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

As shadow minister for small business, I am pleased to rise to talk about the policy that is before the House today, the policy that Labor is introducing as part of its pitch to the small business sector. We know—it is often quoted and has perhaps become a cliche but for good reason—that small business is the engine room of the Australian economy. Right now there are about two million small businesses out there, employing around 3.8 million Australians, who are doing it tough. They are doing it tough for a variety of reasons. No doubt the global economic crisis is one of those reasons. But, in many respects, they are doing it tough as a direct result of this government’s failed and flawed policies that are not only not assisting small business but actually making it tougher for small business.

I noted what was said by the member for Lindsay, who spoke before me. He raised a whole raft of different points, and I would like to embrace some discussion on a couple of those points. I found it most fascinating that the strongest argument the member for Lindsay could put forward about what the Labor government was doing for small business was to talk about how the first home owners grant was providing a floor underneath home values. The member for Lindsay came into this chamber and said, ‘I recognise that a couple of small businesses’—can I say to the member for Lindsay that it is not a couple; it is the majority of small businesses in this country. These are men and women who put their very houses at stake, who take real risks out there to generate value and to employ Australians. They do it with their houses at stake. It is not ‘a couple’; it is the majority, Member for Lindsay. And if you had any conceptual understanding of the real risks that these small business men and women face when they make a decision to open a shopfront or to employ an Australian, you would understand how pithy it is for you and other Labor members to say to them, ‘Well, we have made it a bit easier for you because we have put a floor underneath your house values through the first home owners grant.’ What an indictment of the Labor Party that that is one of the strongest arguments that Labor can come up with about what they are doing to assist small business in this country. It is no wonder that Australian small business men and women are looking at this government and shaking their heads in disbelief.

The measure that we have before the chamber today in many respects demonstrates how completely out of touch the Labor Party is with small business. It is bad enough that we have union hack after union hack after union hack coming into this chamber trying to talk about how much they understand small business. The reality is that the closest most Labor members have gotten to a small business is when they have walked in the front door to buy a coffee. That is about as close as most Labor MPs get to small businesses in Australia.

The measure that is before the House today is an interesting measure. It is an interesting measure because it is, for all intents and purposes, largely a copy of a policy announcement that I made months earlier. When I was going around Australia talking to small business representatives—small business lobby groups, peak advocacy groups and, most importantly, the men and women who run small businesses—they were saying to me: ‘Look, you have got to understand that we are under massive cash flow problems—massive cash flow pressure. What we need is government policy that will help to alleviate the cash flow problems that we have as small business owners.’

So, on the basis of that, I put my head together with that of the Leader of the Opposition and we came up with a pretty good policy that would directly go towards assisting small business owners. We knew that small business owners were saying to us: ‘Look, we don’t really know how bad this economic downturn is going to be. We don’t really know what the impact is going to be on our revenue figures. We don’t really know what is going to happen with our costs. We would like to be able to vary our PAYG instalment payments so that we can basically make an educated guess but, if we get it wrong, not be penalised.’ The current law is that a small business owner, when making their PAYG instalment payments, can have a margin of error on their variation of up to 15 per cent. If the margin of error is in excess of 15 per cent, the tax office penalises them for getting it wrong.

The Leader of the Opposition and I announced on 20 November last year a proposal that said: why don’t we double the margin of error from 15 per cent to 30 per cent? By doing that, we can ensure that small business owners retain control of the variation they seek on their PAYG instalment and, if they get it wrong—because these are unique economic circumstances in relative terms—they are not going to get whacked around the head by the Australian Taxation Office. That is the policy that I announced on 20 November. So, lo and behold, with the Labor Party completely bereft of policies, the small business minister went to the Labor Party policy cupboard labelled ‘small business policy ideas’, opened the doors and found nothing there. It was just staring back at him. Then the Liberal Party announced a policy and the small business minister said: ‘Thank goodness! We can have a policy now. We will just copy the Liberal Party policy and tweak it a bit.’ That is what happened. The Labor Party went out there and announced their policy, and they said, ‘What we’re going to do is to give every small business in the country a 20 per cent deduction on their PAYG instalment.’ It sounds reasonable, except for a couple of problems. It is an inferior policy to the proposal that was put forward by the coalition, because not every business wants a 20 per cent deduction.

Under Labor’s policy, with a 20 per cent automatic deduction coming through on, for lack of a better term, invoices from the Australian Taxation Office on the PAYG instalment, you could be a business that has actually had a revenue increase.

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