Dr CHALMERS (Rankin) (10:24): It is my privilege to rise to speak on the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015 after the member for Ryan and other thoughtful contributions from both sides of the House. I want to pay tribute to the small businesses of this country—the people who take the risks, who work extraordinary long hours, who ensure they have their own skin in the game when it comes to the success or failure of their business. Most importantly of all, I want to pay tribute to the jobs they create. In my community and in communities right around the country, they are absolutely crucial to our prospects as an economy and our prospects as a nation.

As other contributions have noted, the bill does three things for small businesses: the first is a five per cent tax discount for unincorporated small businesses up to $1000 a year; the second is the immediate deductability of professional expenses; and the third is an expansion of the FBT exemption for work related portable electronic devices. As the shadow minister, the member for Oxley, flagged this morning, we will be supporting all three of these measures, because we consider them fundamental to doing what we can in this place to ensure that we are giving small businesses in this country the support they need and deserve.

It has become very easy for people in our line of work to describe small business as 'the engine room of the economy'—of course, that is true—but underneath that expression there is a whole range of important contributions that small businesses make that are not always perfectly understood. We do understand they are a critical source of production and employment, but it is not well understood that much of the innovation in this country comes from small businesses. The Bureau of Statistics talks about 85 per cent of innovative firms being small businesses. What that really means is that our ability to be a creative innovative nation rests on the work that small business does. The success or failure of small business says a lot about our capacity as a nation that is fuelled by aspiration and enterprise.

It is not secret that Australia is going through a difficult period when it comes to employment. For the first time in more than 20 years the unemployment outcome the other day has more than 800,000 Australians out of work—the first time since 1994. The unemployment rate today is higher than at any stage during the former Labor government, which of course covered the global financial crisis and its immediate aftermath. The unemployment rate is the highest it has been since something like 2002,when the Prime Minister was the employment minister. The nation is crying out for the sorts of jobs that small businesses can create and we need to make sure that we are giving them all the support they need. Sometimes that means getting out of the way; sometimes it means tweaking the tax system. There are all sorts of tools and levers at our disposal to help small businesses in Australia.

It is a risky decision to be a small business person. To go out on your own does require a leap of faith; there are higher fixed costs and greater financing difficulties for getting into the game and greater fluctuations in demand than for large businesses. In my local area there are 10,746 small business operators who take that risk, work those hours and put themselves on the line to become successful. About 60 per cent of those businesses are sole traders, and 4059 of them employ local workers. They are an important source of jobs in our community. I pay tribute to them for that reason. The main point of my speech at the recent Logan Chamber of Commerce awards was to thank the small business people in our community for creating jobs in a community that is crying out for jobs. Every extra job we can create matters in Rankin, which covers the northern part of Logan City and the southern Brisbane suburbs. Every time a small business person goes from being a sole trader to employing one more person—or two more people, three more people—that makes a huge difference to the people who are employed and to our community more broadly. So I did pay tribute to them at the Logan Chamber of Commerce business awards. I was pleased to sponsor the emerging business award, because I am particularly supportive of those people who are having a crack for the first time. In this case the award went to the M1 Business Centre; I congratulate them on winning that award.

These sorts of things are important for recognising the work of small businesses. It is obviously crucial that we do that but the decisions we take here are far more important to the policy setting, the policy climate, the small business climate and the economic environment that small business operate in. That is why the small business sector was so damaged by the extraordinary hit to their confidence that happened after the 2014 budget. It was confidence dropped off a cliff. The Prime Minister promised that there would be an adrenaline charge in our economy and that all of this confidence would come surging, and then the first Hockey budget, the 2014 budget, absolutely smashed confidence for small business in this country.

The government were blindsided by broken promises and twisted priorities. They abolished the instant asset wright-off and tax loss carry-back provisions—worth about $3.8 billion to small business. They did that against the adviceof the small business sector, not just the peak bodies. You could not walk down the street in my community—and I assume my colleague the member for Fraser will tell you it is the same in his community—without people raising the issue of the abolition in 2014 of that crucial assistance, via the tax system, for small businesses. They were asking small business to pay more tax at the same time they were reopening tax loopholes for some of the biggest companies that operate in Australia—big multinational companies. They reopened a loophole at the same time that they cracked down on small business. When you hear people on the other side of the House make contributions about their support for small business, never forget what happened to confidence after the first Hockey budget, and never forget that before they reinstated some of these tax measures they had first abolished them. When you remember that the government first abolished Labor measures, it concerns us greatly that the government wants to be patted on the back for what they have done in the small business sector. They are now reinstating them and they want to be congratulated as if they have done something extraordinary.

In a debate last night about some of the same sort of issues, those opposite were saying before the election that Labor's policies were disastrous for small business—that Labor's policies for small business were a disaster and that they were some version of socialism. They did not even realise that the policies in the 2015 budget are an inferior carbon copy of the Labor policies we had in place before the election—the policies that were abolished by those opposite.

That was not the only thing, because they did not just smash confidence and abolish and then reinstate some of our tax measures. They also had something like $845 million in cuts for small business programs, including the abolition of Commercialisation Australia, the Innovation Investment Fund, Australian Industry Participation, Enterprise Solutions, Industry Innovation Councils, Enterprise Connect and Industry Innovation Precincts—$845 million in cuts in programs that were designed to help small businesses and particularly to make them as innovative as they can be so that they can grab market share and create jobs. All of that needs to be seen in the context of the hit to consumer confidence that came from the first budget—that stinking 2014 budget, which will go down in history as one of the worst-received budgets since Federation. It is the main reason that consumer confidence has fallen for 15 of the last 17 months, and confidence today is 17 per cent below what it was when the government changed hands, in September 2013.

Of course, we support the reinstatement of our policies, particularly when it comes to the instant asset write-off schemes and the accelerated depreciation of motor vehicles. We support their reinstatement, because we wrote them. They were abolished and unfortunately they are coming back in an inferior way, but we support them because they are essentially the things that we consider to be important for small business. We also support cutting the small business tax rate by 1½ per cent. In fact, in another one of those cruel ironies, those opposite voted against a company rate cut of two per cent, and then one per cent, when it was put before them during the last parliament. Of course we support lower taxes on small business people in this country, if it gives them that little bit of extra help. We will also be supporting the smaller measures in this bill.

I will not go through all the details. Other contributions, including the member for Oxley's fine contribution, went through the measures in some detail, looking at how they operate and at all of the numbers. I just reiterate that each of the three of them—the five per cent tax discount for the unincorporated businesses, the immediate deductibility of professional expenses and the expansion of the FBT exemption for work-related portable devices, like phones and iPads—will be receiving the support of this side of the House.

We do not think we should stop there. I think that is an important point. When the job is done of reinstating Labor policies, which were doing some good in the small business sector and can do some good again, it is important that we do not just think that the job is then finished. There is a whole range of things that we can do to support small business, whether it be giving them the NBN, which was promised to them, or properly supporting renewable energy in this country, or properly training apprentices. All of these sorts of things will boost the capacity of small businesses in this country.

We on this side of the House have a plan—one that was announced by the Leader of the Opposition, and has been talked about regularly by the shadow Treasurer and the shadow Assistant Treasurer, who joins us in the chamber today—for our aspiration to get the small business company rate to 25, when it can be afforded. That is an important bit of additional assistance for small business. It recognises some of the additional obstacles that small businesses in our community face when it comes to cash flow and all kinds of other issues. Rather than deducting the cost of incorporating a small business, we also want investigate ways to make it easier for them to experience the benefits of incorporation. I commend to the House the recent speech by the Leader of the Opposition when talking to COSBOA, the Council of Small Businesses of Australia, a very well-led organisation. The Leader of the Opposition pledged to work with small businesses, their representative organisations, accountants and the legal profession to try to work out a specific class of corporations for small business. The US has achieved that successfully and we can do it here, too. That would give businesses the ongoing benefits of incorporation without the ongoing burden of red tape —genuine red tape, not the red tape that sometimes gets passed off in this place as something else—which is something that should interest all of us on both sides of the House. As I said before, we would also give them a first-class, world-class NBN and we would also do what we could in government, in addition to all of the measures I have mentioned, to restore confidence in the small business sector—confidence that was smashed by the first Hockey budget.

Again, we support the bill. We wrote big chunks of it and we are pleased to see it back. Like a welcome friend it has returned. At one level it is quite comical—I am sure the member for Forde is about to do it too—that they claim they should be congratulated for reinstating these Labor policies that they trashed 18 months ago. These small-business packages were a proud achievement resulting from the work that Wayne Swan, the member for Lilley, did in part of his extraordinary response to the global financial crisis that set Australia apart in the world, despite the usual dull-headed opposition of the member Dickson and others, who can probably hardly spell economy let alone understand it. We are proud to support these measures—we wrote most of them. No doubt the member for Forde will claim congratulations for them. I wish him well but I think most people in the small business sector would understand that it was Labor that wrote these policies. They are glad to see them back, as am I, but let us not pretend that the government deserves congratulations for them.