Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

I want to talk about atrophy and apathy. I draw the House’s attention to the atrophy that is happening in the small business community and family enterprises right across Australia and the apathy of this government towards the plight of this engine room of our economy and the men and women who take risks, make great sacrifices, provide great opportunities to communities throughout the country and who deserve a government that supports them, not one that ignores them.

The atrophy is apparent in a number of ways. We saw it recently in the latest ACCI small business survey results, which provide a very revealing insight into what small business men and women are experiencing at the moment. It talks about the general trading conditions and about confidence continuing to deteriorate. It says that the interest rate hike in November and concerns around the financial crisis are adding to anxiety among consumers and making already difficult trading conditions even more challenging. It talks about a deterioration in the indicators for small business prosperity—business conditions, sales revenue, employment, selling prices, investment—which were all contractionary over the quarter, and the indicators looking forward are not much more encouraging.

It goes on to identify what is often talked about as a two-speed economy, but I think one needs to go a bit deeper than that. I have called on the Reserve Bank to make small business its business, to understand the experiences in the small business community when it is making decisions about interest rate settings. Others have talked about a patchwork economy in Australia, and again I would say that for many in the small business community their patch is threadbare. They are on very tight margins in difficult trading conditions, and the worrying thing is that the government just does not seem to care. It does not seem to care that the small business community is absorbing the inflationary impact that cost pressures are presenting as margins are squeezed. Day after day we see reports of higher energy and input prices, of wages costs and of the cost of the key consumables that go into providing goods and services—how there is upward pressure in almost every area. Cost of living becomes cost of inputs for the small business community. And a key reason those cost drivers have not translated into enormous cost blowouts and runaway inflation is that the small business community is sucking them up through reduced margins, because their consumers are very cost conscious at this time and are driving hard bargains.

The big end of town have deep pockets. They can go on cavalier discounting exercises that maintain their market share but deteriorate their own profitability over time. You would have heard Gerry Harvey and others in recent weeks describing how their results were not quite as buoyant as they had hoped. Keeping turnover was difficult and margins were under great pressure. If you have deep pockets you can possibly absorb that for a while but in a small business when you are confronted with heavy discounting it places even more pressure on the viability of your business.

So it came as no surprise to me that the most recent Council of Small Business Organisations of Australia and Telstra Back to business survey identified distinct dissatisfaction with this government amongst the small business community. It pointed to areas of new taxes being introduced—I will touch on that in a moment—and higher interest rates. They described a relentless red-tape burden that seems to know no end, and how these things are all combining to cause confidence to plummet and the prospects and optimism for the future to take a severe battering. That is the atrophy that the small business community is facing. I give maximum respect to those men and women who persevere regardless of the apathy and indifference of this government.

Extraordinarily, in that recent COSBOA-Telstra survey they were actually calling for action that mirrored the coalition’s small business policy that we took to the last election. They are ideas that are already developed, costed, refined, delivered to the Australian public and embraced by a vast majority of small business men and women at the last election. They are already there. They are on the shelf. They have been road-tested and ready to go. But can you find anyone in this government who gives a damn and is interested in the needs of the small business community? There are some who espouse some interest or experience, but when they get up here I do not know whether they are enchanted or seduced by the big end of town or the talking points they are dished up to parrot in this place, but one thing is certain—there is no decisive action to support the engine room of our economy, the small business sector.

I was not surprised to read observations about big business having access to elected officials through the lobbying that goes on and how decisions that adversely impact on small business are washed away as minor impacts. Minor or major impacts—they are additional impacts on time-scarce and cash-poor businesses struggling to stay afloat in this difficult environment. I say to all members in this House: become familiar with the experience of small business people because it is a glaring area of atrophy and apathy at the hands of an indifferent Labor government here in Canberra.

The interest rate rises supposedly contain inflationary bubbles in some sections of the economy but they hit hardest in the small business community. To a day, Russell Zimmerman continues to toil on behalf of retailers by pointing out what a deteriorating impact interest rate rises have on retail, where there is even greater cost-consciousness and greater sensitivity to the cost of living pressures. These rises put even more pressure on margins and eat into discretionary expenditure, which is an area where many small businesses pursue their enterprises and provide economic and employment opportunities.

Those are the survey accounts and they paint a grim picture. If you look at the hard data you get a sense of how vivid this atrophy is and how the apathy of this government cannot be tolerated. I am sure you would be interested to know, Mr Deputy Speaker, that when the Howard government lost office 53 per cent of all Australians in the private sector were employed in small business. There were a little over five million Australians securing their livelihoods by employment in small business. Just a few years after the Rudd-Gillard Labor government took office that figure of 53 per cent of all people employed in the private sector had been reduced to 48 per cent. That five million plus went down to 4¾ million in the space of three short years. The most current ABS statistics show a decline of 300,000 in employment in small business in the private sector at a time when this government boasts about jobs growth that is occurring overwhelmingly in the big end of town.

They are the hard statistics, and they are real statistics. They represent the livelihoods of 300,000 people who are now no longer secured through small business. These are the small businesses that drive and energise the outer metropolitan, rural and regional economies. They are not all blessed with a major employer. They are not all blessed with a big end of town presence to provide those job opportunities. There are 300,000 fewer people working in small business. The survey talks about things like red tape flooding small business owners. Many describe to me the time they spend working for the government when they would really rather be working in and for their business. Those statistics are stark as well. I highlighted them during the election campaign. Within the first three years of the Rudd-Gillard government—after Labor had promised that for every new or amended regulation there would be one repealed—the stats were compelling. In that first period of Labor, there were 9,997 new or amended regulations. How many were repealed? Fifty-two. Maxwell Smart would say, ‘Missed by that much.’ There were nearly 10,000 new or amended regulations and 52 repealed—and that is a one in, one out basis.

Having highlighted that dismal performance, that breach of faith, another broken promise, I thought I would have a look to see whether things have improved. They have not improved. In 2010 alone, there were 3,437 new or amended regulations. How many were repealed? Four. It seems as though nothing has been learned, and it is clear why the small business community feel they are overwhelmed with regulatory imposts and compliance burdens when they would really rather be about creating jobs, wealth and opportunities in their communities.

Last week we had an opportunity to do something about relieving employers of a needless, pointless and completely unjustified imposition of the paid partial leave pay clerk burden—one that the Commonwealth wants to handpass away from its Family Assistance Office to employers right across Australia. When it came to that opportunity to do something constructive about compliance and red-tape burdens on small business, my bill went down—69 votes to 70. I wonder just where this supposed commitment is from the Labor government. It is another example of their complete indifference to the plight of small business.

That is a flood of regulation, but even in the most recent floods and natural disasters again this small business blindness emerges with this government. You see the Assistant Treasurer running around saying, ‘I’m going to beat up the insurance companies about the definition of floods.’ Okay, work needs to be done there, but do you ever hear him talking about business interruption insurance? This insurance can cost tens of thousands of dollars year on year for enterprises who know that, if they are not able to trade, it could have a very substantial and severe impact on their viability and opportunity to keep operating. Do you hear him talk about that? No. I will make sure that he does talk about those insurance companies declining business interruption insurance, which is what Impulse Entertainment in Brisbane is being subjected to. This could be the difference between them staying afloat and going under. I would like to see the Assistant Treasurer talk more about that.

But the latest talk is about a carbon tax. The last time a carbon tax emerged, it was in the form of a CPRS and everybody was out there with their hands out for compensation. Remember that? The big end of town was here, the mining companies were here and energy generators were here. Fantastic. Everyone was around. There was cash flowing around everywhere. It was the biggest merry-go-round, or cash-go-round, you have ever seen from the great big new tax that was proposed then. But do you know who was also keen to be factored into that conversation? Small business. Do you know what they were told? They were told by this Labor government: ‘Suck it up, guys and gals—suck it up.’ There was no compensation for small businesses. They should simply pass those cost increases on to consumers. Small business had already described the impact of a tight economy and the cost of living pressures on consumer behaviour and the inability to simply pass more costs on. We are back there again. We are back right where we were last time. Last time, you needed to consume twice the amount of electricity of our average small business to even get a look in—hang everybody else. This is even when reports around here were saying that the ability of small businesses to negotiate on their prices of electricity and other key inputs is very minimal and that they have experienced a far greater increase in the cost of their energy over recent years. That is in this AiG report.

Then we see statements about the need for small business to be factored in. Small business believed Julia Gillard when she said there would not be a carbon tax under a government which she led, and recent research has shown that 80 per cent of small businesses therefore have not factored that into their forward plans. The Commonwealth Bank-CCI Survey of Business Expectations revealed that three-quarters of those who responded were not planning for the introduction of a price on carbon—80 per cent had not factored carbon pricing into their business plans, because they believed the Prime Minister. It is another example of atrophy and apathy.

Small businesses in outer metropolitan and rural and regional areas also have higher network electricity charges, and even in 2008 a KPMG study commissioned by the City of Bendigo showed that the ability to pass on those extra costs is minimal as they compete with metro based locations. Now that point of difference is going to be made even bigger. ACCI Chief Executive Peter Anderson said in his recent assessment of the government’s carbon tax plan:

If anything like the 2009 CPRS proposal is repeated in 2011, the carve-outs combined with the failure to compensate SMEs for higher energy costs and their lack of market power in supply chains would make the gap between small and large business conditions even worse.

This is a constant message but there is no-one in this Labor government listening to hear it—no-one. If they wanted to do something about these issues, they could pick up the coalition’s small business policy. There are more than a dozen constructive, practical ideas that together represent a microeconomic reform agenda for the engine room of our economy. You do not have to take it from me. You can listen to the small business community, or you can even listen to the government’s own department. The blue book for the incoming Abbott government, had we been successful, gave an appraisal of these polices:

During the election campaign, you committed to numerous measures to support entrepreneurial activity and small business. These measures could provide an important boost to productivity.

This is a stunning endorsement from one of the government’s own departments. The atrophy in small business must stop in the national interest, and the apathy of this government needs to stop right away.

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