PARTNERSHIPS (VENTURE CAPITAL) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 11 November 2008. Page 571.)

The Hon. S.G. WADE (16:20): I rise to indicate the opposition's support for this bill. Like my colleagues in another place, I will keep my comments brief. This bill is the result of legislation passed by the commonwealth to encourage venture capital investment in small business ventures in Australia. In 2005, the commonwealth extended tax benefits to venture capital investments to stimulate the growth of business ventures throughout Australia. The commonwealth has now seen fit to expand these taxation benefits to include venture capital investment in small businesses in recognition of the valuable role of small business in the Australian economy. Venture capital investments are a valuable means towards expansion for Australian businesses with large potential for growth but insufficient capital to fund such growth.

Through the practice of venture capital investments, investors both in Australia and overseas can invest funds in these businesses, creating a win-win situation. The investor is part of a potentially successful business venture without having to establish or visualise the business, whilst the business operator receives the capital they need to expand their business to its full potential. The benefit to the economy of such investment partnerships is clear. Accordingly, the commonwealth government has seen fit to grant tax benefits to investors engaged in venture capital investments.

However, while the taxation regimes are the responsibility of the commonwealth, the nature of certain venture capital partnerships means that state governments must pass corresponding legislation to recognise these partnerships, and thus we have this bill before us today. The opposition, of course, is keen to ensure that the tax benefits of the commonwealth are made available to South Australian business ventures. I understand that the other states have already passed similar legislation, and it is important that we move to pass our corresponding legislation to ensure that South Australia does not miss out on its share of venture capital investments.

The Liberal Party at its founding had at its core the respect of business and of small business. It is part of our mission to encourage small businesses to grow and take advantage of opportunities. Of course, Labor's roots are in socialism: its support for small business is half-hearted and hollow. Labor always trusts governments and bureaucracies rather than markets and businesses. If there is opportunity for growth, Labor's knee-jerk reaction is to set up a new department to manage and regulate it, because Labor believes that government knows best.

In reality, it is small businesses that are best placed to take advantage of growth opportunities, especially when supported by the investment of capital. The opposition is pleased to see the government supporting this initiative of the federal government—an initiative which began, not surprisingly, under a federal Liberal government. We are pleased to support this bill.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (16:23): I thank the honourable member for his contribution and for his indication of support. I believe that all other members of the council are happy to see this bill supported, and I thank them for those indications.

Bill read a second time and taken through its remaining stages.