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Tuesday, 11 September 2018
Page: 76


Senator McKIM (Tasmania) (18:04): I rise to speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. As a Tasmanian senator, I want to give a shout-out to all of the small businesses in Tasmania. We're not a head-office economy down in Tasmania. Our economy is driven by the small-business sector right across a range of areas. Small business in Tasmania has supported a number of Greens initiatives over the years, including when we ultimately successfully led the charge to see an effects test pass through both houses of this parliament. The Liberal Party, who hold themselves out as the champions of small business, had to be dragged kicking and screaming by the Greens and, interestingly, the National Party to put in place an effects test which would actually go some way towards levelling the playing field in regard to matters between big business and small business.

It's also gratifying to know that the small business community supports the Greens' intention to legislate to do something to require big business and government to more promptly pay their invoices owed to small business. It might interest senators to know that, in fact, Australia and—would you believe!—Mexico are the two countries in the world where the length of time it takes big business to pay invoices to small business is the highest. Big businesses and governments are effectively using small business as a bank giving interest-free loans by refusing to pay on reasonable terms and within a reasonable time frame, in some cases extending their default time frame for paying invoices for small businesses up to and beyond 90 days. That is unconscionable, and something needs to be done about it. That's what the Greens intend to do.

In 2014, when the Abbott-Turnbull government slashed the instant asset write-off threshold from $6,500 to $1,000, the Australian Greens opposed that cut. We backed in the Henry tax review recommendation that the $6,500 threshold be increased, not decreased as it was by the Liberal government at the time. Remember that this is the Liberal Party that likes to paint itself as the champion of small business, when in fact what we all know and what any reasonable assessment of reality would lead us to conclude is that actually the Liberal Party is the party of big business. It is the party of the corporates. It is the party of privatising public assets and allowing the profits to be privatised but the losses and the impacts to be socialised. And, of course, it's people and the environment that continually miss out when that happens.

So, because we back small business, we supported the government's backflip the following year after the 2014 decision to slash the instant asset write-off threshold from $6,500 to $1,000. The following year the government backflipped and raised the threshold to $20,000. That's why we will be supporting in this place today extending this scheme for another 12 months. But, as Senator Cameron has just finished so eloquently pointing out to this chamber, doing this on a rolling 12-month basis just so you can create for yourself a few positive headlines in the media and a round of applause from the small-business community is not good enough. The government ought to make this permanent. In fact, there are very strong arguments for the threshold to be raised above $20,000.

This form of accelerated depreciation allows you to reduce your taxable income by $20,000 under certain circumstances, resulting in a cash flow benefit relative to the rate you've been taxed at. That means more money for small business to reinvest in more equipment or to employ more staff. I will place on the record that I have worked in many small businesses over the years and even had one myself for a while, as a sole trader, so I know what it's like to work in and own and operate a small business. It is often hard yards. There are often people working incredibly long days, weeks, months and years to keep their businesses afloat, and often the owners of those small businesses do not pay themselves anywhere near a reasonable wage or salary because they would prefer to see the money that would come to them actually reinvested back into their businesses.

The Greens have a view that instant asset write-offs are an incentive for small businesses to reinvest money into their operations, which is good for the businesses, good for the suppliers of those businesses and ultimately good for customers and the broader economy. The Greens believe that this bill should go further than it does. Therefore, in the Committee of the Whole we will be moving an amendment designed to help small businesses cut pollution and cut their power bills.

This is about many things. It's about reducing emissions and assisting small business to play a role in the fight against the climate disruption that is happening around us as we speak. But it's also a way to help small businesses reduce their costs. We are proposing that we create a new write-off scheme, introduced with a $30,000 expenditure limit, to be used when small businesses spend capital on assets relating to clean energy or energy efficiency. Specifically, the asset would need to be used in connection with investing in energy efficiency, in reducing fossil fuel use or in fuel switching from gas to electricity. All of those three things will reduce emissions. The first, energy efficiency, will clearly deliver a further financial dividend to small business by reducing their power costs, and transitioning from gas to electricity, or reducing small business' use of fossil fuels, which is also very likely to reduce their costs. We are proposing that this be introduced in addition to the existing $20,000 tax break that was extended for another 12 months in this year's budget. Furthermore, this would be a permanent scheme, not the temporary 12-month arrangement that the government seems wedded to.

We will move this amendment in the committee stages. It is to incentivise small businesses to invest in energy efficiency, reducing use of fossil fuels, and fuel switching from gas to electricity. This is a win-win policy suggestion from the Australian Greens. It's good for the environment because it will help small businesses play a role in reducing Australia's greenhouse gas emissions, it is good for the bottom line of small businesses, which we all know are the engine room of the Australian economy. It's also worth pointing out that small businesses are a very large part of the backbone of local communities right around Australia, because not only do they provide significant regional employment in this country but they are often a sponsor who will step up and assist local sporting clubs and other local groups to thrive and prosper and in some cases even assist those sporting clubs and other groups to remain viable.

I'm not going to take from the Liberal Party that the Greens are against small business, something that I hear regularly from the Liberals. I remind people listening of the Liberal Party's track record in protecting big business by its refusal to take strong enough action to crack down on corporate tax avoidance. If that were to happen, it would allow us to force the big corporates to pay their fair share of tax and then invest that money into improving the quality of public services in this country, which the Australian Greens absolutely believe in and which we believe the majority of Australians also support.

It's important that people understand that, in fact, the Liberal Party is the party of the big corporates in this place, because they are bought, lock, stock and smoking barrel, by the tens of millions of dollars of corporate donations that they receive every year from the top end of town.

Senator Seselja interjecting

Senator McKIM: Senator Seselja can seek to interject all he likes, but we've seen the revolving door that exists when senior coalition ministers, senators and MPs have rolled out of this place after having done the bidding of the big corporates for decades in here. They, having accepted the grubby donations either on a personal level or at a party level from the big corporates, then roll straight out of this place and into the corporate boardrooms. We've seen it time after time after time. It's worth pointing out that the Labor Party's not immune to this disease either. It's a disgrace and it ought to be stopped. The Greens have a policy that it needs to stop and a plan to make sure that there is no capacity for that revolving door to continue. When you're in this place, you should be serving the people; you should not be serving the corporates as your primary aim.

We have seen time after time the corrupting influence of big money and big politics. It's part of the reason why the Liberal Party is still refusing to support a national anticorruption body. It's part of the reason why we still have massive subsidies for the fossil fuel sectors contained in every budget. It's part of the reason why we see the Liberal Party wedded to big tax breaks for the big corporates. We've got to break the nexus between big money and big politics in this country. Until we do it, our body politic will not be delivering the most optimum outcomes that it should for the Australian people and the environment. We need to see not only the handbrake pulled on the privatisation agenda but also a renationalisation of some assets that in the past have been privatised. When we've privatised many of the assets that we've seen transferred from public ownership over to the private sector in past decades, we have seen poor outcomes for the environment and poor outcomes for far too many people. Wealth inequality in this country is growing. There is too much wealth owned by too few at the top end, and not enough to be shared out amongst far too many people, many of whom are struggling and doing it tough on a day-to-day basis.

We are very happy to support this legislation. We believe that the government should actually make the $20,000 instant asset write-off permanent, as opposed to rolling it out in 12-month increments. We also believe there is a very strong argument for increasing that $20,000. It will be very interesting to see the policy positions put by all parties before the Australian people in the lead-up to the election that we will have within the next nine months or so. But we also want to create a scheme with a $30,000 expenditure limit that would incentivise small business to invest in energy efficiency; to bring emissions down; to reduce their power bills; to reduce their use of fossil fuels, which, of course, would also bring emissions down and be likely to reduce power bills; and to switch fuels from gas to electricity, which would also, in many parts of Australia, bring emissions down and be highly likely to reduce business costs and, therefore, boost the bottom lines of small businesses.