Business NSW report shows worst rate since pandemic | Sunrise

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[00:00:00]The worst since COVID, that's how business [music] sentiment is being described in the wake of those major tax changes in the federal budget. According to a survey from Business New South Wales, confidence levels have now sunk to minus 78, [music] the lowest levels since March 2020. Now, there are some concessions [music] for business owners. For example, if you've owned your business for 15 years, you are over 55, >> [music] >> and you're retiring, then you won't be charged capital gains tax when you sell.

[00:00:31]But, you'd need to tick all those boxes for that concession, [music] and there are a lot of people out there who fall outside those conditions. For more, let's bring in Social Services Minister Tanya Plibersek and One Nation MP Barnaby Joyce. Good morning to both of you. Tanya, >> Morning. there still seems to be a lot of confusion about who will face higher taxes and who won't. So, let's use a bit of an example for people. Say someone had a plumbing business with half a dozen employees, they are 50 years old, they've had the business for about 10 years, they turn over a little over $2 million a year. If that person wanted to sell for retirement, are they paying more tax um on these changes?

[00:01:13]Oh, well, Matt, I'm not going to get into individual cases. That's unreasonable. I don't know the details of the cases, but let me say this.

[00:01:20]Uh a lot of the reason that people are worried here is because they don't know the positives in the budget for small business. So, there's 3 and 1/2 billion dollars of investment to help small businesses with the $20,000 instant asset write-off being made permanent, uh tax cuts for sole traders, 2-year loss carryback. There's a whole range of things that are positive. When it comes to capital gains tax, as you pointed out, Matt, this only applies when you're selling your business. There are a whole range of carve-outs like the one you described, but that's not the only one.

[00:01:52]And what we're doing is moving from a situation where the discount um on capital gains is a flat 50% to a discount that's based on inflation. So, there's still a discount in there. So, I'm not going to give individual uh advice. That's for your your accountant and your and your lawyer. Um but, there's a lot of positives that are being ignored, including by the people who are making these memes, who are going around, who admit that they're lying, and just say, "Oh, doesn't matter. It's all about getting some attention." The reason they want that attention is cuz they're part of the the um the the group that are benefiting most from this. 87% of the benefits of this go to the the 10% that are making the most money. This is not uh this is not going to have um the impacts that you're talking about on your average kind of plumbing business or fish and chip shop. In fact, they might be better off under the the new discounting arrangements on capital gains tax that we propose. Okay, so a lot of people go into business, and they aim to make a lot of money and sell it one day, either for them or for their family. If you don't fit into this uh basically holding the business for a long time, for 15 years, and you're over 55. If you don't fit into that, if you're doing it while you're younger, um and you are selling your business, will you be paying more tax under your government?

[00:03:15]Well, Nat, and like I keep saying to you, I can't give you individual instances, how long they've held it, uh what the um what the inflation rate is during the years that they've held it.

[00:03:25]It's not reasonable to just to pluck numbers out of the air. But, what you are ignoring uh several elements here.

[00:03:32]The first is this doesn't start tomorrow. It doesn't start till next year, so people have plenty of time to get advice and understand the detail. The second thing you're ignoring is all the positives in the budget for small business, three and a half billion dollars worth of investment to help uh small business.

[00:03:47]And that'll include uh places they they go for advice on what's going to be the best situation for them.

[00:03:54]And you're also ignoring the fact that there will still be a capital gains discount when you sell your business. It's just that that discount will be based on inflation. It won't be a flat 50% discount. I mean, I think uh the it is very complicated for most people because most people um will never be impacted by this. So, they're struggling to understand something that will never touch them in their lives. So, I I just want to be a little bit cautious about what you're urging me to do, which is offer kind of, you know, financial and accounting advice so on the basis of partial facts. Yeah, but I guess people out there want to know. Uh and as you rightly said, people are going to their accountants and their lawyers and trying to work it out. And the bottom line, Barnaby, seems to be people want to know that when they sell their business, are they going to be paying more tax? And yes, the main thing was funny for a lot of people, obviously not for the Prime Minister, but it was it was funny and it got people's attention, but it was wrong, you know, essentially. But people don't But also, Tanya, people don't know what's right. And and it's And you're not telling them what's right, either, because you're saying it's too complicated. No, no, Tanya, Tanya can't Tanya probably doesn't know. But that's why it's important that we've got that they get advice. Okay, That's why we've got to have Okay, so what we've got here is people out there but Tanya says, "I don't know how good it is for them." And Tanya can't explain it. And that's that's basically it. And nobody else can understand it. What I do understand is the clearance rates on houses have gone dropped through the floor in Sydney on the weekend, down to about 50%. What I do understand is the pressures that are going to be coming on people. They say in by Christmas could be the worst in the in the last two decades. That's out this morning. What I don't understand is the budget because I cannot explain it and they sort of What are we going to walk around with the solicitors and accountants to try and decipher the Labor Party budget? What we I do understand is the answer to your question is that if you've had the business, have you 50 years old, that's what you said, and you've had the business for 10 years, that is what you said, you will pay more tax. There you go. There is an answer. And I'm in One Nation, you will pay more tax. It's very easy, you just let it come out of your mouth. It's called the truth.

[00:06:10]>> a number of capital gains tax exemptions And what you've said is don't worry.

[00:06:15]People He's saying to people, don't worry cuz it's not coming for 2 years.

[00:06:18]That's like saying, oh you have a year to 2 years. It's like saying, don't worry about being on the railway line cuz the train is a little way off. The train is a little way off. Well, why can't you explain it to them now?

[00:06:29]Why can't you explain it to them? Your job is to explain it to them. The Treasurer and the Prime Minister to explain it to them. And the more they explain it to them, they talked a lot at the start and explained nothing. So, let me help you out. Okay. Let's move on to this. There is there is support for this. Let's talk about the Productivity Commission chairwoman. She says she supports the changes. She also says the money the government saves from this must be used to reduce income tax. Apart from the $250 payment that we're getting in two people are getting in two years, will you look at reducing income tax because she's basically saying that's the other half of it that hasn't been done.

[00:07:10]>> How are you doing that? Besides the $250 Well, we're doing that. We've we've given we've given one tax cut already.

[00:07:17]There's another one coming and another one next year. So, that with the $250 and the $1,000 instant write-off, an average worker will get a $2,800 tax cut because of the changes that we're making. Yes, that's one of the reasons that we're making changes to our tax system because people on wages and salaries who pay their tax every fortnight, Uh they've been getting the the raw end of the stick compared with people who are making profits uh on on shares and other assets. The wage and salary earners have been paying a larger share of the tax burden than they should. That's why we're making sure that they get five tax cuts. But will you be giving the proceeds? We know you've done tax cuts in the past, but what what she was I think saying, will you be giving the proceeds of what you raise in these changes back to the worker in income tax cuts besides the 250, which I don't know whether that's going to buy a loaf? No, no they won't.

[00:08:15]No, they won't.

[00:08:16]>> Well, the the 250 is important, but 2,800 is the tax cut that your average worker is getting.

[00:08:22]And the 1,000 is not going 2,800. Is it 10 times more >> don't you just be straight? The answer is no. Okay, Barnaby.

[00:08:29]Barnaby. The answer is no. 2,800 is the answer, Barnaby. You you can't let me speak. The answer is no.

[00:08:34]>> 2,800 is the answer. It's really simple.

[00:08:36]It's just called the truth.

[00:08:38]You lost that argument. It's all over.

[00:08:40]See, that is bad habit of not telling the truth. The answer to that question is no.

[00:08:44]>> 2,800 is the answer. The answer is the 250 is From these changes, Tanya. The instant write-off does not cover it. No, see Tanya just said no. The answer to the person who's 50 years old and been in business for 10 years and whether they're going to pay more or less tax, the answer is not I don't know. The answer is yes, they will. We'll just practice the truth there. Now we'll practice it every morning.

[00:09:05]>> Okay, and Tanya says we that is being given back, so that does fly in the face of some It's not the truth. something in It's It's just not the truth. in the public arena.

[00:09:16]2,800 better off because of the changes that we're making. And it doesn't matter how much Barnaby shouts and raves.

[00:09:25]>> Tanya, it's just that we have we have Okay, we'll leave it there. We've got to get to the You you got to have you guys lying. Thank you. Thank you very much.

[00:09:31]We'll see you next week. Here's Shuba.