Dr. Peter Varela

And it also, if you take that sort of treasury line, it's good for taxes.

Migrants that earn a lot of money

pay more in taxes and receive less in government transfer payments.

And that sort of saves us having some fairly hard trade-off discussions about tax policy.

If we get the migration program working well, we don't have to raise as much in tax, so we can sort of give out more in government spending programs.

As you mentioned, I now know as much about this policy as you have just informed me of over this.

This has happened very, very recently.

And the extension of the existing small business rules to a higher threshold, I would have to go and think very carefully about how important this was, just in practical terms.

No, exactly.

The case that I made on Monday, very similar to the case that E61 made in the same session, was that we already have some concessions in the tax system for small business.

Now, different people get excited about small business.

There's questions about productivity that comes out of small business.

There's questions about competition that comes out of small business.

The tax economist also says you also have to worry about compliance, that if you give a tax concession to a particular group, you all of a sudden have to worry that people will do things in order to get those sort of tax concessions.

No, exactly.

Businesses do have discretion about how they set themselves up.

And there will be sort of every time you change these business tax rules, there's sort of a discussion about how businesses will react.

Now, the other really important insight here is to kind of split out the founders versus the return to sort of

capital investment in these small firms.

So founders, the people who are working, putting their labor into these firms, are taxed at a significantly lower rate than the alternative, which is labor income tax rates.