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Thursday, 22 June 2017
Page: 7449

Mr McCORMACK (RiverinaMinister for Small Business) (11:02): I would like to thank those members who have contributed to this debate. The measures in the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 will better align the corporate tax regime with a culture of business investment and development. Improving the tax system for businesses will allow them to grow, become more productive and create jobs.

Increasing access to company losses will encourage entrepreneurship in the Australian economy by ensuring that businesses do not face tax penalties when seeking out new opportunities. The changes improve the competitiveness of our tax system and will particularly support businesses in the start-up phase. They often incur large losses in the early years as they develop new products and processes. The amendments to the rules on using past-year losses as a current-year tax deduction will allow these businesses to seek out new injections of capital to bring innovative products to market without losing these valuable tax deductions.

The second important initiative in this bill is to amend the depreciation regime for intellectual property and other depreciable intangible assets to address tax distortions that can discourage the holding of these assets in Australia, hinder investment and reduce Australia's competitiveness as a place to do business. Currently these assets must be depreciated according to an effective tax life set by statute. This effective life can be much longer than the actual economic life of the asset, increasing the cost of holding these assets. By providing taxpayers with the choice to self-assess the effective life of these assets, the tax effective life of these assets will be better aligned with their economic life.

These amendments remove negative tax concessions for innovation—innovation we are seeking to encourage. Investment decisions will not be distorted by tax considerations, leading to better commercial decisions. I commend the bill to the House.

The SPEAKER: The original question was that this bill be now read a second time. To this the honourable member for Fenner has moved an amendment that all words after 'That' be omitted with a view to substituting other words. So the immediate question is that the amendment be agreed to.