Accelerated Depreciation Bill 19/6/18

June 19, 2018

Dr CHALMERS (Rankin) (17:22): It sounds like the member for Forrest has some terrific local businesses in her part of the world, and I enjoyed hearing some of their stories in her contribution just now. I'm also pleased that the member for Parramatta is here in the chamber. The member for Parramatta is an extraordinarily dedicated champion of small businesses not just in Parramatta but right around Australia. She has a small business background and is a very valuable and respected contributor to small business policy on our side of politics.

Chambers of commerce—they've got different names all around Australia—are so important. They do a really good job of representing the interests of small to medium sized businesses in our community. I want to begin my contribution by acknowledging the work of the Logan Chamber of Commerce. I've been a member of the Logan Chamber of Commerce for some years now. It is a great group, and a very well motivated contributor to our local community. I want to acknowledge in the House of Representatives just how much I appreciate the engagement that we have with the Logan Chamber of Commerce. Just two weeks ago I gave a breakfast briefing to the Logan Chamber of Commerce at Diggers RSL. I was joined by my friend and colleague Cameron Dick, a terrific minister in the state government. He is now the Minister for State Development and Infrastructure. What I told the Logan Chamber of Commerce then—and it is the crux of what I want to tell the parliament today—was that when you've got pretty serious budget constraints you want to make sure the tax relief you give to businesses is targeted to where it can do the most good. We want to make sure that we get the maximum bang for our buck when it comes to tax relief for Australian businesses. And that's why we wholeheartedly support the bill before the House, which is about the instant asset write-off. We wholeheartedly support it for a range of reasons. An important reason why we support it is that we were the authors of it. I worked on this policy in another role in this building. I worked for the member for Lilley, who was the first Treasurer to implement this instant asset write-off. Unfortunately, it was chopped by the member for Warringah and the member for North Sydney in their first budget and, frankly, I'm pleased to see it back and pleased to see it extended. We support that because it is an important way to deliver targeted tax relief which will make a real difference to businesses in our local areas.

We want to target tax relief to where it can do the most good, where we can get the maximum bang for buck. For the same reason, we have proposed an Australian investment guarantee, which is all about accelerated depreciation for businesses of all sizes to ensure that the money we're investing in that tax cut or the money foregone from that tax cut in the budget is guaranteeing investment onshore in Australia. That means investment in Australian jobs.

One of the issues that we have with the government's alternative—the $80 billion tax cut—is that, as Goldman Sachs, the Prime Minister's former employer, and others have pointed out, a large chunk of that $80 billion in tax cuts will actually spray around overseas in the form of executive bonuses, share buybacks and puffed up dividends. So we don't think that an $80 billion outlay on a tax cut like that will actually do the good we need it to do onshore. That's why we've proposed an alternative. That's how we roll on this side of the House. If we don't like something the government has put up, whether it be to do with personal income taxes, company taxes or other policy areas, we propose an alternative. Our alternative is the Australian investment guarantee. I think, together—

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The member for Mackellar, on a point of order.

Mr Falinski: Under standing order 76, I believe the member is straying far and wide from the bill.

The DEPUTY SPEAKER: No, he's not. You will resume your seat. There is no point of order.

Dr CHALMERS: What an absurd interruption that is! I'm talking about company tax. If you don't understand that this bill is about company tax, you should go back to your office and have a read of it. That's just pathetic behaviour, and you should be above it. Stop wasting the time of this parliament with such childish and petty interventions. Anyway, back to the substance of the bill, which the government should be proud of. It's their bill; given I'm giving a speech about supporting the legislation, you'd think you wouldn't want to interrupt that, but I don't think we should judge you by normal standards, by the sounds of that intervention.

Anyway, back to the issue. We think that businesses deserve tax relief in this country, and it needs to be targeted. It shouldn't be the $80 billion gift to multinationals, of which $17 billion will go to the big banks. It should be stuff like what is in this bill. It should be the instant asset write-off for small businesses. It should be the Australian investment guarantee that we've proposed. That's how we get maximum bang for the buck when it comes to tax relief for businesses in this country.

I don't propose to deal with the bill in any detail in terms of its specific contents. As other speakers have said, the main aspect of the bill is that it will extend the government's accelerated depreciation measure for small businesses for a further 12 months, to 30 June 2019. The measure applies for businesses with a turnover of up to $10 million. It means they can immediately deduct those smallish capital purchases. As the member for Forrest rightly said, it might be an investment in a fridge or something like that if you're a cafe. You can imagine all the capital needs of genuinely small businesses. A lot of stuff that they need to conduct their business is under $20,000, and this allows them to write it off.

As I said before, we support it. We are the authors of this policy and we're pleased to see it extended. We were terribly disappointed when there were cuts made to this initiative in the 2014 budget. We made the point at the time that the government should reverse course on that, and we are pleased that they did. Whether it was a humiliating backdown or not is a matter for the political argy-bargy of this building. It probably was a humiliating backdown—there have been a few of those—but we're pleased to see the outcome will be what we called for at the time. If only the government would see the light when it comes to their $80 billion tax giveaway to multinationals and big banks as well. If they were able to swallow their pride on that, like they swallowed their pride on this measure, then the budget would be better off and we'd get more bang for the buck for our tax relief for Australian businesses.

As I said before, when you lay out the alternative tax proposals of that side and this side, really the main difference is the targeting towards smaller businesses and targeting towards investment onshore in Australia. It makes very little sense to give so many billions of dollars to foreign multinationals and the big banks at a time when we've got record and growing debt in this country.

It also makes no sense to give a tax cut of that magnitude or that nature to multinationals and the banks when, at the same time, while the government can find $80 billion for those purposes, they say they can't find $17 billion for schools; they can't find $715 million for hospitals; they can't find $3.8 billion for universities; they have $270 million in new cuts to TAFE in the most recent budget; they're taking the pensioner energy supplement off Australian seniors; and they say they can't afford to give $14 a fortnight to pensioners in this country to help them deal with energy costs—the list goes on and on and on—but they can give $17 billion to the banks. Really what I'm saying is that there is a series of warped priorities in their budget and in their approach to public policy when it comes to company tax.

As I alluded to a moment ago, it's not like we have billions of dollars lying around in the budget. The net debt in this country was $175 billion when the government changed hands in September 2013 and it's now $350 billion.

The DEPUTY SPEAKER ( Mr Irons ): The shadow minister will resume his seat. I call the member for Mackellar.

Mr Falinski: Mr Deputy Speaker, on a point of order: I would like to reiterate my point of order. The speaker has moved far and wide from the topic, which is about depreciation—

Dr Chalmers interjecting

The DEPUTY SPEAKER: The shadow minister has been asked to resume his seat. Can the member for Mackellar repeat his point of order?

Mr Falinski: My point of order is standing order 76. The bill before the parliament—

Dr Chalmers: It's about whether or not we can pay for it, you fool.

The DEPUTY SPEAKER: The member for Rankin will be quiet while I listen to the point of order from the member for Mackellar.

Mr Falinski: I understand that I've upset the shadow minister, but—

The DEPUTY SPEAKER: Tell me your point of order.

Mr Falinski: It is standing order 76. This bill is about accelerated depreciation for small business. We have now endured many minutes of discussions about issues—

The DEPUTY SPEAKER: I thank the member for Mackellar. I'll ask the shadow minister to be relevant to the subject of the debate according to standing order 76.

Dr CHALMERS: The idea that we're not allowed to talk about where the money's coming from for legislation that the government's proposed and that the opposition supports is—even by the very, very low standards of this person—quite extraordinary. Is this the best use of his time? Surely it isn't.

The DEPUTY SPEAKER: The member for Rankin will resume his seat. I call the member for McKellar.

Mr Falinski: My point of order is on a reflection on another member.

The DEPUTY SPEAKER: I call the member for Rankin.

Mr Falinski interjecting

Dr CHALMERS: Surely—

Ms Owens: Just keep going.

Dr CHALMERS: Yes, just keep going. You can't allow for certain levels of stupidity, can you, member for Parramatta?

The DEPUTY SPEAKER: The member will withdraw that.

Dr CHALMERS: Stupidity?

The DEPUTY SPEAKER: The member will withdraw that.

Dr CHALMERS: I withdraw. I consider that the commentary made by the member over there was stupid, and it was stupid for so many reasons. Principal amongst the reasons that it was stupid was that central to anything that should be proposed in this parliament is how we pay for it. I'm talking about how we pay for this measure of company tax relief for small businesses, and the point I'm making—and the point I will continue to make—is that the budget is not in especially good nick. That's a fact; it's in the government's own budget papers. Net debt has doubled. Gross debt is over half a trillion dollars for the first time in Australian history, and stays above half a trillion dollars every year for the next 10 years and is higher at the end of those 10 years than it is now. I would have thought that that was pretty central to our considerations. I will continue to make that point and those opposite can take as many points of order as they like.

Our Australian Investment Guarantee, as I have said, is all about targeting business tax relief. It's got a lot of support from the business community. We're very heartened by the support that our alternative has received, because it goes hand in hand with the measure that we're discussing. The $20,000 instant asset write-off in conjunction with the Australian Investment Guarantee is a superior way to give Australian businesses the support that they need to invest in our local economy. We've had modelling done by the Victorian University Centre of Policy Studies, which found that our policy is more effective in stimulating investment than the company tax cuts proposed by those opposite. The modelling found an investment subsidy like ours, compared to the company tax, is 'three times more effective as a stimulus to investment'. The authors of that report said:

... we strongly recommend that policy-makers consider an investment subsidy instead of a cut to company tax as a better value-for-money policy initiative to increase both investment and domestic material welfare.

That's a ringing endorsement. It didn't stop with the economic modelling performed by that university. The Australian Chamber of Commerce and Industry said:

... the government should adopt the Opposition's proposed enhancements to accelerated depreciation.

The CEO of ACCI, James Pearson, welcomed the commitment from the opposition and said it was good policy. From the Council of Small Business of Australia, Peter Strong, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow.

The Australian Industry Group supported it, as did the Property Council and the Energy Efficiency Council. The list goes on and on.

The reason we can afford to do the Australian investment guarantee hand-in-hand with accelerated depreciation for small businesses is that we wouldn't be proceeding down the path that those opposite proposed, which is to give the multibillion-dollar tax handout to multinationals and the big banks. We've also made some other difficult decisions and announcements in other areas of the budget to make sure that we can pay for our commitment.

We support this bill. We do it enthusiastically. We agree with much of what the member for Forrest said about it and what contributions on this side have said about it. This has the capacity to make a genuine difference, so we support the bill. We're proud to be the original authors of the instant asset write-off. I support the amendment by the member for Kingsford Smith, which says:

... unlike the Government's company tax cut plan, the Opposition's Australian Investment Guarantee will provide targeted tax relief for businesses that invest in Australia and Australians, and guarantees new investment.

(Time expired)