JOURNALIST:
What’s this going to mean for small business?
McCORMACK:
Ultimately, our small business plan is going to encourage hire wages, it’s going to mean that hundreds more businesses are able to get a tax cut. So the tax rate is going from 28.5 per cent to 27.5 per cent for businesses with an annual turnover of up to $10 million.
We have also changed the definition of ‘small business’. Previously, a small business was up to $2 million and we know there are plenty of businesses in Moreton Bay, Redcliffe and certainly around the local industrial estate which are possibly, probably, more-than-likely have an annual turnover of more than $2 million. Previously, they were not eligible for a tax cut. Previously, they were not eligible for the instant asset write-off. That is something which enables a small business – under the new definition of a small business – to instantly write-off capital equipment.
So whether that is anything to help their business. That could be a stainless steel industrial dishwasher. That could be an iPad. No matter what it is, they are now able to instantly write it off, up to the value of $20,000, and they are allowed to do that as many times as they can afford, as many times as they like.
Obviously they need to have the cashflow. And speak to any small business person and they will tell you cashflow is king. But we are backing them and we are making it eligible now up to a small business with a turnover of $10m. The programme is around until June 30 this year.
It may well be that this is a programme, this is an initiative, which is extended in this year’s Budget but this remains to be seen. The Budget will obviously be held a month from now. And I think there will be some good things in the Budget for small business.
But there are a number of programmes and initiatives the Federal Government is implementing at the moment, not the least of which is the PaTH programme – the Prepare and Trial, Hire programme. That’s an employment programme. PaTH gets young people under the age of 25 job-ready so they may be able to avoid being long-term unemployed. It gives them the ability to earn up to $200 per fortnight for anywhere up to 12 weeks, but more importantly they get on-the-job training. More importantly, they get that experience they would perhaps not have been able to otherwise. This is about preparing them for possible full-time employment. And they do not lose any of their income support. They don’t lose their welfare benefits.
But for the employer – so many of whom are small businesses – we know they are time poor. They don’t have time to put ads in the paper, put ads online, to sift through all the applicants. So this gives them people who are ready, willing and able to be able to work. But at the same time they do not have the same obligations they would to an employee if they hire them fulltime. So if it doesn’t work out, if the employee and employer don’t gel, don’t work well with one-another they don’t have to continue to hire them. But should they choose to do so, they do get a $1,000 wage subsidy. And should they choose to hire that person on a full-time basis, when the PaTH period is over, they get a $10,000 wage subsidy.
So that’s what the Government is doing. It’s good for the employer, it’s good for the young person who is seeking work. It’s just a good programme.
And I must say Senator Michaelia Cash, the Employment Minister, is the one pushing this. She is doing a wonderful job through this programme. It’s employing young people – and I have to say whilst I am on that – Luke Howarth is doing a wonderful, a fantastic job. I really admire the local job-seeker boot-camps he has been conducting. That is a getting young people into work and the fact that he is getting a group of young job-seekers and local small businesspeople together to talk about options, to talk about Government support, is just fantastic.
To bring young people looking for work together with small businesses looking for staff – to bring those two groups together – is a fantastic initiative. And a very novel and innovative approach to making sure that he is doing something about young people looking for a job. And I think it’s had a direct influence – I have looked at the figures…
JOURNALIST
… of local youth unemployment?
McCORMACK
Yeah. Before Luke Howarth got elected, the youth employment was hovering around 19 per cent. And now it’s down to 12 or 13 per cent. So there are some great success stories there. There is some great support from this Government and certainly some great support from Luke Howarth. It’s great.
Certainly it’s working. There’s been a seven per cent reduction in the local rate. That equates to many, many young people getting their first job. And we know the best form of welfare is work. It’s a job. And Luke Howarth is doing something about it.
JOURNALIST
So the Government knows that?
McCORMACK
Yeah. Look, some other things we are going to be talking about today is the simplification of the BAS – the Business Activity Statement. That’s going to be a real boon for small business, because no longer do they have to fill out the complicated and onerous form. It is going to be very much simplified.
We are going to lift – we are lifting – the burden of red tape from businesses. We have already cut – as a Government since 2013 – $5.8 billion of bureaucracy which was hovering over the top od small business and dragging it down. I mean, we are talking about small business filling out paperwork which, quite frankly, it doesn’t need to.
We have lifted some of the burden and I will be looking for some examples where we can go even further but we have certainly made a very good start.
So, as I say, we have reduced the company tax rate. We have put in place that wonderful initiative – the instant asset write-off. We have extended it to businesses with a turnover of up to $10 million. So we are really getting on with the job of helping small business. Because we understand that small business is the backbone of the economy.
Certainly, I know there are 8,810 small businesses in the Petrie electorate. That’s at June 2016. Now, because we have changed the definition of small business – because we have made that definition more realistic – there are many, many hundreds more businesses in the Petrie electorate which are now considered small businesses in this area. That’s Moreton Bay. That’s in Redcliffe. That’s throughout the Petrie electorate.
JOURNALIST
So is now the time for people to start capitalising on this, coming up to tax time?
McCORMACK
Absolutely! Get on board. Take advantage of it whilst it’s there. Hopefully it might be extended in the Budget, but that’s up to the Treasurer and it’s he and he alone. That’s the way it has to be and the way it ought to be.
But there will be some good things in the Budget for small business I am sure.
And Luke is right about the instant asset write –off. Thanks to our changes, more small businesses are eligible from this year. Already. Yes. It’s right up to $10 million. It’s back-dated.
And the decision – because it was the Ten Year Enterprise Tax Plan, because it was in last year’s Budget – it’s actually back-dated to July 1 last year. So – as Luke says – any purchases in this financial year for more small businesses.
HOWARTH
There’s never been a better time than the next three months!
McCORMACK
Absolutely! You’re right Luke. We are making small business great again. We are extending that offer to more small businesses and what a great offer it is too.
I mean the Federal Government acknowledges that small business – whether it’s here in Petrie, whether it’s Brisbane generally, Queensland, Australia – we understand that small business drives this economy. The economy is driven by small business. It employs 5.5 million Australians. It is responsible for $380 billion worth of GDP and there are 3.1 million small businesses in Australia, so they’re big numbers.
JOURNALIST
Yeah. There are certainly a lot around this electorate doing some amazing things, would you agree?
McCORMACK
Yeah absolutely. Whether it’s Bay Tyres, whether it’s the local coffee shop, the bakery – like ‘Feel Goodz’ where we met the owner for an early breakfast this morning – there are so many more small businesses which will be eligible for all the benefits which go with the Federal Government changing the definition of small business. So that’s great.
JOURNALIST
To boost employment?
McCORMACK
Yeah well small business is the job-creator, that’s for sure. It’s not the Government. tax cuts help small businesses with higher wages, puts a push-down on cost-of-living pressures and it’s only been brought about because the Coalition continues to strive for it.
People like Luke Howarth – who actually not only understands small business but has run one – continues to advocate for small business. We all do. Most of us are small businesspeople in a pervious life.
Unfortunately, in trying to cut taxes and do all these things we were not supported by Labor. They don’t understand small business. Because for most of them, it’s just not the same priority that we have. It is something we work to back everyday and I just wish Labor would get more on board.
JOURNALIST
So the point of these sessions you’re doing today – and around the place – is to spread the word that there is help?
McCORMACK
Sure – but not only to spread the word, but to listen. It’s all well and good for politicians to talk – but the most important thing and one of the reasons Luke invited me here – is to listen. It’s to listen. That’s how I meet people. That’s how I understand their stories and that’s how I know we – Luke and I and the whole Government in fact – are doing the very best job we can for small business.
JOURNALIST
Thank you.
McCORMACK
Thank you.