Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Hansard source

It certainly does sound like the minister has a glass jaw! Mr Glen Mobbs of Tully Motel went on to say:

In short, since we bought this business the time that we spend actually working on the business has diminished in favour of increased time spent on government required activities that don’t generate wealth or wages. This is in addition to statutory requirements to collect various taxes for yourselves.

That brings me to the next point: only the Treasurer could have designed a GST that has to raise $185 billion—that is nearly 20 per cent of GDP, by the way—in order to collect $37 billion. There is a huge difference between $185 billion and $37 billion, and that gulf is represented by the GST compliance burden on small business, about which this government is virtually indifferent. The government says in the budget that it is going to make some changes. It said that it was really its idea in the first place. But it was not; it picked up the ideas in the ratio method, which the Treasurer had been ridiculing for five years and as recently as two weeks before the budget.

I will finish Mr Glen Mobbs’s letter. He says:

... with each step taken forward from increased administrative efficiency we seem to take two back from increased demands from various levels of government for information. It is becoming an increasingly heavy burden for one part-time administrator to bear.

Hear, hear, Mr Mobbs. Labor will introduce a clearing house so that small business does not have to grapple with the compliance burdens of superannuation choice. Why won’t the government support that? Because it is indifferent to the plight of small business. This government believes that the small business community is its own and that by running around saying, ‘Labor’s reintroduced unfair dismissal laws,’ all small business people will flock to this government. But they are smarter than that, because they know the biggest issues are the compliance nightmare, the huge burden that this government is imposing. That burden shows up right across the economy.

That is why Labor has said that we must lift productivity growth in this country by investing in education, including higher education; by investing in a national high-speed broadband network that is especially valuable for small businesses in regional areas; and by genuinely, truly cutting red tape for small business. Again, Labor leader Kevin Rudd, in his National Press Club speech, announced a series of measures where we will work with the states to reduce the small business compliance burden—as Charlie Bell called on this government to do 10 years ago. When responding to the Banks report last year this same government repeated the commitments that it had made 10 years beforehand—a commitment to cut red tape by 50 per cent in its first term, which it never intended to keep. It then introduced this GST that collects $185 billion in order to collect $37 billion. So much for cutting red tape for small business! It has absolutely inundated small business with red tape. No wonder our productivity growth has slumped—and it truly has slumped.

There was an article late last week in the Australian Financial Review by Mr Michael Knox. He suggested that maybe there is no productivity slump at all, because if we in fact deflated GDP not by the GDP deflator—which you would think you would—but by the CPI then there would be no productivity slump at all. This is the sort of argument or excuse that this government tries to get away with itself. The Treasurer said recently, on 1 November last year, that productivity growth is ahead of the previous productivity cycle so there is no problem. This fellow, Mr Knox, says there is no problem. I had a look at the consequence of deflating the numbers by the CPI rather than by the GDP deflator. This man has managed to wipe away the entire productivity miracle of the 1990s. Instead of productivity growth being well above two per cent during the 1990s, if you use Mr Knox’s preferred measure then it is only 1½ per cent. That is not particularly good at all. If you do a little bit of mathematical manipulation you get the result that the government wants—there is no productivity problem. If the government does not recognise that there is a problem with productivity growth, you can hardly expect it to do anything about it. And it does not—the government does not believe that there is any problem with productivity growth.

Then the Treasurer said, in response to Labor—to the shadow Treasurer and the opposition leader saying that the budget forecasts for this current year showed that productivity growth is zero this year and 1¾ per cent in the out years, after next year—‘You will not find anything in the budget papers revealing that.’ But at page 1-5, table 2, if you take, from growth in real GDP, growth in employment, you get, in the current year 2006-07, zero. Then you get a bounce-back of 2¼ per cent next year—that is understandable; if you are on the floor it is not hard to get off the floor—and then 1¾ per cent thereafter.

The Treasurer did not even know that these figures were in his own document. How on earth can you expect a government to do anything about productivity growth—tomorrow’s prosperity—if it does not even know what the figures are in its own budget and if it does not even agree there is a productivity problem in this country? There is, and it is only through the election of a Rudd Labor government that this country can expect any improvement in productivity growth or any improvement in prosperity beyond the mining boom, because this government’s best days are well and truly behind it. This government has sold out on small business and sold out on Australia’s future. (Time expired)

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