SUBJECT/S: New Jobs Tax Cut, Small busines
WENDY HARMER: Well, it is coming up to 10 o'clock and in the second part of this little discussion we wanted to have about tax was with Michelle Rowland, the Shadow Minister for Small Business. And I caught up with her this morning when she was out at Riverstone railway station doing a bit of campaigning and I put a few questions to her.
Welcome to the program, Michelle.
MICHELLE ROWLAND, SHADOW MINISTER FOR SMALL BUSINESS, SHADOW MINISTER FOR CITIZENSHIP AND MULTICULTURALISM: Thank you very much.
HARMER: The Council for Small Business Australia, they have been lobbying the Coalition to change the definition of a small business to a definition of a business with a turnover of up to $10 million, and the Labor Party doesn't agree with that, why?
ROWLAND: Wendy, we're very happy to give relief to small businesses, for example in the form of reduced tax rates and Bill Shorten actually made that clear last year in his Budget Reply. The reality is that small businesses up to $2 million in income make up about 83 per cent of incorporated companies. So we're very conscious of targeting need where it's required by those small and emerging businesses. I must say too, Wendy, we also have consulted widely with small businesses around Australia, we recognise that sometimes the definition of small business can be confusing, sometimes for different bits of legislation it's calculated on the number of employees for example, sometimes on turnover. So one message that's come from small business to us is we really need some clarity around those definitions, so we are very happy to look at that. But I think the important thing to recognise, Wendy, is in this last Budget of the government's, it's talking about a small business tax cut but when you actually go to the tables in the Budget papers, they're talking about businesses up to a billion dollars. Now, we think that small businesses should get tax relief, that's why we support it.
HARMER: But if perhaps, raising that threshold to $10 million would put you more in agreement with the Council for Small Business Australia, and you say it's only 17 per cent of businesses, are you willing to move on that?
ROWLAND: Look we're very happy to have the discussion Wendy. But the point however is you can't just decide that small businesses are going to be defined up to a billion dollars for the purposes of the Budget and call it a small business tax cut. This has been a ruse for the government to be giving a $50 billion tax giveaway to some of Australia's biggest companies.
HARMER: Okay. But you would say that up to $10 million, perhaps that's negotiable?
ROWLAND: Look we've said we're always ready to have the discussion, it should be done in a sensible way and very happy to continue that discussion with small businesses themselves and with any other advocacy groups.
HARMER: All right then. What about this idea of a 25 per cent small business tax rate, you've been supportive in the past. What's your stance on that at the moment?
ROWLAND: We are very happy to pursue a bipartisan path towards making that happen, but it's not going to happen when you start giving tax cuts to multinationals to the tune of billions of dollars, Wendy.
HARMER: On the weekend Labor announced a $20,000 tax deduction for small business, if they employ a job-seeker aged under 25 or over 55, that's those older or younger workers, or a parent or a carer returning to the workforce. What sort of impact do you think that will have, how many jobs do you think might be involved here?
ROWLAND: We believe on our estimates this could create up to 30,000 new jobs in the small business sector. What we've done here, Wendy, is taken about a quarter of a billion dollars that's currently budgeted towards wage subsidies that we know, that unfortunately there's been quite a bad take up rate and small businesses have given feedback that the process of getting this has been too much red tape, too cumbersome. So we've had a look at this and said well we know that small businesses would be willing to take on more employees if they were given the right incentives and we know that we've got a real issue with particularly youth unemployment and also people who are over 55. People tell me they're so skilled and yet they seem to become invisible once they reach a certain age. And also people returning to the workforce that have been out of it for more than 6 months, maybe parenting or carer responsibilitie s have inhibited them from participating, we really want to target those groups and we know small businesses are great employment generators.
HARMER: Do you really think there are 30,000 extra jobs there?
ROWLAND: What we've budgeted for is actually to enable up to five new employees to be taken on with the tax breaks of up to $20,000 per worker so you can hire up to five new staff, you can get this maximum tax cut of $100,000 and that's a really significant incentive for a small business so we are really committed to making sure that small businesses have those incentives but also that we're targeting people who are most vulnerable for getting back into the workforce.
HARMER: I guess too that people would be wondering why offer these sort of tax cuts and incentives at all when there's such a big Budget deficit.
ROWLAND: What we've done is we've taken this out of existing funds, Wendy. So we're better targeting money that is already there. This has been budgeted for four years, we'll see how it goes and we're hopeful that this will end up having a good impact and in that way we can see this money will have been well spent.
HARMER: All right. Thank you very much, Michelle.
ROWLAND: My pleasure.