Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Hansard source

How fitting that the Minister for Small Business, Independent Contractors and the Service Economy in a speech on small business did not mention small business until page 6 of a seven-page speech. This symbolism truly represents where small business sits for the Rudd government: tucked away neatly somewhere towards the back. The reality is that this ministerial statement has more to do with this minister’s aspirations to be Treasurer than it does with providing leadership, not to mention any assurance, to Australia’s small business sector.

The Minister for Small Business, Independent Contractors and the Service Economy and aspiring Treasurer says that the Rudd government has stabilised the financial system. Perhaps the minister should explain this so-called stability to the 270,000 Australians with investments in unguaranteed mortgage funds and cash management trusts. These Australians, many of whom are small business men and women, have had their savings frozen as a direct consequence of the Rudd government’s rushed and bungled decisions on the unlimited bank deposit guarantee.

The minister, as if preparing his resume, detailed his so-called long-term economic reform program. I will leave it to my colleagues to highlight the minister’s error in claiming last week’s COAG meeting will miraculously solve all of Labor’s mismanagement when it comes to health and education. Certainly the minister’s suggestion that the business regulation changes announced at COAG are the white knight that will carry Australia’s small businesses through the global financial crisis is misleading at best and fanciful at worst.

Indeed, COAG has been working to reform 27 different areas of regulation that reach across state borders. While these reforms are welcome, they are reforms that benefit Australia’s largest businesses. The minister quoted extensively from the Business Council of Australia. The Business Council of Australia is an association of CEOs of 100 of Australia’s leading corporations. We would expect that they would welcome the 27 regulatory reforms that were announced at COAG. While the coalition certainly welcomes business deregulation, the Rudd Labor government’s attempts to pass this off as not for big business but as somehow the government’s golden gift to small businesses is a cruel hoax on the part of the Rudd Labor government.

According to the Australian Bureau of Statistics in its latest Counts of Australian businesses only 24,444 small businesses, or about one per cent of all small businesses, operate in more than one state. So, for the other 99 per cent of Australia’s 2.4 million small businesses, the government’s big business deregulation agenda is of little interest, of little benefit and of little assurance. What we see here is another case of the Rudd Labor government talking without actually delivering. I was most interested to hear the minister describe the potential benefits of a new national electronic conveyancing system. According to the Rudd Labor government, this could save homebuyers up to $400 on house purchases. This $400 may go some way towards helping to pay the thousands and thousands of dollars of stamp duty and land taxes which have been the hallmark of this very government’s state Labor colleagues. It is not lost on the Australian people that today we saw widespread reporting of the fact that paying Labor stamp duties requires up to three months of an annual salary. Again, we see Labor is very good at making announcements but it cannot quite deliver any meaningful outcomes to Australia’s small business sector.

Indeed, the real work on delivering meaningful red tape reduction has been left to the opposition. On 20 November I was pleased to announce a coalition policy to help small businesses better manage their cash flow. The coalition believes our small businesses deserve genuine policy responses to the challenges of operating in these difficult economic times. They do not need more photo opportunities and talkfests with the Prime Minister hopelessly out of touch with Australia’s small business sector. Cash flow in many small businesses is being burdened by PAYG instalments, which are likely to have been calculated on revenue from brighter economic circumstances. The coalition believes that varying PAYG instalments is an important way small businesses can manage their cash flow more ably. While variations are allowed currently, if small businesses underpay their instalments by 15 per cent or more, the tax office will apply a heavy penalty. The coalition has therefore called on the Rudd Labor government to double the allowable margin of error in PAYG instalment variations from 15 per cent to 30 per cent. This means that small businesses can then vary their PAYG instalments with more confidence, without the fear of being unreasonably penalised by the tax office. If the minister, and indeed his government, were genuinely concerned with providing genuine assistance to Australia’s small businesses and helping to maintain the jobs of those 3.8 million Australians that they employ, they would implement this coalition policy without delay.

In his speech, the minister said: ‘The first set of incentive crushers comes from the tax system.’ The coalition recognises this and only the coalition has a track record of delivering tax cuts. The coalition, under the previous Howard-Costello government, delivered tax cuts in 2000, 2003, 2004, 2005, 2006 and 2007. That is the coalition’s track record on delivering tax cuts. On the other hand, the Rudd Labor government deliberately targeted small businesses with tax increases in the May budget. I would particularly draw the attention of the House to the additional family income test which was placed on the entrepreneurs tax offset. The entrepreneurs tax offset provides a 25 per cent tax offset for small businesses with annual turnover of less than $75,000 and begins to phase out for turnover greater than $50,000. The Rudd Labor government introduced an additional income tax test for the entrepreneurs tax offset that took effect from 1 July 2008. This measure deliberately and unfairly targeted families that work in small business. For example, under Labor’s new rules, a wife who earns just $42,000 a year working in her own small business as, say, a hairdresser—will be whacked with a massive 25 per cent tax increase as a direct result of this new Labor tax on small business if her husband—for example, a plumber—is earning $79,000 year.

Why have Labor so unfairly slapped working partners and small businesses with such a harsh new tax? The reality is that Labor just do not understand small business. This is another example where the Rudd government say one thing and do another. They say they believe in lower taxes, the minister says the tax system is crushing incentive, but what is the actual result? The Rudd Labor government policy actually crushes the incentive of small business even more than it did previously.

But we should hardly be surprised at the attitude of the Rudd Labor government towards tax reform. Indeed, all Australians should remember the declaration of our current Prime Minister on 30 June 1999, when he said about the previous coalition government’s very bold and significant tax reform package:

When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice—an injustice which is real, an injustice which is not simply conjured up by the fleeting rhetoric of politicians. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up.

Has the Prime Minister miraculously transformed from his previous cynical position into a tax reformist in the last eight years? Most certainly he has not. The Prime Minister has, however, become very clever at saying one thing and doing another. The honesty with which he came to this House on 30 June 1999 has vanished. In its place we now find as a hallmark of the Rudd Labor government a commitment to putting talk, spin and news headlines ahead of actually delivering for Australia’s small business sector. Similarly, the minister says the government has provided $42 million to support 36 small business contact points. What the minister neglected to say, however, is that the Rudd Labor government also axed in its most recent budget nearly $1 billion of small business advisory and support programs. Included in that $1 billion of axed small business programs was the Small Business Field Officer Program, which delivered 65 small business contact points right across Australia at an annual cost of some $7.2 million.

So we have the situation in which the Minister for Small Business, Independent Contractors and the Service Economy scrapped 65 small business field offices which cost $7.2 million annually and replaced them with 35 Business Enterprise Centres at an annual cost of $10.5 million. I note that in the Senate estimates hearings that were held earlier this year the minister’s department was unable to identify one single activity which would be undertaken at a Business Enterprise Centre which was not already undertaken by the coalition’s small business field officer program. So you could forgive small businesses for asking the minister to explain why the Rudd government was spending $3 million more each and every year to provide the same services at nearly half the contact points that existed previously.

This Labor government’s commitment to spending more on getting less is a telling story for those small businesses who wondered how a government could possibly take a budget into deficit while the economy was forecast to grow at two per cent. Perhaps this is according to the Sensis business index, the No. 1 reason why support for the federal government’s policies has collapsed by 57 percentage points since the election of the Rudd Labor government. There is a belief that there has been economic mismanagement by this government. Quite extraordinarily, the government is spending less today on small business advisory and support programs than the federal government was this time 12 months ago—before the global financial crisis was on the doorstep of our small businesses. Once again, what we see is that the Rudd government’s talk does not match their actions.

Another case in point has been the government’s disastrous broadband policy. The minister said in his speech that ‘the government will roll out a national high-speed broadband network across Australia’. I am certain that there are plenty of small businesses across Australia that are starting to ask, ‘When is this going to happen?’ This is a prime example of where the Rudd Labor government’s rhetoric has far outbalanced their results. As my colleague Senator Minchin said in the other place, the Rudd government had a broadband election sound bite with no sound public policy to support it.

Despite the promises of the Prime Minister and the promises of the minister’s colleague Senator Conroy, the Rudd government has failed to deliver its election commitment of selecting a builder for the national broadband network within six months of coming to office. Instead, it has taken over double that and we are still waiting. The government is already at least six months behind schedule in commencing network construction before the end of 2009 and offering new services over the new network.

The Rudd government scrapped the coalition’s OPEL broadband project for rural, regional and remote Australia despite having no alternative to it. Using WiMax technology, this network would have delivered metro equivalent services to around 750,000 underserved households and small businesses across the country. According to the Age newspaper of 24 June this year, ‘Labor’s election pledge to appoint a National Broadband Network builder by the end of the year is in tatters because of another extension of the bid deadline and a trebling of the expected construction costs.’ Once again, despite all the talk, all the spin, all the headlines and all the commitments, there has been no delivery from the Rudd Labor government.

The minister said in his speech, ‘From today, for contracts of up to $1 million, Commonwealth government departments will pay small businesses within 30 days.’ That is a statement that is big on announcement and little on delivery. That is a statement that, consistent with this Rudd Labor government’s priorities, is about headlines and not about substance. This announcement had an air of familiarity about it. And indeed it does. Some 572 days ago, on 10 May 2007, the minister at the table, together with the Prime Minister, issued a press release titled ‘Real action to cut business red tape’. I quote from the release:

Labor will make sure that all government departments are meeting their commitments to small business.

It also says:

Labor will give small business the right to charge Commonwealth Government departments and agencies interest on bills not paid within thirty days.

Perhaps the media release should have been titled ‘Real inaction to grow business red tape’, because since the Rudd Labor government was elected the number of federal government departments and agencies which are paying small businesses on time has decreased.

According to the survey of Australian government payments to small business, in October 2007, under the previous coalition government, 95 per cent of all invoices to small businesses were being paid within 30 days. Yet 12 months later, on ABC TV’s Insiders program on 26 October this year, the minister at the table said that only 92 per cent of invoices to small businesses were being paid within 30 days. So the minister says that the Rudd Labor government will increase the percentage of government invoices paid on time to small businesses from 95 per cent to 100 per cent and yet the reality of Labor’s policies is that the percentage has gone backwards to 92 per cent. Once again, there are no results behind the rhetoric of the Rudd Labor government. After 12 months in office, the Rudd Labor government has failed to deliver on this election commitment. It is little wonder that the Sensis business index reports that only nine per cent of small businesses believe that the Rudd government’s policies support them. But if there is one way that the Rudd government knows how to fix a problem, it is to talk about it. According to the Rudd government mantra, talking and watching fix everything.

At their grand small business talkfest in Brisbane on 24 October, after the minister had personally called people begging them to get over their Rudd government summit fatigue and come along, the Prime Minister said, ‘What I’d like to propose today is a government guarantee to pay all of the federal government’s contracts up to $1 million to small business on time, within 30 days.’ What I would like to ask is this: did the Prime Minister forget that his name was on top of a press release proposing exactly the same thing 18 months ago? Here we have the Prime Minister and the minister coming into the House to announce for a third time now that under a Rudd Labor government small businesses who deal with the government will be paid within 30 days.

I will give this guarantee: small businesses out there are hoping that this Rudd Labor government gets it right third time lucky. Far from meeting their election commitment to make things better, so far the Rudd Labor government has only made matters worse. I will conclude my comments by quoting the Prime Minister, who recently in fact made this statement in his address to the small business summit in Brisbane. He said: ‘There is no government policy that is going to make running a business easy.’ That is going to be the case for as long as Labor is in government. (Time expired)

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