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Turnbull Interview with Aaron Young: Sky News Business Channel: 10 June 2009: Coalition's small business strategy; OZ Minerals; early election.



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Wed, 10th June 2009 TURNBULL INTERVIEW WITH AARON YOUNG (SKY NEWS BUSINESS CHANNEL) - COALITION’S SMALL BUSINESS STRATEGY, OZ MINERALS, EARLY ELECTION

The Hon Malcolm Turnbull MP Leader of the Opposition

E&OE

PRESENTER:

Mr Turnbull spoke with the Business Channel’s Aaron Young, who started by asking what’s wrong with those tax incentives.

MALCOLM TURNBULL:

Well there’s nothing wrong with it. It’s a good measure for businesses that have the cash to invest and have something they need to buy. But obviously if you’re a small business and you’re short of cash, a tax break isn’t much good to you. You’d be much better off having measures which actually put cash into the pockets of small businesses, you know, into their bank balances. So you’ll recall in the debate over the $42 billion stimulus package, we proposed as an alternative to the small business measures the Government had that there be a rebate over two years of a portion of the Superannuation Guarantee Contribution. This is the compulsory Superannuation Guarantee Contribution. So that would put money back into the pockets of small businesses, about $5 billion over two years. Now the Government rejected that and they passed their own measures eventually through the Senate, so what we’ve looked at are measures we could undertake now which would have the advantage of putting cash into the hands of small businesses but would also not impose a heavy burden, heavy cost on the Budget so our tax loss carryback is a very good example of that.

AARON YOUNG:

We’ve seen a lot of figures out there but from your perspective, the Coalition’s perspective, are we now past the worst of the downturn?

MALCOLM TURNBULL:

Well, I hope it is. I hope it is. I think the economic forecasting is probably slightly more reliable than weather forecasting. But you see, there are certainly some green shoots appearing around the world and I hope they’ll be borne out. I’m a glass half full guy naturally, so I’m always optimistic.

AARON YOUNG:

And so what would a Coalition do to actually help? You’ve come up with the tax loss carryback. What would that actually do?

MALCOLM TURNBULL:

One of the practical measures we’ve proposed which has very modest cost to the Budget is to enable businesses to carry tax losses backwards. In other words, at the moment if you have a business that has say lost $50,000 this year, you can carry that forward and offset it against future profits. So if you make $50,000 next year, you offset the loss and you don’t have any tax to pay. Why not be able to carry that loss backwards, as you can in many other countries, and recover tax you’ve paid. So you lose $50,000 this year but you made $50,000 profit last year, carry it backwards and recover the $15,000 in tax that you’ve paid. Now that’s a practical measure, has the support of COSBOA as we heard from the Chairman today, and it’s a practical measure that would put cash into the hands of small businesses. It doesn’t have a big cost to the Budget because of course the tax loss that is carried backwards cannot be carried forwards, so it’s a good practical measure and it’s one of the measures, the number of measures that we’ve proposed for small business that the Government should get behind and support.

AARON YOUNG:

I want to talk about award modernisation and industrial relations law. How will that affect what happens to small businesses? Should we be making it easier for small businesses to employ staff?

MALCOLM TURNBULL:

Well of course it does and you’ve got to make the laws supportive of employment. The award modernisation process has really run off the rails, there’s no doubt about that. Julia Gillard said it would obviously streamline awards, simplify awards and so forth, but she said it would not disadvantage employers or employees. Now clearly that promise is not being fulfilled. It’s going to put up the cost of labour in a whole range of industries and, as a result, see people laid off. So they’ve got a major problem. They’re trying to do running repairs on the go. I think they’ve got to go back to the drawing board and get it right. Look I’m not suggesting it’s a simple issue. It’s a complex issue. They’ve got to be very careful about how they go about it, particularly at a time like this.

AARON YOUNG:

An issue which is tough for a lot of governments is the topic of foreign investment. We’re now seeing that OZ Minerals has been approached by Australian investors. They’re saying they’d prefer to stick with the Chinese investment option. Where do you think the Government should go? Where do you think OZ Minerals should go and Australian companies in general? Should they look towards foreign investment over local investment if both options are available?

MALCOLM TURNBULL:

Well that’s a matter for OZ Minerals. I’m not going to give financial or corporate advice to the board of OZ Minerals, but in terms of Chinalco I gave a speech on the 1st of May in which I said that I did not believe and the Coalition did not believe that the Government should give consent under the Foreign Acquisitions and Takeovers Act to the Chinalco investment in Rio, at least on the terms that it was proposed,

because we felt it was against the national interest. You’ve got to remember that the - and we talk about Chinese companies investing in Australia, they are often - not invariably - but they are often state-owned enterprises which are effectively in fact agents, departments of the Chinese Government so there is a big question about the extent to which we want our key natural resource assets being controlled or heavily influenced by the government of another country.

AARON YOUNG:

Mr Turnbull, will the Prime Minister call an early election?

MALCOLM TURNBULL:

You should ask him that. I don’t know. Well I know what he’d like to do. It’s pretty obvious what he wants to do. He would love to go to an election before he has to deliver another Budget. So if he can find a means of going to the polls at the end of this year or early next year before May, he will and he’ll do that because he knows that at the next Budget he’s going to have to take some tough decisions and he doesn’t want to do that before an election. So his motives about an early election are very transparent.