[RECORDING STARTS]…. heard the importance of shopping local. And the Government is trying to do that through its procurement policies. We already have about a third of Federal Government goods and services going to small business.
And when I first got in the job as Small Business Minister, I wrote to each of my Ministerial colleagues and stressed to them the importance of getting small business in that mix. And I maintain that. Like I say, I think it is vital to get on board and shop local. Support local. There is a campaign each and every year but I urge people here in Port Macquarie to do it each and every day.
Because it is so imperative that people think local when they are buying goods and services. You don’t know how important a small business – a service – is until you’ve lost it. And it is all well and good for bigger players to come into the market. It is all well and good for that, but if you lose the local hardware store or the local bakery, if you lose the local shoe shop, it’s so hard to get it back. And whilst sometimes pricing is an issue for people, the fact is we need small business because they employ locals. They often give people their very first start – whether that’s an apprentice or a trainee – but they also provide great competition within the market.
And that’s why we are also trying to level the playing field with the GST online, when shopping online is concerned. So companies from overseas selling into Australia with a turnover of more than $75,000 will be required to pay GST. This is about helping local small businesses in places such as Port Macquarie, in places such as Coffs Harbour, and in electorates like Lyne and Cowper.
And no one understands that better than regional MPs, particularly those who ran their own small businesses – like Luke Hartsuyker and Dr David Gillespie, who I visited yesterday, and myself – we get it because we have done it. We understand that these shops are opening very early and closing very late, going home and then having to do a lot of paperwork. We get all that.
That’s a really good question. That is why we are cutting small business tax rates. Previously, the definition of a small business was one that had a turnover of up to $2 million. Now it’s a turnover of up to $10 million.
So those businesses will be able to take advantage of a lowering of the company tax rate – to 27.5 per cent, the lowest it’s been for 50 years – but also take advantage of what’s called the instant asset write-off. So that enables small businesses to buy capital equipment for their business – whatever the case might be – up to $20,000 as many times as they like. Of course, we know they have to have the cash flow and, as we have heard at this forum today, cash flow is king. But if they have the cash flow they can instantly write that purchase off.
So that then gives them the ability to have that money, they can put on the extra trainee, they can re-invest it in their business, and that’s what most small business owners and operators do.
Great, but specifically in the Port Macquarie and Wauchope areas, are there things you are hearing loud and clear that you haven’t already heard?
Red tape is something – and I always ask for examples from the small businesspeople I meet – but that’s something that comes up and it was raised again here today. People in small business want to see less red tape. They want to see less paperwork. That’s why we are simplifying the BAS, so there’s just GST on sales and GST on purchases and total sales from 1 July this year.
But it’s from feedback like this why we are simplifying the BAS. And I am looking for examples. And I put the call out again today. If anybody has examples of Federal red tape – but also red tape in as much as where it overlaps with other levels of Government – let me know.
That’s why we are rolling out the National Business Simplification Initiative. It started late last year and we are rolling that out across the country – particularly in the hospitality industry – but we want to make sure that it covers businesses which are starting out – start-ups, especially – in every sector of the economy. So there are initiatives in place to lift that burden.
We know that small business do a power of work, particularly along the Mid North Coast. I mean, there are 12,500 small businesses in Luke Hartsuyker’s electorate. But under the tax changes and the small business redefinition we have in place, that’s going to increase by around 5,000 businesses. So that is significant.
And I have seen today – yet again, I have spent some time here before – that there is such a diversity of businesses in Port Macquarie and in the coastal areas around here. They do a wonderful job. They do a power of work and they certainly underpin the local economy, for local GDP, they do an amazing job.
Fantastic. Thank you.