Transcript – ABC News 24: Small business tax cut, unemployment
The unemployment rate has gone up to 6.4% today. That must be very disappointing?
It is higher than what the market expected and certainly higher than what we are aiming for. But we did forecast the risk of an increase in unemployment. That has been reflected in the Mid-Year Economic and Fiscal Outlook.
This is why we want to get on and implement our economic action agenda.
We know that just the set and forget approach of Labor is not the prescription that is needed and that is why we need to get on with our work and the figures are a stark reminder.
The signs in the economy are not good at the moment, this unemployment rate up and the cash rate down. The Reserve Bank thinks the economy is in trouble.
I contest that as a general statement.
There are green shoots in the economy. What we are seeing is very strong job advertisement numbers – they are the highest they have been in years. We are seeing buoyancy in the housing and construction sector. Retail has been seeing some improvement.
Small business for instance – we have had the highest number of companies formed this year, up 10%.
So there are green shoots, but we know it is spotty and we know in some areas consumer confidence and business confidence is really more fragile than it needs to be for the economic growth and the job opportunities we are working for.
Let us go to small business which is your portfolio.
I have done a little bit of research. I find that there are at least seven different definitions of a small business in government legislation. Are there more than that and how will you define it for a small business tax cut?
Yes there are more definitions. Some of them look at turnover. Some look at profitability and taxable income. Some talk about headcount and the number of people in the enterprise. Some even look at a transaction value. There are quite a number of them and that adds to the confusion.
But it is also why we are focusing on small business.
Trying to streamline some of that so there is clarity in policy development and implementation.
As the Prime Minister has made it clear in his Press Club speech, small business, the jobs and the economic buoyancy they create is a real focus for us this year and has been for me for many years as you well know.
Can you tell us how you will define it because that will be very important?
We are working through that.
We have got to look at what we can do to implement the tax cut that the Prime Minister announced at the Press Club. What we can do to go further because that was the indication that the Prime Minister gave, at least 1.5% – but there are a whole range of different entity structures through which small businesses operate.
Not all are companies. You have got sole traders. You have got those operating through partnerships. Those independent contractors and the self-employed – we are looking at what we can do to energise enterprise.
Because of course, a lot of small businesses are not incorporated which means they do not get the benefit of a tax cut, so what are you going to do for them?
We have done plenty in the area of reducing their costs- that is what the Carbon Tax was all about, and we have got other red tape reduction measures, competition law changes, getting franchising going. So there is a lot going on.
In relation to tax, that is where the challenge is. Recognising that that eclectic diverse fantastic group of men and women that are enterprising Australians, organise themselves in different structures and that is the focus of our work.
But we will end up with a two-tiered tax system which will create more red tape.
Let us not get ahead of the announcement. We have got different rates in different areas right across the economy.
Just today I was happy to improve the Budget bottom line through work through the House of Representatives on the Research and Development tax concessions. They operate at different levels.
Ironically, Labor wanted to give a $1.1 billion gift to the biggest businesses in town while we are trying to focus our energy and resources that are scarce on small and family enterprises where we think the job opportunity and growth drivers will be into the future.
But will you not face real complaints from large business if you open up that gap in the tax system?
We need to do what we can get done given the Budget conditions. It is clear that we want lower, simpler, fairer taxes but it needs to be financially sustainable.
We would like to do a whole lot more in a whole number of areas.
What we want to do is get on with that process, make a start. Make it clear that that is our intention, provide the incentive that we can afford and that will energise the economy at the small business end of town, get the jobs out of it.
That is what we are on about and I am enjoying the input that I am getting from many in the small, medium and big business community about how we can best do that.
When then will we see the output? Will we have to wait for the Budget or will you be telling us something about this before we get to the Budget?
My aim is to make it clear what the package involves, some of the detail policy calibrations that you and I were just talking about earlier – they will become clearer over time but the way we fund it will be a Budget announcement measure.
If you could have me back I am more than happy to talk about it.
More than happy to have you come back.
I think it is important that our policy commentators, the media, the broader community get behind small business and family enterprises.
This discussion is important. It is about the future of our economy and the vitality.
Certainly you would understand too, and this is what I think is where we absolutely need clarity – one of the criticisms of the Government the last time around is that first and foremost before the Budget we need to know how you define a small business.
Absolutely and that work is continuing.
I know of the definitions and many more not on your list and that creates confusion.
What we need is certainty and surefootedness.
That is what I have been offering through implementing all of our election policy commitments.
This important opportunity to energise enterprise at the end of the economy that gives us the vitality in our community and our best prospects for jobs growth.
That is our focus and that is where our work is.
Bruce Billson thank you.
Good to be here.