Good morning everybody. I am here this morning with the Minister for Small Business, Michael McCormack. We have just finished our roadshow over at the University of Capricornia and we spoke to the people on the ground there and listened to their issues.
We had the tax department, the ACCC and small business in general – the people from the Government there – to listen to what the people of Gladstone had to say about how they think we are going as a Government and it was all pretty good news. So Michael, welcome to Gladstone, it’s not your first time here to Gladstone. You were only here six months ago. So you would know the run of the town by now…
So welcome. Michael is having a stop in Gladstone this morning but then he’s going right up the coast with his roadshow. He’s here to help inform and assist small business with the issues they have – and believe me there is a lot of issues out there with small business at the moment.
Things are not really good in Gladstone at the moment for small business. But there is always a way forward and I am pleased to be here with Michael today and I will hand it over to him.
Thanks Ken. It’s great to be back in Gladstone. Gladstone and my hometown of Wagga Wagga have a lot in common. Given Tim Rose – a great entrepreneur, a great businessman – brought Southern Oil Refinery and established it here in Gladstone. He came to Gladstone because of the hard work of Ken O’Dowd, your local Member for Flynn.
Ken O’Dowd helped make sure the right parameters were there; the set-up was there so Tim could start his Northern Oil refinery here, converting what is now waste and a whole heap of other waste products to reusable oil. And that is a tremendous facility and it shows what can be done when you have not just that entrepreneurial spirit, but when you have the hard work and dedication of a local member like Ken O’Dowd pushing the issue along.
Now, the 9th of May was a very important day for small businesses here in Gladstone and across the wider Flynn electorate, because that was the day we redefined what is a small business from a turnover of $2 million to a $10 million turnover. Labor always confuses turnover and profit. We understand that just because you might be turning over, say, $5.5 million, it doesn’t mean to say you’re taking home a lot of money. That’s why on the 9th of May we passed into law the fact that a small business is now defined as a turnover of $10 million.
What that also did was it enabled those small businesses with a turnover between $2 and $10 million to take advantage of the instant asset write-off. That night – in the Budget – it was extended by 12 months. So businesses up to a $10 million turnover can now use the instant asset write-off for the next 12 months to buy the capital equipment they need for their businesses – whether that’s an iPad, whether that’s a stainless steel sever, no matter what it is – they can buy it and with that little bit of extra money they can reinvest it in their business.
The other thing that happened on the 9th of May is we changed the law to say that the tax rate for a small business is 27.5 per cent. That’s the lowest level it’s been since the Second World War. So it’s a record-low tax rate and this comes after the national accounts have shown our 26th consecutive year of economic growth.
So the signs are promising for Gladstone. The signs are promising, particularly for small business in Gladstone. Ken O’Dowd is backing them. The Government is backing them. We want to make sure we give those small businesses every ability to succeed. We want them on the pathway to success. There are any number of small businesses opening up in Gladstone and we encourage them. I appreciate as Ken said there is that phase-off from the mining boom, but things are looking good. And they are certainly looking good for small business. There is so much entrepreneurial drive and spirit here in Gladstone. And our Government – the LNP Government – wants to back them each and every step of the way.
Are there any questions?
The issues raised by small businesses in these meetings – I am assuming they’re different from place to place – what stood out for you here in Gladstone?
Certainly they were very delighted that instant asset write-off has been extended for 12 months. They are absolutely thrilled the tax rate has come down to 27.5 per cent. As I say, that’s the lowest it has been since the 1940s.
But there are issues, and those sorts of issues are energy prices. Tomorrow, COAG is meeting in Tasmania and the Chief Scientist will have his report for the Government. And the Finkel Review, we will obviously look at that in conjunction with the State Premiers. I know that Josh Frydenberg and Matt Canavan – the Senator from Queensland – have been looking at what we can do to drive down energy prices. One thing we won’t do – one thing the LNP won’t do – is impose an economy-wide carbon tax. It will be hard on farmers, hard on miners and particularly hard on small business.
The Government is obviously doing a lot to support local small businesses. Is there that responsibility for small businesses to step up and say, ‘hey, we actually have to look inward as well’? We can’t just rely on others?
Small business is the backbone of the country. There are 3.2 million small businesses across the country and they employ almost half our workforce. And here in the wider electorate of Flynn, there are almost 17,000 small and medium businesses. And that number – I can say – is growing.
It’s not just the shop-fronts. It’s not just in the high streets. It’s a lot of home small businesses starting up. There is a great entrepreneurial spirit here. The fact we have been able to broker three trade agreements with China, with South Korea and with Japan, means there are markets and opportunities open for those small businesses which were not there before. We want to make sure there is every pathway to success for those small businesses and that’s why we are getting in and behind them and we are backing them each and every day.
How do we go about encouraging locals to actually look local and spend money in local businesses?
I have always been an advocate – as has Ken O’Dowd – to shop local, think local and buy local. That’s why we as a Government are making sure that overseas traders who sell into Australia online or however else they do trade – if they’ve got a turnover of $75,000 – they will pay GST.
How is it fair that a business in Gladstone opens its doors, pays rates, pays wages, pays the electricity bill, works hard all day, goes home and does the paperwork and then has to compete with someone who is not paying the GST? That’s why we are closing that loophole. That’s why we have brought in laws to crackdown on multinational tax avoidance. That’s why we want to make sure that anyone who wants to trade into Australia is going to have to pay their fair share of tax.
We want to make sure that if a business is going to open its doors and have confidence in Australia – from here in Australia – we want to ensure they have every chance of success. That’s why we are backing them with lower tax rates, less red tape and extending the instant asset write-off.
You’ve been doing this roadshow for a little while now. How much ground have you actually covered?
We have been to every State and Territory in the time since I became Small Business Minister last year. We will continue to go on the roadshow because it is so important to go out and talk to small businesses. But it’s even more important to listen to small business. To hear what they have to say.
I am constantly talking to Ken O’Dowd, the Member for Flynn, about the things that are important to Gladstone and his wider electorate. He is a very fierce advocate for small business. It comes from being in the game for 20 years. Ken O’Dowd was a small business owner himself for more than 20 years. So he brings that experience to the Parliament and certainly he brings the issues to my table. And then I make sure that Ken gets heard and more importantly that his small businesses are heard.
We know there are some issues in Gladstone and in the wider region which are important to the decision-makers and the policy-makers in Canberra. And we are acting on them. That’s how we lower the tax rate. That’s how we extend the instant asset write-off. And that’s why we are focused on making sure regional small businesses have every pathway to success.
You’ve held the workshop this morning. Now you’re going to meet with small businesses over counters, kitchen tables, farm gates?
That’s exactly what we’re doing. And I am looking forward to going down the main street now and having a chat to a few of the local business operators. This will include people like the newsagent and others. We will be hearing their issues and more importantly listening to them and acting on them.
That’s what Ken O’Dowd does – he’s been in Parliament seven years. He’s a fierce advocate for Gladstone. He knows and has the experience of being a small business owner himself. I am so pleased I serve in the Parliament with him, with such a fierce advocate for small business as Ken O’Dowd.
With the feedback from these small businesses, is the Federal Government doing enough to help them?
Absolutely we are. The Budget showed there’s never been a better time to be in small business. And there’s never been a better friend for small business than this Government.
That’s why we have lowered the tax rate. That’s why we have extended the instant asset write-off. That’s why I am going around the country, listening to what small business is telling us. But more importantly, I am acting on it.
We are not just a Government which listens and then does nothing. We are not a Government which doesn’t get out and about. The fact that I have covered more than 40,000 kilometres in the past few months alone – visiting many, many electorates and many, many towns – particularly regional towns, I’m a regional MP myself – because we want to back them.
We know when the regions are strong so too is our country. When regional small business is strong, so too is our nation. So we want to make sure that they have every ability to succeed. That’s why we are backing them, as the Government and as local MPs.