Legislative Council Fifty-Third Parliament, Second Session (53-2) 53 2 Parliament of South Australia Legislative Council published Matters of Interest Federal Budget Federal Budget The Hon. T.J. STEPHENS Legislative Council The Hon. T.J. STEPHENS (15:43): I rise today to add further comments to those I made back in May on the positives of the federal budget handed down earlier this year. The commonwealth Coalition government has handed down a good and wise budget, a budget that does not make massive cuts to essential services, but in fact has sustainable savings measures, one that assists families and businesses by giving tax concessions without worsening the debt and deficit problem. One of the most laudable measures of this budget is the $5.5 billion small business package, so I want to talk in more detail about this today. Small business is the engine room of the economy and employs a vast majority of the Australian workforce. This is particularly true here in South Australia. This budget is very friendly to small business. I would like to discuss some of the specifics here. One of the more obvious benefits to small business is accelerated depreciation, which allows businesses to now claim up to $20,000 on individual assets rather than the usual $1,000. This will act as a stimulus of sorts, allowing businesses to make purchases of small assets such as machinery, tools and even cars. In rural South Australia, where small business is the heart of the community, especially the farming sector, assets could include fencing, water and fodder storage. This is also smart from a public policy perspective, as it draws on businesses' own tax liability rather than a handout. In addition to this is the corporate tax cut of 1½ per cent to a new rate of 28.5 per cent. This again will reduce the tax liability of business, allowing them to invest in assets but more importantly in employing South Australians. I do note, though, that corporate tax is only levied on profits, yet this affects 780,000 Australian businesses. Sadly, regressive taxes such as the state Labor government's payroll tax still exist, and will directly inhibit a business' ability to employ South Australians. Further to this 1½ per cent cut, there will also be a 5 per cent tax cut to unincorporated businesses with a turnover of less than $2 million from 1 July 2015. The commonwealth is looking to further reduce red tape, something which is close to my heart and something which often involves a lot of common-sense. Officious bureaucracy can be debilitating to a small business where precious time and resources can be taken through needless paperwork and compliance issues. There will be an exemption to fringe benefits tax for work-related portable electronic devices. Further measures include wage subsidies for small businesses who take a punt on jobseekers. This is a much smarter approach than a simple welfare cheque, as it assists the economy also. The commonwealth will also provide $18 million for 6,000 jobseekers to undertake four weeks of work experience, a measure which is particularly relevant to South Australia as a youth employment strategy. The commonwealth will provide $330 million to improve the chances of Australia's youth of achieving employment. This has the added benefit of preventing generational entrenchment of unemployment. The commonwealth will also focus on returning the long-term unemployed to work. Further assisting small business, particularly the retail sector, is the closing of the GST loophole on online purchases and transactions from foreign-based e-merchants. This will level the playing field for Australian operators, both online and in shopfronts. Another measure which assists working families and therefore small business and the wider community is the childcare subsidy. This allows new mums and dads the ability to get back into the work force but also provides existing mums and dads greater flexibility in their current arrangements. The subsidy will assist low-income families earning $65,000 or less, which are our most vulnerable and hardest working, with up to 85 per cent of their childcare costs up to an hourly cap. A family with both parents in work can have up to 36 hours of subsidised child care. Just so that this does not seem like a partisan pat on the back, I will read out a quote from the CEO of Business SA, the peak membership body for small business in this state, who unequivocally backs this budget to assist small business. He says: This budget has a clear and very welcomed focus on helping small business including new start up businesses. Tonight's budget will give small business the 'kick start' they need to grow, invest and create sustainable jobs. I congratulate the commonwealth government on its excellent budget. I hope for its swift passage through the commonwealth parliament and I hope we seal tangible benefits here for all South Australians.