Kerry Rea (Bonner, Australian Labor Party) Share this | Hansard source

I too rise in support of the legislation before us today, the Tax Laws Amendment (2009 Measures No. 1) Bill 2009, and I do so because I have a very strong view that this nation and this government should be supporting small business in any way that they can. Small business is basically the lifeblood of this country. In every electorate across the country, we have small businesses that are the mainstay of our local communities—whether they are the petrol station, the fish and chip shop, the newsagent or the tradesmen who out there doing business, renovating and doing important building jobs. No matter what sector of the community we look at—as both individuals and citizens concerned about our local economies—it is small business that holds together the very fabric of our local communities and our national community. That is why I am very pleased that the government has decided to bring in this legislation to introduce a 20 per cent reduction in the PAYG tax instalments for the December quarter of this year. Not only is small business the most important sector of our economy, creating jobs and keeping cash flow moving throughout the nation; it is also the key indicator of when the global financial crisis is really hitting hard. If small business starts to be seriously affected by this financial crisis, it will really bring home to our local communities just how vulnerable we can be at times like these.

There is no doubt that we are in a global financial crisis. There is no doubt that we are facing an economic cyclone that we have not seen since the Great Depression. Whilst we use these grand terms, whilst we talk about the situation, whilst we all keenly watch the financial reports on television, whilst we look in the newspapers at how the share market works and whilst we may have many concerned discussions in corridors and over coffee tables about the collapse of Lehman Brothers or about Freddie Mac and Fannie Mae, for the people of my electorate of Bonner, it is when the local takeaway stops delivery services because their customer numbers are down that it really starts to hurt. It is when the local newsagent puts off the high school students it employs on a casual basis on Saturday mornings that people really start to take notice of what is happening. It is when the video shop is not employing as many young people—those university students who rely on part-time jobs to basically feed themselves each week—that it really comes to the crunch and people start to realise the significant impact of this financial crisis. What does that mean? It means that the government has to do something to support small businesses and to keep the economy moving through stimulus. It is important that we create a level of flexibility in this current financial year. It is important that we allow small businesses to have an even greater cash flow in order to keep their heads above water.

It is also significant in terms of these amendments to acknowledge the extraordinary times that we are in. Whilst PAYG instalments are determined by the tax commissioner and basically are a reflection of what a small business is expected to pay in tax over a full year, based on their income, I think we would all agree in this chamber that on 1 July last year nobody in this chamber, or indeed out there in our local communities, would have expected this level of fluctuation in our economic situation to occur in just a few short months. I think it is quite practical to accept that none of us can really predict what the actual income of many of our small businesses will be up until the end of this financial year. Introducing a bill that enables small businesses to take a 20 per cent reduction over the December quarter will give them the cash flow that they will need to keep their heads above water over the next few months and, therefore, will have an ongoing effect in terms of support for the local economy right throughout our communities.

I cannot stress enough how important small business is and I cannot stress enough how important measures like these are for our local small businesses. It is quite telling when you look at the figures for small businesses across the country. In my electorate of Bonner alone roughly 30 per cent of businesses employ fewer than five people. That is significant. Almost half the businesses employ fewer than 20 people. If we do not continue to support small business to create stimulus in our economy, we are facing not just a cyclone but an economic tsunami. It really comes down to supporting those families out there who are struggling.

As we know, small business people are from ordinary families who are just trying to keep their heads above water. They are not the people who are cashed up, they are not necessarily sitting on massive assets and they are not in the financial position that most of us are in to be able to tide ourselves over at a time like this. They live from week to week and from month to month, so any form of financial support that allows them to keep their cash flow moving is quite significant in keeping those businesses alive. I know this from talking to many small business owners in my electorate, like Irene, the Ukrainian woman who runs what I think is the best deli in Wynnum and provides the best sauerkraut, German sausages and smoked meats I have ever eaten—

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