GRAHAM RICHARDSON:
Bruce Billson welcome to the program.
MINISTER BILLSON:
Graham thanks for having me and best wishes to you and the viewers.
GRAHAM RICHARDSON:
Good on you. Now I know from the papers - if you read it there it must be right, that you are called pastor. Not as in what you eat with a bit of clams and spaghetti sauce but I am talking about as in a priest or a reverend whatever because of the way you proselytize on the issue of small business.
How many of them are calling you that?
MINISTER BILLSON:
I get a bit of that. I wonder whether there is a Bolognese reference coming but it is all about my sincerity and passion for small business and a conviction that they are the life blood of our economy, the real driving force for our future economic opportunities and really a group of enterprising people we need to get behind.
And that is exactly what we have done with this Budget.
GRAHAM RICHARDSON:
And I also read that you had experience, a not so good one, in small business with your wife sometime back.
MINISTER BILLSON:
We have ‘lived the dream’ of having our own small business. It is challenging, it is character building. I say facetiously I know of the pillow talk of cash flow where you are talking about how to pay that month’s bills when you might rather be talking about something else.
But we did not succeed Richo.
We had a go. We loved every minute of it, but it is testament to the fact that this is challenging stuff and whilst I do not seek to tell small businesses how to better run their businesses I can with all sincerity and authenticity talk about having felt many of the challenges and head winds that they have felt and it underlines my personal conviction to do all I can to support enterprising Australians.
GRAHAM RICHARDSON:
You had a go and of course that is what Joe Hockey called this Budget is it not? It is the ‘have a go’ Budget. I asked Saul Eslake, who I think is a pretty respected economist a question last week about the effect of your package as a stimulus. I would just like you to have a look at this for a second.
[Saul Eslake]: First of all, I do not think the cut in the company tax rate will make much difference at all. Despite all of the romanticism that the Coalition engages on when it comes to small business, the reality is that some 63% of small businesses with turnover less than $2 million are neither profitable nor taxable. So much of the benefit of the cut in the tax rate for companies will not be of any better to a majority of small businesses that are not making profits that can be taxed.
And although the accelerated write-off for purchases of assets worth less than $20,000 will stimulate more spending of that sort, the vast majority of that spending will be on imported goods, so the net impact on the Australian economy will actually be quite small.
I think whether you agree with that statement or not he is a pretty respected economist Saul Eslake. He is certainly no Labor stooge. Now what do you make of that? What is your answer to it?
MINISTER BILLSON:
I always read Saul’s comments with great interest but he would need great knowledge and detail to try and find something that is negative to say about this package. A couple of points I would share with you Richo.
He is talking about who is going to benefit from the company tax cut for small business.
We know that two-third of small businesses are not structured as companies. That is precisely why we have offered the lowest small business company tax rate in almost half a century since 1967 but we have also made sure there is a discount of 5% up to $1,000 for the 1.7 million small businesses that are unincorporated - to give them that same incentive.
We have seen that. In fact, I have been promoting that diversity of organisational structure in the media and Saul seems to have fallen into the same trap Bill Shorten did where he said I will match your 1.5% but I will raise you on the small business company tax cut and ignore two-third of small businesses that are Tony’s tradies.
They are sole traders, independent contractors, operating as partnerships or through trusts – we are alert to that and that is why our package has a number of elements.
On the asset depreciation measure, I have not met anybody that is critical of it. It is about saying to small business we are not going to tell you how to spend your money. You decide and we will put in place a mechanism to get a share of it back to you more quickly.
I tell you what, it has been a universally positive response that I have had, I have heard firsthand from small business people. This is what they are looking for. It will be catalytic in turning ambition and ideas into economic action and that is what we want.
GRAHAM RICHARDSON:
I have had some tradies at my place in the last few days because we had some storm damage a few weeks ago.
MINISTER BILLSON:
I hope everything is alright at your place and no one was hurt.
GRAHAM RICHARDSON:
Yes we have had some damage as these things do. But those tradies they were certainly talking up the package, but you have mentioned something that I also see as a bit of a weakness.
If you take me, I am an unincorporated body. I have an ABN, I have a small business. I earn less than $2million. But I would have to concede I earn slightly more than average weekly earnings.
Do you think you really needed to give me a present? Because you have given me a big present and like everybody, you give me a present I will take it. But should I be getting one?
MINISTER BILLSON:
Hang on you and Saul are now on different sides of the argument. Saul is saying it is not enough and you are saying it might be too much. I think that gives you an idea we are about right.
GRAHAM RICHARDSON:
I am not saying that. What I am saying is that it is not targeted. Someone can be on $1.9 million a year and you are giving them a present. Is that a good idea?
MINISTER BILLSON:
If they are on $1.9 million a year and they are unincorporated they will get a 5% discount on their tax liability up to $1000. And I hope you use that up to $1000 wisely Graham.
GRAHAM RICHARDSON:
I do not get $1.9 million but I get a fair bit and I will use it. I am grateful for it. I said the other day that I am thinking of voting Liberal, you have just about bought me. I come cheap. But it is a lot of money you are giving away.
MINISTER BILLSON:
Great, and that would be one of the wisest things you have done.
It is up to $1000. It is capped. It is a 5% discount.
GRAHAM RICHARDSON:
No but I am going to go out and buy some equipment. I have a home office. I have not bought anything for it yet for about 5 or 6 years. Mind you everything gets fixed now. I will change the lot of the next year or two.
MINISTER BILLSON:
Yes ok.
GRAHAM RICHARDSON:
But should you be giving that to me? If someone is on a very big income and it is in the top 1% or something, why would they deserve to be getting money off you?
As I said the other day in my column in The Australian, I do not know if you read it, but I said then that thank god Joe Hockey has not given up on middle class welfare. He is even now into upper class welfare.
I just regard that as just going over the top. There ought to be a way of just trying to calm things down. We do not need to get that much.
MINISTER BILLSON:
Richo, a couple of things. If you have got legitimate business related asset purchases that are relevant to your income earning capacity, the law currently allows you to go and buy as many of those as you want up to $1000.
What we have heard, what small businesses have told us, what independent contractors have told us is that that is not the encouragement they are looking for. A larger sum would turn an idea they have – you might go and buy some new technology and then have to recruit someone to come in and drive it for you. That is generating economic activity. You have got to buy it off somebody.
GRAHAM RICHARDSON:
I have recruited by wife.
MINISTER BILLSON:
That is good.
GRAHAM RICHARDSON:
I cannot get another one. So she is going to keep doing it but now she is going to do it on much better equipment than our ageing rubbish.
MINISTER BILLSON:
Is that not great?
GRAHAM RICHARDSON:
Yes it is all great but we could have sort of done that without you. In the end, if you are earning the sort of money I am, do you not think you should be doing it on your own? You should not need government handouts.
MINISTER BILLSON:
You are making your own opportunities. You are pursuing your own livelihood. That is exactly the kind of thing we want to do.
We are not about striking down tall poppies. We want to encourage people to embrace the culture that you are displaying, one of entrepreneurship, and to make sure that if you see an opportunity to invest in the kit you need to do what you do and to it well we want to encourage you to do that.
That is essentially the way that tax system operates. There is a cap on it for $1000. We know for some of the technology that small business needs $1000 is not going to do it and will not be catalytic for them to take an idea and turn it into economic action.
We want the economic activity. That is our purpose. We want to see you succeed Richo and the beautiful thing is you cannot keep buying this until the cows come home, you will have nowhere to put it and then you will have to get your tradesmen back to build you another room and then that is good for the economy.
Get amongst it Richo. You are a great example and I hope more people follow in your example.
GRAHAM RICHARDSON:
I am not certain I can turn the economy around all by myself but I do undertake to do my very best in that regard. I might say Pastor Bruce god bless you. You are doing a wonderful job on these things.
But I mentioned to you before we started the interview, on a more serious note, I mean quite apart from this giveaway, which I think is reasonably well targeted, as I have just said, that I do not think is 100% well targeted but I think you are headed in the right direction, one wonders though, have you abandoned the real prize?
I mean at the end of the day, you were last year, all about Budget and debt repair. You are not anymore because that has been put back to 2019 and every economist agrees some of the figures you have got in there are pretty rubbery.
It will not happen by then. You have got the $5 million in cuts in the Senate that are still in your figures as if they are going to get passed. Buckley’s of that.
And some of those growth figures I think are, to say the least, optimistic. But even if you do not believe me on those things you have put it way back.
Why would you give up on that task? I know politically you did not do too well last year, but if it really is in the nation’s interest to do something like that, to have the debt repaired, to cut Budget spending and all the rest of it, would it not be better off going out to Australians and explaining to them far better than you did last year, the reason why you have got to do this?
MINISTER BILLSON:
I think it is about 83% of the Budget is framed by statutory requirements so that is not where there is much wriggle room Richo and that is where we have been working with the Senate to try and make sure some of those calibrations do not see a reduction in outlays, but see them not take off like jet-fighters but to take off in a more manageable, sustainable way.
That work continues. That work continues, even in the Budget that Joe Hockey and our team laid down last week, the week before I should say, you are seeing an improvement in that deficit position by about half a per cent of GDP a year.
It is credible, it has been seen to be so and assessed to be so by the economists that say the forecasts are about right. We have got the moving parts clearly in view about where the upside and downside risks are. We are not trying to burn off the green shoots in the economy by going too hard and too hot, too soon.
We want to grow the economy, that is where the jobs will come from and that is a dual objective of the Government – repair the Budget, but get the economic action strategy that sees growth and more jobs a part of that picture. You cannot just pick one and ignore the other, we need to do both.
GRAHAM RICHARDSON:
We will have to agree to disagree because on that Budget repair you are relying more on bracket creep than any other single thing to fix the Budget. That is where I really have to disagree with you.
MINISTER BILLSON:
To bring about change…
GRAHAM RICHARDSON:
You are like Morrison you know. You two are great salesmen. If anybody could sell it, it will be you, but I do have to leave it there, they are blowing in my [inaudible] and telling me it is time to go. So Bruce, thank you very much for your time and I hope we can do it again.
MINISTER BILLSON:
And let us energise enterprise Richo, thank you for having me.
GRAHAM RICHARDSON:
I am out there to try and fix that economy for you, you can bet your life on that Pastor Bruce.
Energise enterprise that is what he said. What a great line isn’t it. He has lots of those great lines.