MICHAEL McCORMACK:
[RECORDING STARTED] … So on the back of tax cuts and our plan to back small business, the nationwide roadshow of small business will listen to small business about their needs and talk up our plan.
I know certainly Sarah Henderson speaks up for small business, and we are a Government which backs small business so I am excited to be on High Street today.
Increasing the threshold up from $2 million to $10 million turnover, that’s going to result in significantly more businesses – particularly in and around this area – being able to take advantage, not just of the lowering of the company tax rate to 27 and a half per cent, which is the lowest it’s been since the late 1960s, but also to take advantage of the instant asset write off.
This enables a business to buy – you name it – to help their business with equipment. iPads, any equipment up to $20,000 and instantly write them off. Previously that was only available to businesses under with $2 million turnover now it’s going to be up to $10 million turnover. So that’s a significant saving for those businesses and we know that businesses – if they’re turning over $5 million or $9 million or whatever the case may be - doesn’t mean to say that’s their take home money or their profit.
So you could well have a business in a very tight margin situation, a very tight margin sector, where they have a number of employees, they’re turning over $7.5 million for argument’s sake and the person running that business is paying the power bills, opening the doors every day, paying rent, hiring staff, they may be in fact taking home less money, making less money, than the person they actually employ.
It’s tough work to get up early in the morning, finish up late at night and then go home and do paperwork.
That’s why, as well as lowering the company tax rate and the 10 Year Enterprise Tax Plan, we are simplifying the BAS so from July 1 this year. The BAS is going to be a lot simpler and we’re trying to wherever, however and whenever possible, cut through a lot of the red tape.
We have already lifted $5.8 billion worth of red tape so that’s why this National Small Business Road Show which today comes to Corangamite with Sarah Henderson, is so important.
It’s important so we can hear from businesses. Businesses who might say, look this is an area we need to look at.
I was in regional Victoria the day before yesterday, in Benalla and Wodonga in fact, with Senator Bridget McKenzie. A couple of businesses brought up a couple different ideas I’d not heard of before, so we take those back, we workshop them, do the modelling through Treasury on what the figures might mean or might not mean. And sometimes it’s the little spark of an idea that a small business operator in Geelong might raise with you that might ultimately become national policy and help small businesses right around the country!
That’s why it’s important, not just to come and talk with people, but to listen.
That’s why Sarah Henderson asked me to come to her area, to Corangamite and I jumped at the chance. Sarah jumps up in the Parliament and is passionate about this area, I have got to say, some Members of Parliament get there and tread wearingly and see where all the things lie from the start, not Sarah though, she gets in there, she fights hard for this area.
JOURNALIST:
She’s certainly never afraid to speak up…
McCORMACK:
She’s absolutely not afraid!
JOURNALIST:
Mr McCormack, what constitutes a small business for you?
McCORMACK:
Well, what constitutes a small business for me is a business with under $10 million in turnover. And our plan cuts taxes for businesses up to $50 million.
JOURNALIST:
Oh really? Wow!
McCORMACK:
Like I say, just because you might be turning over $9.99 million and might employ 50 people, have a big shop front and dare I say it, even a national and even international presence, that doesn’t necessarily mean to say you’re making a whole lot of money.
You’re providing jobs and opportunities for any number of people and your local area, but that doesn’t mean you’re a huge business or enterprise. A lot of these people, a lot of these businesses are family enterprises and for generations, passed on from father and mother to daughter and son through the years.
Big businesses, big corporations that have a multinational presence, and we all know who they are, they’re big brands, recognisable household names. A lot of the people, the small businesses I represent might have a reasonably large business footprint, but doesn’t mean to say they are big business.
I’m pleased we’ve changed the definition. And I’m pleased we’ve been able to get these changes through the Senate to recognise that these businesses need help. They’re not after a hand out, no small business operator is after a hand out, they just need a hand up, they need a bit of assistance. Through red tape reduction, through BAS simplification, through a tax break and they will employ more people.
Small businesses, when they get a bit of money, don’t put it in their back pocket they don’t go on the holidays they probably should take, they don’t go and treat themselves, they reinvest in their business, they employ that young Australian. They buy a bigger shop, they look to expand, they actually create better living standards for their community by employing that additional Australian, by giving people higher wages. That’s what they do.
JOURNALIST:
With the roadshow at the moment is there a submission page or is it more of an informal process if anyone wants to contribute?
McCORMACK:
We are putting together a new look, freshened up business.gov.au webpage and the mere fact that I’m out and about is important, I give out my business card and already people are feeding back into my office their ideas and suggestions.
JOURNALIST:
What are some of the main ideas you’re hearing?
McCORMACK:
People are concerned about energy and red tape.
There are also some interesting and varied ways being suggested about how we can look at red tape.
People are impressed with the tax cuts and are impressed with the National Business Simplification Initiative, as well.
This started in Parramatta in November of last year and it helps starting-up businesses, instead of taking 18 months to start up their business, it now only takes them 3 months. Its’ one portal, one entry point, one set of paperwork, one framework to complete, rather than many forms having to be filled out with tweaks, and it helps to start up business in the hospitality sector. To get that significant of reduction of time to have that first coffee served or the barista machine working. Once successful in Parramatta, we're rolling this out across the nation now, and not just in hospitality.
People told us how difficult it was to start up a small business but now we have the New Enterprise Incentive Scheme which is also helping start-up businesses. There is any number of support options available for people through the Small Business Advisory Service, with people wanting to start up their small business incubation sites.
And, of course, we have a Prime Minister whose buzz word is innovation. He wants to support small business and support that entrepreneurial spirit and drive, that helps to start up online businesses and trade to the world.
We now have those new trade agreements (with South Korea, China and Japan) and many people think these are just for agriculture, but no, they’re not, they’re also service orientated as well.
Trade Minister Steve Ciobo, with the Assistant Minister Keith Pitt are out there trying to sell Australia to the world, telling the world about the ideas and entrepreneurial drive available here.
The world is hungry, it has an appetite for what Australia is offering and selling and we’re the Government trying to support this and make that happen.
JOURNALIST:
What are the small businesses you see, the ones most emerging now, are they hospitality small businesses or other types?
McCORMACK:
There’s all sorts.
I went to a university just the other day where the students are starting their own small business, where they have virtual fences and what they do is they microchip the cattle so that when the cattle go too far in the paddock a signal is sent to make them turn back.
JOURNALIST:
So it’s anything?
McCORMACK:
It’s really anything.
The world is there for the people to explore! And as far as the internet and other technologies go, they’re not restricted by the old paradigms of what we’ve been used to, for instance in agriculture, the service industry and hospitality. Any industry you can think of, because we have had a shift in some of the industry sectors here in this nation, people are looking to expand and explore the most innovative ideas. Some may call them weird and wacky, but I call them innovative and some of them are kicking goals like you wouldn’t believe!
And I am looking forward to meeting more of them today.
JOURNALIST
Anything else?
McCORMACK
No, thank you.