VIRGINIA TRIOLI:
During yesterday’s Press Club address Tony Abbott confirmed that small businesses will be given a break. There will be a tax cut of at least 1.5 per cent from July and that is ahead of a Government Taxation White Paper.
Bruce Billson is the Federal Minister for Small Business; he joins us now from Sydney. Bruce Billson good morning, good to talk to you.
MINISTER BILLSON:
Good morning to you Virginia.
VIRGINIA TRIOLI:
What does a 1.5 per cent tax cut do for small business?
MINISTER BILLSON:
It is a clear sign of where the Government’s priorities lie. We need to energise enterprise; we need to recover a large share of the 519,000 jobs that were lost in small business under the Rudd Gillard Rudd Government.
To do that, we need to put incentive in front of enterprising people to have a go, to create business and economic opportunities and to make that decision to employ one more person.
That tax cut is part of that incentive, part of that plan to support the engine room of our economy - and we will have more to say about that at Budget time.
VIRGINIA TRIOLI:
But what does losing that revenue do for a Budget that you say is already in crisis, and that you can’t get your other saving measures through the Senate for?
MINISTER BILLSON:
This is where we have to balance priorities and support more business formation. We have seen new company registrations in the last 12 months up 10 per cent on where they were in 2013 – that shows that businesses and enterprising people are prepared to have a go. We need to create the right environment for that.
The modest tax cut that we have spoken about, our ambition to do much more, says to enterprising people – please have a go at that business idea, recruit more, make that decision to add to your team! That will generate wealth, opportunity and tax revenues.
A job is a great contribution to the economy and what we are celebrating is the great contribution small business men and women make - and we want to see more of that into the future. That is good for the budget, good for jobs, great for a stronger economy and that is why it is such a focus of our agenda this year.
VIRGINIA TRIOLI:
But this is another tax foregone along with the other taxes that this Government has got rid of. It said that it wanted to and it promised to, and it did, and I don’t need to list them all but when a Government says its most crucial job of business is to get the budget back in balance – has anyone run the numbers on this?
Do you know how much money you are giving up? And how exactly are you going to make it back?
MINISTER BILLSON:
Of course we have done the numbers and we are continuing to do the financial analysis…
VIRGINIA TRIOLI:
So what do you lose? What’s the cut?
MINISTER BILLSON:
Let me give you a very simple example.
VIRGINIA TRIOLI:
I need to clarify, sorry Bruce Billson I have got to jump in here.
Can you tell us what the loss is from the revenue?
MINISTER BILLSON:
The loss from revenue, we think, is entirely manageable in our Forward Estimates. Why? Because what we have got is a tax on a profit.
VIRGINIA TRIOLI:
What’s the figure?
MINISTER BILLSON:
As the Prime Minister made clear, the calibration of the policy, what size enterprises will qualify, he made it clear also that that would be a 1.5 per cent cut as a minimum so we are working through what is the scale and where that tax incentive will land.
But the key thing is that is a tax on profit. Businesses that are profitable are operating; they are generating wealth and opportunity in the economy. They are employing people. All of those activities generate revenue.
What we are saying is as an incentive for people to do more of that, to recover some of the 519,000 jobs lost under the previous Labor Government. Here is an incentive for people who often mortgage their houses, who stay awake at night worrying about how to make their pay roll, who are thinking about new ideas to carry forward our economy, to give entrepreneurship a chance in this country. That is what the tax adjustments are about.
VIRGINIA TRIOLI:
We understand very clearly what they’re about; everyone understands the philosophy of how to get business done in this country. But I’m not going to waste any more time on it – do you want to give the viewers one last chance to show them that this Government actually does know what money it’s going to be losing from this foregone tax?
Would you like to mention a figure or shall I move on?
MINISTER BILLSON:
No I will not mention a figure on this show because what we have said is the Prime Minister has made it clear…
VIRGINIA TRIOLI:
People will draw their on conclusion from that.
MINISTER BILLSON:
I do not think they will because what we are clear about is that we want to make this tax cut as enabling as possible for enterprising people in our economy.
The size of the businesses that will benefit in the initial phase, the scale of the tax cut – they are all legitimate issues that go to our financial position and our capacity to fund them and the revenue that we generate by increased economic opportunity in the engine room of our economy.
All of those details we are happy to share with you on Budget night.
VIRGINIA TRIOLI:
Will be great to hear those details, let’s move on to the other big issue of the day. In your view did the Prime Minister do and say enough yesterday to turn his fortunes around?
MINISTER BILLSON:
I think the speech yesterday was about what it did for the Australian people, and that was to outline clearly what the priorities are for the year ahead. We know we need to continue with Budget repair.
We know we need to get a better families package out there so that the balancing act of families raising their children and contributing and securing economic opportunities is better supported by a re-packaged families program and policy settings.
We know we are going to focus on small business, jobs and the security challenges of our country. I thought it was an excellent speech outlining the key challenges we face as a nation.
Also making the simple point – sleep walking and doing nothing, rejecting any ideas that get our country back on track which is what Labor is doing – is no plan for our future.
The Prime Minister outlined a very clear plan, a clear sense of our priorities and I thought it was a very strong, credible and meaningful speech yesterday.
VIRGINIA TRIOLI:
Bruce Billson, the ABC has confirmed that Tony Abbott has asked Julie Bishop and Malcolm Turnbull for a commitment that they would not challenge and we are confirming this morning that they did not give that commitment to the Prime Minister.
What do you think that means and where does that leave the situation of the Prime Minister, and the state of the leadership discussion?
MINISTER BILLSON:
There are too many people relying on good governance in this country to have me offering a commentary on chatter. That is not what I am about.
When small business people mortgage their houses they want to know that the Small Business Minister, in Cabinet, is implementing the policy agenda we took to the election – that is what we are doing and that has been my focus.
I will not be drawn into the chatter, the reality TV gossip, about who said what and why. We have an important job in governing the country to make sure our opportunities into the future are improved, that our debt position is addressed so we are not stealing the future financially from our children.
That is my focus Virginia and that is exactly what the small business community and my constituents expect of me.
VIRGINIA TRIOLI:
Alright, we’ll leave it there Bruce Billson, good to talk to you this morning, thank you very much.
MINISTER BILLSON:
Thanks for having me Virginia.