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Tuesday, 20 March 2012
Page: 2266

Small Business

Senator PRATT (Western Australia) (14:40): My question this afternoon is for Senator Lundy, the Minister representing the Minister for Small Business. Can the minister outline to the Senate the importance of small business to the Australian economy? In particular will the minister outline some of the benefits that will flow to small business from the minerals resource rent tax?

Senator LUNDY (Australian Capital TerritoryMinister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (14:40): There are more than two million small businesses in Australia. This represents almost 96 per cent of all businesses in this country. Small businesses are the backbone of our industries, employing nearly five million Australians and making up over one-third of our economy. Small business people work hard and long hours and contribute enormously to the fabric and character of our society and economy. That is why this government, the Gillard government, is supporting small business.

Last night the government delivered on a historic reform to share the benefits of the mining boom and deliver a fair return to all Australians, including small businesses, from the development of the nation's resource wealth with the passage of the MRRT. This delivers a major new tax break for Australia's 2.7 million small businesses as well as a cut to the company tax rate for those businesses, with small business getting a one-year head start. However, the Leader of the Opposition has opposed this important reform every step of the way. It is unfortunate for those senators opposite that they continue their form not to represent small business people.

This generation of Liberal and National Party senators must be embarrassed because they are the first to break with the tradition of the coalition supporting tax breaks for small business. I cannot imagine what it is like to be in their shoes in this embarrassing moment in their political careers. GovernĀ­ment senators remember the long debate and final vote on the stimulus package that guided the economy through the global financial crisis. The stimulus at that time was designed to support business and keep apprentices and tradespeople in work while building roads, social housing and school infrastructure, and it did just that. It kept people in work. And yet those senators opposite also voted against that.

Senator PRATT (Western Australia) (14:42): Mr President, I ask a supplementary question. Given the importance of small business to our economy and the hard work that small business people put every day into their businesses, can the minister please outline to the Senate the number of small businesses that could benefit from the tax breaks across various states and territories?

Senator LUNDY (Australian Capital TerritoryMinister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (14:42): I thank Senator Pratt for the supplementary question. The minerals resource rent tax, which will help spread the benefits of the mining boom to all Australians and strengthen our whole economy, includes the announcement that the write-off threshold for assets will increase to $6,500 from 1 July this year. That is, if a small business buys an asset for $6,500, it means a $6,500 tax deduction, and this instant 100 per cent depreciation will be a boon for so many small businesses. In fact, in New South Wales there are 889,000 small businesses. In Victoria there are 712,000 small businesses. In Queensland there are 562,000 small businesses. In South Australia there are 200,000 small businesses. In WA there are 274,000 small businesses that will benefit from this. Tasmania has 52,000. The Northern Territory has 16,000. In my own territory, the ACT, there are 34,000. (Time expired)

Senator PRATT (Western Australia) (14:44): Mr President, I ask a further supplementary question. Can the minister update the Senate on other measures that the government has in place to support small business people? Can the minister also outline any alternative views to small business support and economic management?

Senator LUNDY (Australian Capital TerritoryMinister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (14:44): I thank Senator Pratt for this final supplementary question. We also know that returning the budget to surplus is important for the economy in which small businesses trade. Yesterday, on ABC News Breakfast Senator Sinodinos stated the obvious on the coalition's ever-changing budget position on a surplus when he said, 'Look, I've no doubt that there's been a bit of untidiness in this area.' That is an understatement. In contrast, we have a commitment to return the budget to surplus in 2012-13 ahead of all advanced major economies.

In addition, from 2012-13 small businesses will also be able to write off the first $5,000 of the purchase of a motor vehicle including utes and vans. We are implementing an accelerated and simplified depreciation for business assets. As I noted last week, the 2.7 million small businesses will have a direct voice to the Gillard government through the first-ever small business— (Time expired)