill 2017

There are over 12,000 small businesses in my electorate of Forrest, so that is over 12,000 instances where people have literally had a go. They have invested their own money, they have taken a huge risk, they have mortgaged their house or property and are working their hearts out in their small business. The Turnbull government is backing these courageous small business people. These are the small businesses who employ almost half of our country’s workforce and pay significant tax. We know our economy grows when the small business sector is strong and doing well. We also know every small business started with someone’s idea, someone’s dream, someone’s passion—along with the sheer hard work, dedication and sleepless nights that it takes to make it all happen.

To the small businesses in my electorate of Forrest and those right around Australia: this bill, and this government, backs you. The bill amends the tax law to help small businesses invest and grow. It is a continuation of a series of measures the Turnbull government has introduced to offer genuine support for small businesses. On any day, 5.6 million Australians are at work in small businesses across the country. They are earning a wage from one of our 3.2 million small businesses. These same small businesses make up 99 per cent of all Australian businesses and annually contribute $380 billion to our national economy—that is big business from small business.

Many of these small businesses are the heart and soul of rural and regional towns and communities, and many of us on this side are small business people. My husband and I bought our small business, a dairy farm, on the day we got married. Like most small businesses, it was head down and tail up for many years. We had a massive debt, a rundown property that needed developing and a very limited income. I am sure many small businesses that may be listening to this tonight can really identify with this start in business. And that is how I know that one way the government can assist small business is to cut small business taxes and red tape and introduce the instant asset write-off measure in this bill. It will reduce the burden of tax on small businesses, directly encourage growth—you can invest in yourself—and increase their ability to employ even more Australians. As I have said repeatedly, how often it is that the small businesses in a small regional community offer young people their first job and sometimes offer older Australians their last job. They support the fire brigade, the local service clubs and the local sporting clubs, and they are always there when we need them in those small communities.

The measures in this bill are part of the 2017-18 budget. Prior to the budget, the Turnbull government achieved a significant milestone to help small businesses by reducing the company tax rate on businesses with a turnover of $10 million or less—and that is turnover, not profit. Some small businesses, in spite of that turnover, actually make relatively small profits. That is because of the nature of their business. Those businesses owners have to work overtime themselves to pay for and retain their staff. These are the same people who often work in their businesses during the day and on their businesses at night—in particular, small family businesses.

This can mean doing your accounts, BAS and ordering at night. This is exactly what happens in my own family business.

Because of the Turnbull government, the tax rate for small business is now at its lowest level in many, many decades, and small businesses have more money to invest in their business today. That change in the law also means more than 90,000 additional businesses have access to tax concessions with the redefinition of small business to those turning over the $10 million per annum. The bill continues the government’s plan to back small businesses. Whether it is the local small-business owner in Dunsborough, the mature age worker in Bunbury or the young jobseeker looking to start their career in Busselton, the bill is full of opportunity.

In the 2015-16 budget, the Turnbull government increased the small business immediate deductibility threshold from $1,000 to $20,000 from 12 May until 30 June 2017. Well, this bill extends that measure by a further 12 months. Businesses with a turnover of less than $10 million can immediately deduct purchases of eligible assets, each costing less than $20,000. And they are doing it, Mr Deputy Speaker Hogan. You have referred to it yourself. And it is welcomed by many organisations that represent small business—do not worry about those economists that you spoke about—as well as by the small- and family-business owners themselves. The Council of Small Business Australia CEO, Peter Strong, said:

For the third year in a row, Turnbull Government has demonstrated a genuine commitment to small business.

There is a big difference between talking and action, and I think we have proved it.

Any logical person knows that the best form of welfare is a job. Often that job is in small-business. I visit small businesses constantly. I recently hosted the Minister for Small Business, and we visited a number of my small businesses. The overwhelming sense we both got was that small businesses see the instant asset write-off as a genuine opportunity. Businesses like Hot Weld Fabrication in Bunbury are the types of businesses who now have access to the instant asset write-off.

A number of businesses have been nominated for the very prestigious 2017 South West Small Business Awards. It is going be held later this month in Bunbury. There are too many of these nominated businesses to mention them all, but there are a few that I would like to mention. In the industrial area of Bunbury out at Halifax, the Warehouse Cafe feeds many mouths every day from the early hours of the morning through to the afternoon. This is an excellent small business employing eight people and offering products that are renowned for being really top notch. The cafe’s service is exceptional. When you walk into the Warehouse Cafe, Barbara and her team will do everything they can to make sure that you get the food and service that you want and need. The south-west is home to many very efficient businesses across a number of different industries. In over 30 years, Southern Car Care has built a strong reputation. From window tinting to electrical goods, including cruise control and stereos, Southern Car Care even installs tinting for homes, as well. The business employs six people and offers good old-fashioned service, personalised to the customers’ needs. What a great way to go. It is another very sound south-west small business. Other finalists in the small business awards include Balingup Heights Hilltop Forest Cottages, Bartercard South West, Built Right Approvals from Busselton, Heatseal Double Glazing, who do double-glazed windows and doors, Laser Electrical in Bunbury, Rando & Associates and Salon Sugar, a beauty salon in Bunbury—I think it is a great name!

For those of us who have actually run a small business, we understand exactly how tough it can be. As I said, small-business people are time poor. Under our measures in this bill, the business does not have to keep track of the item records and can use the extra cash flow to reinvest in the business. Assets valued at $20,000 or more can continue to be placed together in the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. Once assets are placed in the pool, there is no requirement to track each item’s depreciation over the multiple income years. In practical terms, for that small business and for those people at home at night doing this work, this really seriously reduces the burden of paperwork so that they can actually get on with the next day and do what they do best—employing people and contributing to the economy.

The instant asset write-off has proven to be one of the most popular small business incentives by the Turnbull government. It encourages every one of those 3.2 million small businesses to invest in their business.

I cannot let this opportunity pass without calling out the opposition. As recently as last year the shadow Assistant Treasurer said:

… if you look at the current situation in terms of the corporate sector, you’ve got 28.5 per cent for small business and 30 per cent for big business. It makes sense to get them on the same level doesn’t it?

Very logical. The member for Lilley even spoke approvingly of our plan, saying:

Reducing company tax will create new jobs and grow the economy right around the country, to the ultimate benefit of all Australians.

The chief of hypocrisy himself, the Leader of the Opposition, said on lowering the tax on small business:

Any student of Australian business and economic history since the mid-80s knows that part of Australia’s success was derived through the reduction in the company tax rate.

The Leader of the Opposition says:

We need to be able to make life easier for Australian business, which employs two in every three Australians.

What a turnaround! Now those very same people rail against the government daily about these measures. It is blatant hypocrisy—it is breathtaking. And, it is very risky for small businesses. Labor is determined to increase taxes for those small businesses with turnovers of up to $10 million. We are about creating more jobs—that is what this government are about—and that is why we have continued to back small business in this year’s budget. Extending this instant asset write-off is a highlight in the budget for small business. Every time we walk in the door, that is a great message to deliver to a small business: ‘We are backing you. We are giving you a chance to invest in your business and your people and to continue to grow.’ That is what we are saying. Whether you are a trucking or a transport business, no matter what business you are, this government is backing you. If you are watching, we are backing small business. I am sure every time we do that we increase business confidence. As we have seen, small businesses, industry groups and business leaders right across the country have been vocal in their calls for an extension to the program—and we have responded to that. Our government is getting on with the job.

I congratulate the Minister for Small Business for also putting together what I call the small business tool kit—an invaluable resource for small businesses. I am very pleased to say that the minister responded very positively when I suggested this initiative so that small businesses are aware of the opportunities they can take advantage of. One important thing is the ability for small businesses to get online and arrange for the Australian Taxation Office to call them at a time that suits the small business. Isn’t that a fantastic thing? I’ve talked about the fact that small business people work in their businesses during the day and often on their businesses at night dealing with the paperwork and the practicalities. If you have an issue or want to call the Australian Taxation Office, they can call you when it suits you and your small business. All small businesses need to know about this. There are times when you need to ring the ATO, so get online, sign up and they will call you when it suits you.

There is no doubt on this side that small business is the engine room of our economy. Family businesses are very much a part of that, from our farmers to every form of industry that we have in this country. I encourage small business every day. I know they are taking a great risk, I know the hard work—I have lived it and still live it. I congratulate the Treasurer on bringing this measure before the House and I encourage and implore the opposition to get behind this. Who in their right mind would not want to support small business in Australia? Perhaps only the Labor Party.