Senator SANDY MACDONALD —My question is directed to the Assistant Treasurer. Minister, I refer to the announcement by the Treasurer yesterday that the government will remove the `like kind' business test for the capital gains tax rollover relief measure available to small business when selling as sets. Could the minister explain the benefit to small business that the government's CGT reforms will bring? Could the minister also please outline the reaction from the small business community to this very worthwhile initiative?

Senator KEMP —Thank you for that important question and the concern that it reflects on this side of the chamber for small business and the need to encourage small business. The changes announced by the Treasurer yesterday prove yet again that this government delivers for small business. We have delivered on the election promise on the CGT reform for small business 110 per cent.

This government's CGT rollover relief will provide a very substantial boost to small business, encouraging further expansion and employment in this sector of the economy. This extension of this measure will provide an additional $50 million to small business in 1998-99 on top of the $150 million announced in the 1996-97 budget.

The government views this as an investment decision. Small business, as we have always argued, is a good investment for the Australian economy. It is an investment that Labor, through their economic mismanagement, high interest rate policies and general neglect, managed to considerably run down.

Small business knows that, unlike Labor, the coalition understand the concerns of the small business sector and are willing to listen and, most importantly, to deliver on our promises. The response from small business to our announcement speaks for itself. Robert Bastian, the Chief Executive of the Council of Small Business Organisations of Australia, is reported in today's Financial Review as saying:

It is bloody fabulous, an excellent gesture for small business.

He went on to say:

The recognition of this concern of the business community gives a psychological lift which far exceeds the $50 million input by the Government.

John Martin, Executive Director of the Australian Chamber of Commerce and Industry, is reported as saying:

The Government has listened to small business and this is an important initiative to make the CGT rollover provisions effective.

He went on to say:

It's an important step in increasing confidence in small business and freeing up investment.

The ACCI's chief executive, Mark Patterson, was reported as saying:

As a result of this measure small businesses will be liberated to expand and to apply entrepreneurial flair into new fields of enterprise.

Perhaps the most telling comment came from the Institute of Chartered Accountants small business spokesman, Mr Curt Rendall, who, the Financial Review notes:

said the decision highlighted the difference between the Coalition Government and its predecessor.

`These guys have a really good understanding of small business.'

Finally, the Small Business Coalition chairman, Mr Tom Muecke, said the change was further encouragement to confidence and expansion of the small business sector following the positive signals from the recommendations of the small business deregulation task force.

I think it is fair to say that the reactions to our CGT initiatives from the small business sector have been fantastic. The response, I believe, has been thoroughly deserved. It is good policy and we have delivered on our promises, as I said, 110 per cent.

Senator SANDY MACDONALD —I ask a supplementary question. Minister, is it also true that the government has decided to extend the period for reinvestment of the proceeds from the disposal of an asset to 12 months before disposal and 24 months after disposal? Do these decisions mean that the operation of the capital gains tax rollover relief measure will be much simpler for taxpayers to understand?

Senator KEMP —Yes, that is a substance of the decisions as well. It will be far, far simpler for small business to understand, and that is why it has received this very strong welcome from the small business community. When you ally this decision with the moves in interest rates and low inflation, you can see that this is a government which is on track and a government which is concerned about small business.