13 May 2015

Address at the Institute of Public Accountants’ Federal Budget Breakfast, Canberra


Check against delivery

It is a good morning. A sincerely good morning. In fact, it is a great morning for the enterprising men and women of our country.

Last night was a very significant statement about the priorities of the Government that wants to energise enterprise; that looks into the hearts and eyes of the risk takers in our economy and says it will be up to you to create the jobs and the economic opportunities of the future.

It will be your role at the heart of the transformation in our economy as the proceeds and benefits of the mining boom taper as that investment phase turns into production.
It will be enterprising men and women in small business and family and farming enterprises that will pick up the reigns and transform our economy so that this generation, our generation, can carry forward the great promise of our country and that is that the next generation will have it better than we have.

What we knew when we came into office was the policy settings that we inherited were going to see our generation fail that greater promise for those into the future.
We would be the first not to see continuous growth in income, improvements in living standards and opportunities, and we knew that was not good enough and none of us in this room would want to see that happen.

But just hoping for it to change was not enough. What we needed to do was recognise where the impediments and headwinds were in every square in the economy, so that those enterprising people with an idea, an aspiration, a sparkle in their eye and a fire in their belly could turn that ambition into economic activity.

We have started that journey previously focusing on red tape reduction and other impediments, but as I work my way around the small business community of Australia, listened to those ambitious and inspirational men and women, took the counsel of many of you in this room and you in industry and organisation – we knew we needed to also restore incentives to provide encouragement.

To celebrate and recognise that entrepreneurship, innovation, productivity, new services, new offerings to delight customers; not just consumers here in Australia, but in those new markets that were opening up in north Asia.

To do that, we needed to energise enterprise.

We needed to take that ambition of enterprising men and women and transform that to implement activity.

That is what the Budget was about last night.

It was the largest small business package we have seen in this nation's history. It was about putting in place improved incentives for that entrepreneurial behaviour.
You knew we were going to deliver the small business company tax cut and that is what we have done.

But you and I know, and you have shared with me as I have travelled around the country, that two-thirds of Australian small businesses are not structured as companies.

Our independent contractors, self-employed people, working in partnerships or through trusts; two-thirds of those enterprises, that under the Howard Government when we left office provided 52% of the private sector workforce opportunities, but when the last election was held, that number had fallen to 43%.

Under the Rudd-Gillard-Rudd years, 519,000 jobs were lost in small businesses. Enterprises right across our continent. We knew at the end of those Labor years there were actually fewer small businesses employing people than was the case when the Howard Government was in office.

We saw that small business has done it before and throughout our nation's history they have done it time and time again. What they needed was a government in Canberra that was a partner, a collaborator, someone who was their best ally and their best advocate and that is what we promised to do.

Implementing our election commitments has seen changes in the competitive landscape. We have seen unfair contract terms protections developed, reforms to franchising, the right to repair in the car industry, the idea that suppliers to our major supermarkets should be able to have a fair go and can be respected for their entrepreneurship as well.

The red tape reduction – an ambition we need to continue on because when an election was held previously, the World Economic Forum had us at 128th in the world in terms of how junked up our economy was because of overreaching and excessive regulation.

Only 127 other economies less constrained, more nimble, more agile, better placed to adapt and embrace the economic opportunities within their reach. That work has got to continue and that is also a part of our Budget.

Looking to support the transformation of the tax office so it is more digitally engaged; streamlining the business formation process; allowing your professional advice to be deducted as an expense rather than depreciated over 5 years; encouraging people to think about new avenues to finance.

I heard Robert this morning talking about Westpac finally offering non-collateral linked small business finance, at last. Aussie businesses should not need to mortgage their house and their first born.

New opportunities; crowd source equity funding, the cost and the forward planning in pursuing that avenue; embracing a gain in rejuvenated employee share schemes – these were less headline copping items but crucial to the economic environment, entrepreneurial eco-system if you will that all of you and I work in every day.

Those tax cuts were substantial. The lowest small business company tax rate since 1967. That is when Sadie the cleaning lady was number one. Sargent Pepper's came out from the Beatles. I was one year old and I am pretty old, and that shows you what a transformation that is.

The discount for those that are not incorporated – a proportionate benefit capped at $1,000, saying to those enterprising people we value what you do, we encourage you to push on and if you have an aspiration to grow your business we will back you and support you.

The instant asset write-off – not linked to some dodgy mining tax as a sweetener to make slightly more palatable the sourness of that tax, not linked to the abolition of the entrepreneurs tax offset, which adds a tax advantage benefit to 400,000 of our smallest businesses. Not linked to a tax increase in a new tax but bundled with tax reductions to make it clear that this is our priority, this is our ambition and this is how to make our nation best into the future.

Steve is coming forward. He is pumped. I am excited. Let's energise enterprise. I am counting on you for your great contribution and it is great to see you all here again for the sixth breakfast in a row.