Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

This is good legislation because it provides businesses with a much needed cash boost that can be used to purchase new assets which in turn will add to business efficiency and productivity and thereby further stimulate the economy. It was only last Wednesday that this legislation was being discussed at length by financial commentator Paul Clitheroe and leading talkback host Leon Byner on Adelaide radio station FIVEaa. They were speaking of the benefits of this legislation to the business community generally with the only proviso that they did not know whether the opposition was going to support it or not. Australia’s 1.9 million small businesses employ almost four million people and their ongoing viability will be crucial to Australia’s economic recovery and Australia’s economic growth.

The Rudd government understands the important role of small and medium businesses, and the provision of a bonus tax deduction for capital purchases adds to a number of other support measures for small and medium sized businesses already committed to by the Rudd government. I want to go through some of those measures, which include reduced pay-as-you-go tax instalments in the year 2009-10 and $46 million funding for some 36 business enterprise centres around Australia. Again, this is something the previous government never ever did. It is the first time ever that a federal government has supported small business through investing in BECs around the country. There is an on-time payment guarantee that commenced in December 2008, which means that small businesses that contract with government departments will be paid within 30 days or penalty interest may be charged by the small business—and we know how many small businesses are dependent on government contracts.

Cutting red tape by targeting 27 areas of state and federal regulations affecting businesses—I heard the member for Moncrieff talking about how this has to be done. Again I ask the question: why didn’t you do it in the 12 years your party was in office instead of talking about it now? Instead of giving lip service, you should have actually acted. I go on with some of the measures introduced by the Rudd government: a simpler superannuation payment system for small businesses, the rollout of a national high-speed broadband network across Australia—and I welcome the $43 billion recent announcement by the government in respect of that. I digress on that particular topic. The member for Moncrieff went on to talk about software. Where was his and his party’s concern about software, broadband and computers when they were in office? I can tell him that, when I was Mayor of the City of Salisbury, we had to look for our own investment and go into partnership with a private company in order to provide the broadband services that small businesses in that community needed but could not get access to, thanks to the federal government’s inaction on that very issue.

I add to that list the announcement by Senator Kim Carr on 7 May 2009 that Enterprise Connect, a $271 million network of manufacturing and innovation centres designed to help firms become stronger by focusing on innovation, creativity and excellence, will join with up to 19 organisations, private and government, with substantial business experience to deliver 180 workshops across Australia. I welcome that because it is an attempt to reach out to those small businesses and give them the kind of assistance that in many cases they need. The workshops will be held at no cost to participants and will focus on topics such as managing cashflow and how to better generate sales.

There was further support for small and medium businesses announced in last night’s budget. There were measures such as, as I said earlier, the increase in the tax deduction from 30 per cent to 50 per cent for businesses with turnovers of less than $2 million who acquire assets before the end of December 2009; new research and development tax credits available in 2010-11 of 45 per cent for companies with turnovers of less than $20 million and a doubling of the research and development expenditure threshold from $1 million to $2 million for the years 2009-10; additional support services for small business, with $10 million for the Small Business Online Program and another $10 million for the Small Business Support Line, which will provide initial over-the-phone advice and put small businesses in touch with specialist advisers on matters such as cashflow management, obtaining finance, marketing, and personal counselling and support; an increase in funding for current programs such as the Export Market Development Grants Scheme; further cashflow relief via the previously announced pay-as-you-go instalment adjustment; and $196 million for the new Commonwealth Commercialisation Institute to give small and medium sized businesses the power to turn great ideas into reality. We have not even come to the $4.5 billion relating to the Clean Energy Initiative, which undoubtedly will be a huge boost to so many small businesses out there.

Of course, the most significant boost to small and medium businesses came through the Rudd government’s economic stimulus strategies: the investment of $14.7 billion in upgrading or building new facilities at every school; the construction of 20,000 new public and Defence homes; an increase in the first home owners grant to $21,000 for newly constructed homes; almost $4 billion to insulate 2.9 million homes around Australia; and $800 million for 3,000 community infrastructure projects across Australia, such as town halls, parks, playgrounds and sports facilities. They are all investments that will ultimately provide support to small business. It will be small businesses that will get a direct and immediate benefit as a result of those commitments. In fact, it would be small and medium sized businesses every step of the way that will deliver those projects for Australia. That in turn means local jobs, with benefits that flow through every sector of the community, from suppliers to tradespeople and through to the local lunch bar. How better can you support small business than to add expenditure in the very areas where they will get a direct benefit?

I have had many discussions with school councils and local community groups about these commitments by the government. I have been incredibly impressed by the keenness of those local community groups to ensure that, when the work takes place, local people are contracted to carry out the work. They are as concerned as anyone else to ensure that their local people are the beneficiaries of these government commitments.

On the specific issue of jobs, I understand that in some trades there is still a shortage of suitably skilled people. I want to talk about a conversation I recently had with a constituent. Graeme Parkin, one of my constituents in Makin, raised with me his concerns about finding suitably skilled tradespeople in the tiling industry and, more specifically, about the low number of apprenticeships within that industry. Tiling is not the most appealing vocation for a young person to pursue, but the real problem is that too few tradespeople are prepared to take on an apprentice tiler. As Graeme Parkin quite correctly points out, there needs to be a reassessment of the apprenticeship and training process relating to the tiling industry. The Rudd government is taking action to address these skills shortages with the delivery of 701,000 new training places over the next five years, the building of trade training centres in our schools and the $145 million for securing apprenticeship initiatives which support out-of-trade apprentices and trainees to remain connected to the workforce and maintain their investment in training.

I said earlier that small and medium businesses will be critical in Australia’s economic recovery and growing our nation. Small and medium business operators are accustomed to doing it tough—working long hours, taking risks, and surviving downturns in business—so, in these tough economic times, it will be the resilience and the entrepreneurship of the small and medium business sector that will be critical to our economic revival.

I want to talk about a specific business. I was recently asked to speak at a launch at a business known as SA Motorcycles. The launch was for a new motorcycle, the Kawasaki ZX6R. This is a business that was established just over 10 years ago by a young person who had an interest in motorcycles and, along with a few friends who also had an interest in motorcycles, he put together a team of people who understood that particular sector. Today that business employs about 15 people, and it is still growing. The last two of those people were employed in recent weeks. More importantly, it has become the number one Kawasaki dealer in South Australia.

Evan Byles, the director of this company, deserves an incredible amount of credit. But he also deserves credit for being someone who is prepared to do all of those things I mentioned earlier—working long hours, taking risks—and he was quite proud to show me the amount of background work he had undertaken with his wife in the lead-up to getting that business up and going. It is a credit to him, and there are so many other small business operators just like Evan who are doing exactly the same thing and are prepared to work through the tough times and work the long hours that it takes to ensure that a business remains viable. For them, the tax deduction that is provided will give them the ability to invest in new assets, thereby reducing ongoing overheads and improving business efficiency while simultaneously creating flow-on benefits to those from whom those assets are bought.

This legislation is good for business, good for the economy and good for jobs—just as were the direct payments to Australian people in the Rudd government’s economic stimulus package. Those payments undoubtedly contributed significantly to the strong retail figures that we have seen over recent months. We have heard how the retail sector in this country employs some 1.5 million people. In my own State of South Australia, it employs 117,000. In my own region, it employs about 25,000. It is probably the single biggest industry sector employer in the region that I represent. I care about the people in the retail industry sector, and I care about the fact that they too, the retailers, are under pressure as a result of the economic downturn. But, thanks to the economic stimulus package, we have seen remarkably strong growth in the retail sector when contrasted with comparable overseas countries, and the situation is even more remarkable when compared with the previous month’s figures prior to the economic downturn.

That growth in retail spending has undoubtedly ensured that the jobs of those 25,000 people in my region who are employed in the retail sector have been secured. If it were not for that growth, I am sure that things would be much worse for them. It may well be the case that no-one can quantify with absolute certainty just how many jobs will be created or saved, however you want to look at it. There is no question in my mind whatsoever that that growth has contributed to employment certainty for those people—and their jobs are just as important as anybody else’s. Let us look at some of the retail figures. Between November 2008 and March of this year, Australia has seen a 4.5 per cent increase in retail trade. This is compared to a 3.1 per cent fall in Japan, a 2.5 per cent fall in the US and a 2.2 per cent fall in Germany over the same period. The Rudd government’s economic stimulus strategy is having the right effect, and the figures prove that. That strategy was the right thing to do for the nation, the right thing to do for the 1.5 million people employed in the retail sector, and the right thing to do for the tens of thousands of small businesses in the retail sector.

The opposition’s attack on the government’s direct payments to families is misguided. To claim, as the opposition has continually done, that the stimulus package has not worked not only is contradicted by the retail figures that I have just referred to but also demonstrates just how out of touch opposition members are with their communities, how little they understand local economies and how little they care about the 1.5 million people employed in Australia’s retail sector. There is a similar story with respect to this government’s housing commitments. Total building approvals rose for the second consecutive month, in March, by 3.5 per cent and the increase in house approvals of 3.4 per cent is the highest monthly rise since March 2007. The National Australia Bank’s April business survey, released yesterday, showed an improvement in business conditions and an increase in business confidence described by NAB Chief Economist, Alan Oster, as ‘the most encouraging set of numbers for some time’. What could you put that down to other than the government’s stimulus package? It is small businesses in both the construction and retail sectors that will be the prime beneficiaries of the Rudd government’s housing stimulus package.

There is a fundamental difference between small and medium sized business and big business. Small and medium sized businesses are primarily owned and operated by people who have invested their life and their future in their business. They have everything at stake in the success of the business and, unlike big business, where decisions are often made by highly paid executives who come and go, making decisions using investors’ or shareholders’ funds, small and medium sized business owners have a huge personal stake in the decisions they make. But they, too, are facing additional pressures because of the global recession. The Rudd government values the small business sector and, rather than just pay lip service to the sector, the government is providing real assistance with a broad range of policies that respond to key areas of concern raised by small and medium sized businesses throughout Australia. The minister is listening to those concerns, and I am pleased that he attended a small-business function in my electorate only a month or so ago where the 120 small businesses that attended could speak directly to him. He listened to what they had to say, and I did not hear one of them stand up and criticise the government for not doing enough. This is good legislation, and I commend it to the house.

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