Mrs DRAPER —My question is addressed to the Treasurer. I refer to the government's proposals to reform Australia's business taxation system. Would you advise the House of the likely impact of these reforms on compliance costs for small businesses?

Mr COSTELLO (Treasurer) —I thank the honourable member for Makin for her question. The great news is that legislation will come into the parliament tomorrow to cut company taxes and capital gains taxes, including the capital gains of all of those people who, incidentally, became shareholders in the Commonwealth Bank as a result of Labor's privatisation. The good news for all of those people—who have obviously had rather large capital gains under the Labor Party's policies; I think it was $5.40 to $22—who were introduced to privatisation by the Australian Labor Party is that, if the government's legislation goes through, the capital gains tax on that increase will be halved. If the Labor Party does not support this legislation, it will be taxing all of those millions of shareholders, which it introduced to the market on very generous terms, at double the rate which they need to pay. So on this side of the House, we say that Thursday could be a great day for small business and the shareholders of Australia, if we can only get on and pass legislation to reform the business taxation system.

In addition to that, not only will small businesses get a reduction in their company rate to 34 cents in the dollar and then to 30 cents in the dollar but, if the government's legislation—which comes as part of a simplified small business taxation system—is passed, they will also be able to write off all assets of $1,000 or less and to pool and depreciate all of their assets at standard rates, and up to 75 per cent of small businesses will no longer have to do an annual stocktake, which will be a dramatic simplification for the small businesses of Australia.

There are also two other great benefits that will go through the parliament in this legislation, if the Labor Party can bring itself to support reform. The first benefit is that small business people when selling a business can have 50 per cent of the assets of the business taken out of capital gains tax and then pay the half rate on the remainder, which has the effect of making only 25 per cent of the small business taxable. The second benefit is that those people in small business who have held an asset for 15 years and are approaching 55 years of age can sell that asset capital gains tax free. These are great reforms—this is great simplification and this is a major improvement for the small businesses of this country.

If the opposition can support reform, this is a benefit that we can give small business—along with lower interest rates, improved indirect taxation, improved industrial relations changes, more jobs and the good business conditions that prevail for small businesses at the moment. It is going to take some leadership from the Leader of the Opposition to support reform; it is not something that he is used to. But if he can reach out and support reform, we will commend him for doing so, and I am sure that the business community of Australia would be pleased to see a change from the opposition at all costs to something that is creative for this country.