Mr BARTLETT —My question is addressed to the Treasurer. Can the Treasurer advise the House of the steps that the government is taking to help business prepare for the new tax system? In particular, can the Treasurer detail what is being done to assist small and medium sized businesses?

Mr COSTELLO (Treasurer) —I thank the honourable member for Macquarie for his question because, as he knows, Australia is building up to the introduction of a new tax system on 1 July 2000. It will be a new tax system which will sweep away the old Labor wholesale sales taxes and which will provide large income tax cuts, new Commonwealth-state relations and new family allowance. In implementing this scheme, the government has set up an advisory board called the New Tax System Advisory Board. It is chaired by Chris Jordan, a well-known accountant of KPMG, and private sector representatives make up the board. It is going to ensure that business is fully informed about the importance of the new tax system. In fact, the board has already released its first booklet for Australian business, called The New Tax System: here is how it will affect your business .

In addition to that, a GST Start-Up Assistance Office has been established to disburse $500 million in assistance to small and medium sized businesses, charities and educational bodies. It will begin disbursing up to $130 million immediately to key industry and professional associations to deliver information and assistance to their members. It will also be administering a train the trainer program, which will allocate $7 million to increase the number of people able to train others in the implementation of GST. In addition to the $500 million of start-up assistance, late last week the government announced new taxation arrangements for small and medium sized businesses, which were very warmly received by small and medium sized businesses. The government's announcement was that small and medium sized businesses—those with a turnover of not more than $10 million—will, under new legislation, be able to get immediate deductibility of the following:

Expenditure incurred on acquiring new plant or new software . . . associated with gearing-up for the GST, provided the expenditure is occurred before 1 July 2000.

That is immediate expensing in relation to plant and software for small and medium sized businesses. It is expected that the tax deductibility of that decision will deplete the revenue by about $175 million in 2000-01; that is, provide an additional extra tax help of $175 million to small and medium sized businesses. In addition to that, the Australian Taxation Office has announced that businesses with an annual turnover greater than $500,000 who already lodge income tax returns on a cash basis will be able to account on a cash basis for GST and there will be no need to separately seek permission to do that. In relation to businesses of $500,000 or less, they are already able to account for GST on a cash basis if they choose.

Mr Speaker, for small businesses there are now direct tax incentives to go out and buy the new plant or new software required to gear up for GST. Provided they do it by 1 July 2000, it will be totally tax deductible; another $175 million to the small and medium sized businesses of Australia to help them gear up for a new tax system which will carry this country through the next century, promoting savings, incomes and, best of all, a stronger economy with more jobs.