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Bruce Billson joins Insiders -

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(generated from captions) There's not a challenge he won't take up. That's the Sunday papers and now to our studio guest and Bruce Billson as the Small Business Minister has the carriage of the major initiative in the budget designed to rev up the economy but is it all it seems? Economist, Saul Eslake, makes the obvious point if you don't make money you don't pay taxes so you don't get a tax concession. He says that applies to 63% of eligible small businesses.So much of the benefit of the cut in - or the cut in the tax rate for companies won't be of any benefit to a majority of small businesses that aren't making although
profits that can be taxed. And although the accelerated write off for purchases of assets worth less than $20,000, will stimulate more spending of that sort. The vast majority of that spend willing be on imported goods so the net impact on the Australian economy will actually be quite small. I don't think this will have any net stimulatory impact worth talking about.Bruce Billson, welcome.Thanks for having me.If Saul Eslake is right that sharply reduces the number of people who can take up your stimulus measure?I saw that article that Saul had in the far fax media and he fell in the same trap as Labor fell into. One one-third of small businesses are structured as company two thirds aren't. We've recognised that and we've put incentive for small businesses regardless of how they're structured.The two thirds who aren't companies are aren't
making profits?Two thirds who aren't companies are in a to
position to get a discount up to 5% for $1,000 cap.Provided they're making profits?Correct. That's what we're trying to do, give them encouragement, support growth and jobs in the budget and that's what the budget was about. Saul is an outrider on that.Are most making profits?In the company space the moment
about half are profitable at the moment and that's why we need to do other thing and that's why the budget was about growth and jobs. It's not just about the incentive of reduced tax on income in that package was the accelerated and instant asset write off. There was also support for the formation of businesses, funding to restore proper tax treatment of employee share schemes and even getting a crowd source equity funding framework in place. So there's many parts to this budget, all about energising enterprise because through that we'll create the economic growth, the jobs and the opportunities that our citizens want and our nation needs.Is it too early to say is there any evidence about the rate of take up?Only the field evidence. I've been travelling around the country speaking first hand with small businesses and they are absolutely energised. They're very positive.Are they buying?They tell me they are. It's quite catalytic and that was the purpose of it. What the budget was aiming to do was to take a small business ambition and idea and turn it into economic action and real jobs and opportunity. So the field evidence is terrific. Even the economists at our banks are saying they're picking up a real lift in confidence and optimism, a real boost in activity and that was the purpose and why we've structured the package with a number of elements to give that boost that the economy is looking for.What are they buying?I've heard a of things. Everything from a dry cleaner who is wanting to buy a new piece of kit so when an article is finished, a text message will be sent immediately to the clients. I've seen restaurateurs talking about catching a new market which is based on these television cooking shows where everyone wants to be a legend in the kitchen and how they're going to extend their business to deliver many of the ingredients to do that. Even cafes that catch commuter traffic in the morning, if you've only got one coffee machine there's a lot of train and tram and commuter traffic they can't serve and they've said they're going to buy a second coffee machine.A lot of stuff might be imported goods and the retailers benefit but does the economy more widely benefit from that?I think Saul was looking hard to find something not positive to say. Some of that equipment will be imported, of course, but much of it won't be. In terms of what a trades person needs new kit, in capacity, new opportunities to delight customers, grow their business, employ more people and bearing in mind where we start from, Barrie, the previous Rudd-Gillard-Rudd Government saw 519,000 jobs lost in small business and at the end of that 6 years there were fewer small businesses employing people than when the Howard Government left office. We've got to turn that around, put momentum behind our enterprising men and women and that's exactly what the package does.How much money do they actually get back though? For example, if you buy a ute, $19,000, how much of that money can the small business person expect to get back?What happens is those purchases, and it can be any number of purchases up to $20,000, and that's something we also need to emphasise. I might be a ute, mite might be a new compressor system or other equipment that the painter might use, for instance, as many times as you need each and every one under $20,000. That amount is then treated as an expense in the year that equipment is purchased and takes that amount off the income that the business has recorded and therefore reduces figure?
the tax.So ballpark what figure? What do they get back out of 189,000?Out of $19,000 , if you're a company, a small business company you will expect 28.5% benefit out of that expenditure. If you're a sole trader and in some of the higher tax brackets it could be nearly half. It's not a grant, it's not a gift. You need to earn the money and this is what small business people understand, and I found I've spent a lot of time educating journalists about what this is like in entrepreneur land and explaining it's not a grant, it's not a gift, you can't just decide I'm a small business tomorrow, you need to be actively trading, generating an income and that expenditure on assets that adds to the productive capacity and the income earning potential of that business you can treat that as an expense in the year have
you purchased it rather than have it depreciate over a number of years.In an area the
where you're not so Jen Rus in the budget on the PPL, are you comfortable with a situation where people are now eligible for just $11,500 over 18 weeks?Are you asking me what I'm comfortable with now or what our ambition was?Are you comfortable with this?You knew what our ambition was -Ambitions count for nothing.That's right, we've had to recalibrate. Election mandates appear not to account for anything either. We had to recognise that our plan, which would have seen a person working in a small business, getting the kind of benefits someone working in a big corporate or a government department would get. We wanted to make sure that support was there and consistent across the economy.So you've moved to a position where you're dealing with
uncomfortable with it?We're dealing with a position where there is Quon - consistency of support of a family with a young child, where a mum in a public sector role or a big corporate gets compared to the support available if you're working in a small business. We've now got consig cystency around that. You know we wanted to go further but we couldn't recalibrate
deliver that. We've had to recalibrate and see what we can do to achieve a fair and equitable outcome and that's what we've done.On superannuation do you think it was sense b to rule out any adverse concessions to superannuation in the future given this is a growing problem?You're sightly verbaling the PM. You said we wouldn't be changing anything in this term of office.No, no, he said into the future there have
will be no adverse changes -We have no proposition on the table.I'm not verbaling the PM. He said he would make no adverse changes into the future.What we've said is there's been too many moving parts in this space. Remember even the previous Labor Government thought there were too many moving parts and leading up to the election of Labor it was no changes, not a jot, not a tiddle and then there were changes everywhere. Superannuation is a long-term investment preparing for retirement incomes. You can't keep chopping apd changing and you can't treat superannuation savings as an ATM to prop up a bad budget position and that's what Labor's proposed.It might come back to haunt you.Well, if you're saying to me solid ground and certainty around people's longer term retirement income is something that haunts us, I'm prepared to be spooked but we think certain consistency and stability is important to encourage people to put some of their own savings in to make sure they've got adequacy in their retirement and too many moving parts is an enormous dis incentive for people to do that.Ireland voted overnight.To be sure.2-1, 2-1 in favour of gay marriage. Do you suspect that there might be changing attitudes not just around the world now but in this country as wellwell I saw many Irish eyes smiling in the coverage from this morning and that voluntary vote energised the yes campaign and you've captured the results. I think it's an ongoing discussion. It is very profoundly important to some. I love the fact that people can love whoever they want. That's fine by me.The issue around the technicalities of how you characterise that relationship that seems to be in some people's eyes less important than the quality of the relationship, less important perhaps than the opportunity to pledge commitment to a life partner before friends and family.And that's changes as well.This is the thing, you would have known, I've said there should have a committed life partnership for same-sex couples where they can pledge their lifetime commitment to each other before family and friends and have it recognised that way. I also know there's people
very strong opinions about people who see marriage as a proper noun meaning something quite specific of the type of relationships.Are you a no or maybe?I don't think we should use one word to cover all kinds of relationships where people feel strongly about the description it's communicating.So that's a no?I've put forward the idea of a committed life partnership of achieving public recognition before family and friends, an attestation of one's commit toment a lifelong partner. That respects strong feelings on both sides of the argument. That's something we need to take account of. People feel very strongly about this in a range of ways. I think there's a way forward but polarising the discussion is unhelpful and completely ignores that should be the quality of the opportunity for people
relationship and the opportunity for people to love who they love.Thanks for coming in this