RAFAEL EPSTEIN:
Bruce Billson is the Small Business Minister. The Member for Dunkley here in Melbourne.
MINISTER BILLSON:
How are you?
RAFAEL EPSTEIN:
The small business group this morning told Jon Faine you have given them more than they actually asked for. Why?
MINISTER BILLSON:
We want to energise enterprise Raf. We have got an enormous challenge as a country to create the economic activity and the jobs that we need to underwrite and secure our future and we saw 519,000 jobs lost in small business under Labor.
We need to recover those jobs, build the supportive environment that encourages people like you were talking earlier about, employee share schemes and the like.
Those enterprising ideas. If the appetite is there, if the ambition is there – let us put the support in place so that turns into action, jobs and economic activity.
RAFAEL EPSTEIN:
How do you know the money gets spent here? There is a hell of a lot of a lot of things I could buy under $20,000 that I could simply order from overseas. How do you know the investment is going to be spent here?
MINISTER BILLSON:
It is not solely where that transaction takes place Raf, it is also about what it would do for your business. Those purchases – and for your listeners benefit you are referring to the new measure that enables an instant asset write-off of purchases for goods, for equipment, plant for a business – has to be for a business related purpose.
You would be buying that because you saw a benefit in improving the capacity of your business.
RAFAEL EPSTEIN:
I just wonder if you thought about restricting it to things bought through an Australian supplier. That would definitely help?
MINISTER BILLSON:
We have not Raf because what we are trying to do is say to enterprising men and women of small business, you know best what will make a transformation in your business to improve its productivity, to maybe reach new customers and through that create more jobs in our economy.
We are not about telling businesses what is best for them. We are about creating the environment where people with enterprising ambitions and who are creating four out of 10 of every private sector job in our economy, see that we are on their side an supportive of their work and encouraging of them to have a god and create more jobs and economic vitality.
RAFAEL EPSTEIN:
Did you model this? Is it possible to work out how much investment there might be? How many jobs could be created? Is that even feasible?
MINISTER BILLSON:
We have got a sense for that and that is why we had to cost that and the costings are $1.75 billion…
RAFAEL EPSTEIN:
So Treasury does the numbers on that?
MINISTER BILLSON:
That is correct and then we seek advice from Treasury about what they feel from the international evidence and our own experience in our economy what would make the best difference and what they came back to us with when we fed in the feedback and the insights we were getting from small business men and women about more incentive with a reduction in the tax paid on income, whether you are a company or you are non-incorporated – that stimulus that we hope to invest in your business through the asset write-off and other changes that are part of this package including reactivating employee share schemes.
RAFAEL EPSTEIN:
I just wonder if there is detail that says $1.75 billion. Is there an estimate of jobs or where the money might be spent?
MINISTER BILLSON:
There is range of views about what might happen but it is all about behavioural economics Raf, what will people actually do and we take the best advice about what the most positive action step is we can take to support jobs growth and strengthen our economy. That is how we have crafted this program.
It has been a real thrill working with small businesses and the small business representatives and my own colleagues to get this in the shape…
RAFAEL EPSTEIN:
Two clarifying questions and I do want to ask you a general Budget question. I can see a few people calling to ask.
If you have got a rental property, that included? That is a small business if I spend $20,000 on my rental property?
MINISTER BILLSON:
If you are earning income, because you have to have a business activity going on that is the test, and the expenditure has to be relevant and related to that business activity then you can make that claim.
It is not a grant. Some people have misunderstood the nature of it. You still need to generate an income and through that you are able to offset the income by treating that spending as an expense and therefore as a result improve your cash flow and impact on the income tax that you are paying.
RAFAEL EPSTEIN:
I will get to people’s calls in a moment. 1300 222 774.
On a broader question though Bruce Billson, you are part of a Coalition that is constantly saying there will be less tax and less spending under the Coalition, however, spending is the same as the last two years. As a fraction of the economy it is 26.2% and in fact the amount of tax as a fraction of the economy, your own figures say that is going to go up from 21.9% to 23.4%.
People might like the small business idea but put that aside, you are taxing more as a fraction of the economy. That is not what the Coalition promised.
MINISTER BILLSON:
And our ambition is certainly to get that down but to get it down in a responsible way.
RAFAEL EPSTEIN:
Ambition – that is not much of a delivery is it?
MINISTER BILLSON:
I am being as frank with you as I can Raf in that you know and your listeners know that a change of government does not immediately wipe the slate clean on the expenditure commitments and hard-wired Budget position that we have to deal with.
We need to tackle what we have inherited. We need to start the process and there are $5.5 billion of tax reductions in this package.
RAFAEL EPSTEIN:
But there are no end of backflips. You have got more tax coming out of the economy. The government spending as part of the economy stays the same. There is a backflip on parental leave. The deficit is bigger. There is about 6 different…
MINISTER BILLSON:
Raf I know you love the word backflip.
RAFAEL EPSTEIN:
Here is my point. We admire ambition, everyone admires ambition but there has been a lot of positions on a lot of policies that have changed rapidly and on the big issues like spending less and taxing less, which are key Coalition concerns, you are not delivering.
MINISTER BILLSON:
In the out years you will see that is declining. You see that yourself and then you know in the fiscal year 17-18 we have then got to fund the National Disability Insurance Scheme. That is something we want to do and we have to fund the revenue to fund it.
RAFAEL EPSTEIN:
You never accepted the out years argument when you were in Opposition.
MINISTER BILLSON:
No that is not true Raf. That is simply factually wrong and it is wrong of you to create that impression with your listeners.
We always understand the Budget has to take into account the out years because the Budget is a four year…
RAFAEL EPSTEIN:
Yes you are right. I remember all these noises towards Wayne Swan.
MINISTER BILLSON:
Please let me finish if you would not mind.
The Budget looks at the coming year and then the three years to follow and that is how we know what the Budget trajectory looks like. That is how we know what the task is to try and bring the Budget back into a way in which we can afford and live within our means and we have made any new measure that was announced in the Budget last night, was more than offset by savings.
We have had to make some conscious decisions about reprioritising the resources that we have whilst we continue the Budget repair task. And you saw in those out years in the Budget documents we are on track to get back into the black if we continue on this program.
The other thing too Raf, it is a bit rich of you are saying: oh you have had to change tact because the Senate will not embrace some of the program that the Coalition has put forward.
I heard this nonsense today where Labor was trying to say you wanted a more substantial paid parental leave scheme, you could not do it and now you are not doing it, you are awful people.
Well hang on a minute, they spent a year running around trying to knock off the paid parental leave scheme. We have had to take stock of that reality…
RAFAEL EPSTEIN:
But Bruce Billson that is an interesting position. I do need to move on but there is nothing wrong with Labor saying you have broken a promise. They do not have to be for your policy to criticise you for not meeting a promise.
MINISTER BILLSON:
No but a genuine and authentic engagement in politics does not see people do all they can to block our program and then crow about the fact that we have not been able to implement it.
RAFAEL EPSTEIN:
Ok.
MINISTER BILLSON:
That is just ridiculous. That is obstructionist. That is what Labor said they would do last year and now they are trying to say it is the year of ideas and they have got not one, not a jot.
So we keep on with the serious work of doing what we can to repair our Budget position and to prepare our economy for a safe and secure future where there are jobs and improvements and opportunity. That is what we are about.
RAFAEL EPSTEIN:
Bruce Billson thank you for your time.
MINISTER BILLSON:
Good to talk Raf.