27 November 2023
I move the amendments to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, as circulated in my name.
These amendments are important to improve the intent and the quality of this legislation. Don't get me wrong, it is a good bill. Two key provisions nonetheless require amendment. The instant asset write-off and Energy Incentive will no doubt go a long way in assisting small businesses feeling the immense pressure of inflation, interest rates and less consumer spending, amongst other issues.
Small businesses are the backbone of the Australian economy. They account for one-third of Australia's GDP and they need targeted support. And at the moment small businesses are facing a perfect storm. At home, like all Australians, facing cost-of-living price increases in home mortgage rates, but they are also facing reduced revenue in their businesses and consumers spend less but energy prices increase. It is incredibly important that this bill actually achieve its intent by being well targeted.
The amendment that I am proposing, after consulting with Manly Business Chamber, Mosman chamber of Commerce, Warringah Chamber of Commerce in my electorate, and the Council of small business Australia, COSBOA, more broadly, are to give all small businesses certainty and bring forward cash, giving them the opportunity to get more back at tax filing time, and allow them more time to invest and reduce their energy bills. In relation to the asset write-off, the amendment seeks to increase the threshold for the instant asset write-off and the energy incentive bonus taking the threshold from 20,000 to 50,000 respectively. Respectfully, for businesses to actually have the benefit of this provision, $ 20,000 is not sufficient if we're talking about energy efficiency measures, whether it is rooftop solar, a battery, heat pumps, and other efficiencies like LED lighting, these are all going to be much more significant than 20,000. If we genuinely want to support small businesses, it really needs to be increased to that 50,000. Small businesses are struggling with their cash flow and they really do need to do this. Nearly two-thirds of small business owners recently cited concern about their ability to afford their energy bills, so this incentive will go some way to help with that. So I welcome the introduction of the energy incentive to support small businesses and to help them become energy independent and reduce their energy bills, but we need to make sure that we are actually doing it in a meaningful way, that they can genuinely take advantage of this business policy.
The other issue and amendment that I'm seeking to move is, let's be realistic, we're already halfway through this financial year and this is a measure to give small businesses the benefit of this asset right-off in the 2023- 2024 tax year. And when I have raised this with COSBOA and small businesses they have asked me if I am joking in the sense that the government, we are halfway through the financial year, we haven't even passed this legislation, but somehow this is the period in which these businesses are supposed to be able to take advantage of this provision. Most of them aren't even aware that this is coming. And so from a cash flow point of view, what the government is proposing is that sometime in the New Year, January or February, this legislation will have passed, businesses can become aware of it, can then make the decision of whether or not they can take advantage of this asset right off, they have to do so within the next six months, so find the cash flow to do it. So I propose an amendment that I think is a very reasonable one to the government, that this measure be extended to the 2024- 2025 financial year so genuinely businesses have an opportunity to plan for these measures and right-off significant assets to improve the effectiveness and efficiency of their businesses.
I think if the government wants to be genuine in supporting small businesses in these kind of measures and energy efficiencies, this amendment should be accepted and this measure should be extended to the 2024- 2025 tax year. If not, it is really hard to understand where the motivation of the government is other than windowdressing in this place, for this measure, for this legislation, where so much of the timeframe in which it will be available to the businesses has already passed. These are effective, simple amendments to genuinely help small businesses that are struggling and are calling on the government for greater assistance.
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