House of Representatives

Second Reading Speech

Mr MORRISON (Cook-Treasurer)

I move:

That this bill be now read a second time.

The Turnbull government is backing business with more competitive taxes to help Australian businesses invest, grow and employ more workers as well as pay them more. More than a million Australians have got a job since this government was first elected back in 2013. That is a credit to the hundreds of thousands of businesses around the country who have taken the risks, put in the effort and given an Australian the best of all opportunities, a job.

The transformation of someone being able to come off welfare and get into work is the ultimate 12-point turnaround. The opportunity to actually prevent someone from not being in a job and get them into the job: this is what is driving our economy forward; this is what is driving the nation's finances forward. It all comes down to ensuring that you back business to invest and create jobs.

This is a central plank of the strong plan for a stronger economy that was set out in this year's budget. We're delivering on that commitment. As I said, more than one million extra jobs have been created. Employment is now at a record high of over 12½ million Australians now in work. I stress: that million jobs is net-that's net additional jobs.

As we know, there has been transition and dislocation in our economy as we've come off the top of the mining investment boom. Some $80 billion stripped out of our economy over that period, yet we continue to grow and we continue to add more and more jobs-more than a million jobs-to now have 12½ million Australians employed.

We're delivering on our commitment for a stronger economy through our more competitive business taxes. The government has already legislated tax cuts for 3.3 million small and medium Australian businesses, employing 6.8 million workers, as part of our Ten Year Enterprise Tax Plan.

We have increased the unincorporated small business tax discount rate from five per cent to eight per cent (up to a cap of $1,000). This rate will increase to 16 per cent by 2026-27.

Further, by lifting the small-business entity turnover threshold from $2 million to $10 million, access has also been extended to a range of small-business tax concessions, such as the $20,000 instant asset write-off.

This movement of defining this turnover of up to $10 million is one of the biggest things, if not the biggest thing, to happen to small-business taxation in generations. And it comes from an acknowledgement and an understanding by the government about what a small business actually is. A small business has a turnover of up to $10 million, and there are actually small businesses with turnovers even above that. One of the businesses I visited just last week-I am still constantly struck by it. This is a business with a turnover of almost $50 million. It has 35 employees. It's hardly a multinational. It's a radiator business in Rockhampton.

So businesses of up to $10 million now have rightly-rightly-been defined as small businesses and are attracting the tax arrangements that have been designed to support small businesses. So we're backing those small businesses by cutting red tape through streamlining GST reporting for around 2.7 million small businesses, and we are backing small business by levelling the playing field through countering illegal phoenixing and extending unfair contract term provisions.

On the issue of illegal phoenixing, this is a significant issue. It's an issue where businesses are often forced to go bust themselves because of the improper and illegal behaviour of other businesses who don't pay their bills and try to use the system to reinvent themselves and walk away from their obligations. It's not fair, it's not right and in this budget the government has taken strong action to ensure that that practice is obliterated wherever possible.

This bill will continue the government's plan for a stronger economy so that businesses can prosper, grow and hire more Australians. The bill continues the government's strong record of supporting small business to invest and grow by extending this successful $20,000 immediate deductibility threshold for a further 12 months to 30 June 2019.

Small businesses with annual turnover of less than $10 million will be able to immediately deduct purchases of eligible assets each costing less than $20,000, which are first used or installed ready for use for another year to 30 June 2019.

Assets valued at $20,000 or more can continue to be placed into 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. The pool itself may also be immediately deducted if its value falls below $20,000 at the end of the financial year.

To facilitate access to this measure, the 'lockout rules' that stop small businesses that elect out of the simplified depreciation regime from re-entering it for five years will continue to be suspended until 30 June 2019.

This $20,000 instant asset write-off, first introduced in the 2015-16 budget, will continue to benefit small business, improving their cash flow and helping them to replace or upgrade their tools and equipment and write it off immediately.

This initiative reduces red tape for small business as they no longer need to track the annual depreciation for assets that are written off immediately, or maintain detailed records substantiating their depreciation claims.

The extension of this measure is welcomed by the small-business community all over the country.

Around 3.3 million incorporated and unincorporated businesses with aggregated turnover annually of less than $10 million will be eligible to access the $20,000 instant asset write-off.

It will continue to boost activity and investment for another year, encouraging hardworking Australian small businesses to renew their capital base so they can grow and create jobs.

Everything this government does is premised on the basis that, if you increase investment, then you increase the number of jobs there are in the economy. And, when you do that, then you're heading in the right direction. And there are more than a million jobs that have been created since the 2013 election, when we were first coming to government, that demonstrate that this plan is working, this plan is delivering, that this government's plan for a stronger economy continues to provide the direction that the country needs to ensure that the next decade we live in will be a decade of a stronger economy under these policy settings.

We have a plan for keeping business competitive to grow jobs and to support better wages.

Full details of the measure are contained in the explanatory memorandum.

I call on all members to give this measure their full support and I commend the bill to the House.

Debate adjourned.