I rise to speak about the omnibus tax bill, the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020—the tax announcements that were made in Tuesday night's budget. The announcements in the bill do five things. First, they bring forward the stage 2 tax cuts and the associated changes to the low- and middle-income tax offset, the LMITO. They increase the small business turnover threshold for certain concessions to $50 million. They make amendments to the research and development tax incentive. They implement the temporary loss carry-back against previous profits measure. Finally, they introduce the temporary full expensing of depreciating assets—the instant asset write-off.
There are five parts to this omnibus bill, some of which we've known about for a little while, some of which we found out about for the first time less than 48 hours ago. We should note from the outset that it is unusual to be considering and passing spending of this magnitude and changes of this magnitude with very little notice. We should note at the start of the debate that it should have been possible to pass, for example, the income tax cuts that both sides of the parliament have supported for some time. Indeed, we've been calling for them since August of last year. We could have done that to give the ATO some certainty to implement the income tax cuts. Instead, I wrote to the tax commissioner yesterday to give him a formal assurance that we would be supporting those income tax cuts. We need to get those into the pockets of Australians and into the small businesses, shops and local economies of this country as soon as possible, and there is no reason that cannot be the case.
In terms of the specifics of the measures, I will go through them in turn. The first is the bringing forward of the income tax cuts. Obviously Labor supports those. They are not a panacea. They will not do everything that we need to do in the economy in terms of boosting spending power, which was already weak, before coronavirus. But they will help. They will make a difference to the Australian workers receiving those tax cuts. We are obviously prepared to support them, including the changes for low- and middle-income earners in the LMITO. Similarly, with the increase of the threshold for small businesses, we support that going to $50 million. We don't expect that to be especially controversial. The temporary loss carry-back against previous profits provision is something that we are supportive of and we have been calling for. It's not hard to imagine the good that this measure can do. You perhaps think particularly of small businesses in Victoria, but other parts of Australia are doing it tough. I spent the first part of last week in Cairns. Far North Queensland—as the member for Moreton knows, as does the member for Griffith, having been from there, is doing it really tough. Some of those businesses will benefit from having the capacity to carry back their losses so that they can smooth out the tax liabilities over a couple of good years—and the year 2020, which none of us could possibly describe as good. So we support that, too.
There are two that we will support, but ideally we would have had a bit more time to go through them. The first is the research and development tax incentive. In this measure there's $2 billion going back into the system that those opposite were proposing to cut $1.8 billion from. At that level, we are pleased to see that some of the campaigning and some of the pressure that the sectors have put on and that Labor, in our consultation, has been part of as well, is seeing that money restored. I acknowledge the minister and the assistant minister at the table. There's a lot of complexity in those R&D measures. They have a chequered history, I think we can probably agree. Changes to the research and development tax incentive have been on the table for some time now, and there hasn't been a lot of agreement around those changes, not even, if I may say so, amongst the governing parties. There hasn't been unanimous agreement about the best way to go about it. Hopefully, what the government is proposing here is an improvement on the original system and also on the proposed changes, which have sat on the table for so long and not been supported by the Senate. We should acknowledge that it has had a chequered, controversial history.
As my colleague the member for Hotham, and the shadow minister for industry, Brendan O'Connor, have talked about repeatedly, we won't have the kind of economy that we want in the future unless we do better in terms of how we get bang for buck for our investment in research and development. We hope that what the government proposes here can be part of that effort. If that's not the case, if it turns out that there are unintended consequences or that there are difficulties that were unforeseen in the 48 hours or so since we got word that this would be in the budget, then obviously the government takes responsibility for any errors that have been made or changes that need to be made. It's a very complex area and it's very difficult to satisfy all of the players. On this side of the House we have a proud history of implementing some of these R&D measures. We are worried about some of the missteps in more recent times. We say that as we support this measure, but with those reservations expressed, and are now on the record.
The final one is the big one: $27 billion for one measure, spread out over a couple of financial years, but effectively a 12-month measure—$27 billion is a lot of money. Again, we've had only a couple of days to consider it. We acknowledge that there is an investment problem in our economy. That's been turbocharged by COVID-19, but it was there before, as well. We had incredibly weak business investment leading into the crisis, very flat business investment, which was partly a function of having 22 different energy policies in the last seven years—not a lot of energy policy certainty. In almost every boardroom that I go to, and there are a few of those, businesses tell me that energy policy uncertainty is a big part of that puzzle. This doesn't substantially get to that.
We've had a problem with business investment. We've said before, on this side of the House, that we took to the last election a policy to address this issue. It was a little bit like what the government's proposing, but the government has gone to 100 per cent write-off. We want that to succeed. We want that to be a measure which kick starts investment in the private economy, that's absolutely crucial. We won't get the right kind of recovery without business investment, without the private sector purring again, and ideally this will be part of it.
We don't want to hold up the progress of some of these measures and their capacity to do some good in the economy. We've said from the outset today that we will be supporting these measures. But we should note on the way through, in terms of this big measure, it's a temporary measure. Its intention is to bring forward some of that investment. We see where the government is coming from in some respects, but for such a big spend it is quite remarkable that they're not paying for a permanent change in the way that we incentivise business in this country. It would be remarkable if having spent $27 billion that what we're left with then is a big cliff when the incentive drops away. I'm worried about what happens then. I'm worried about the lack of vision for business investment beyond a 12- or 18-month period, particularly when the government is committing so much money to this.
Obviously there are a range of other potential issues with the way the government is going about that part of this package. Having had this for a couple of days, a bit like the R&D tax incentive, I think it's only fair that if issues emerge the government needs to own them and it needs to fix them, because we're committing an enormous amount of money in this package and the opposition's only had a couple of days to consider it. There are other issues as well around that part of bill but I won't detain the House with those.
Where do these tax measures fit into the broader picture of the budget? We've said that we support all five of them, including the loss carry-back provision. We are prepared to vote to get these through the House today and into the Senate as soon as possible. We do acknowledge that these are serious times. We're in the deepest, most damaging recession for almost 100 years. We've got a full-blown jobs crisis on our hands. Already almost a million Australians are unemployed and another 160,000 are expected to join the unemployment queues by the end of the year. That means we need to do what we can together to try and deal with that jobs crisis and with that recession. Incentivising business is part of that. We do need to get the private sector growing again. We do need to get them hiring again. We've been saying for some time that using the tax system is an important way to go about that.
It needs to be said that in a budget that racks up a trillion dollars in debt and has $100 billion in new spending—just eye-watering amounts of money, as the Treasurer has said before—it's remarkable that the government has found room to do some of these things but no room to do things like child care, social housing or local jobs programs for some of the hardest hit communities, including some of those represented by our side of the House. It's remarkable.
This bill is about what's in the budget, but Tuesday night was as much about what wasn't in the budget as anything else. Tonight, from this dispatch box, our leader, the member for Grayndler, will have more to say about that. But for now, I indicate Labor's support for these bills. I indicate, in part, our reservations on two of those: R&D and the early expensing. But there is the capacity for the government, who don't have a good record, frankly—they're good at announcing the big numbers, getting the front of The Daily Telegraph. They're good at that. They're not so good on the follow through. We saw that with JobKeeper and other measures. So we support this bill, but with the caveat and the recognition that, if they've got it wrong in one way or another, it wouldn't be the first time and probably won't be the last time. We need to acknowledge that, if errors have been made and not been able to be found in the two days that we've had these measures, that's on the government, and it's on the government to fix them as well. But we support the bill. I'll leave it at that.
