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

The budget Appropriation Bill (No.1) 2011-2012 and related bills were largely built on a speech full of misrepresentations, make-believe and an incredible dose of optimism when the Treasurer introduced them on budget night. Labor proclaims this budget for what it might do not in this financial year, and not in the next financial year, but in the year after that—that is the key selling point of this budget. We seem to have moved into a bit of a time warp where we have chosen to ignore the budgets and the fiscal position in the intervening period and are not talking about this financial year or the next but the one after. There is a suggestion that at that time Labor will deliver something it probably would not know if it saw it, and that is a budget surplus.

I say make-believe is at the heart of this budget because, when you look at the assumptions that underpin it, we need to take into account a number of things. The Gillard government is counting on record high terms of trade staying that way and at worst being diminished by four per cent, a fairly minor adjustment, but apparently the Gillard government believes these incredible terms of trade, probably the best in 150 years, will not change by more than four per cent.

Secondly, it then talks about some Herculean projections in revenue. If you look at the GST figures, for instance, there is an enormous growth in the revenue that that is supposed to bring in. There are also some assumptions embedded in it about what the mining tax will bring to this budget even though the mining tax has not been finalised and many commentators are suggesting the concessions or negotiations that Prime Minister Gillard engaged in will see the biggest three mining companies likely to be paying less tax than they are now because of changes in the way assets will be valued and offsets in terms of state-based royalty changes.

There is also something that cannot speak its name in this budget, and that is the carbon tax, one of the most substantial impacts on the Australian economy and on the Australian community, a new tax that comes in at exactly the same time as the mining tax. Albeit not well argued and not well analysed in the budget, the mining tax is at least there. But the carbon tax is not. Then you go behind those figures even further and you realise the slender surplus that the Gillard Labor government believes it will produce not this year, not next year but the year after—a slender surplus that is less than most of the adjustments in the budgets over recent years, but apparently we are supposed to believe that in these out years those assumptions will be right—is built on bracket creep. There are no tax cuts to adjust the threshold rates at which income tax is paid. So you will see Australians who are fortunate enough to gain an increase in their income increasingly moving into higher tax brackets. There are not even tax cuts in this budget that maintain people's tax liability; as their income goes up they are going to sneak into higher brackets and pay higher income tax because of it. But on the flipside, in terms of family allowances and the like, you see a number of those benefits also now getting into this budget benefit through bracket creep category where, as their incomes move and those thresholds stay frozen, people will increasingly move out of those areas of eligibility. So it is a piece of fiction. This budget would be in the fiction section of most public libraries but, alas, we are here to discuss it.

But there is one moment of disclosure and that is the disclosure, I think in Budget Paper No 2, where there is finally an admission that the debt ceiling that the government has had to operate under will need to be increased. You might recall that when Labor was elected the debt ceiling captured by the Commonwealth Inscribed Stock Act, if I recall correctly, was around $75 billion. It was pushed out to some $200 billion as part of the government's response to the global financial crisis. It was pushed out there with an assumption that the government would need to account for its actions to move out to that higher figure to prove that there were some special considerations that justified that increase. Now not only are we faced with a request to push that $200 billion debt cap out to a quarter of a trillion dollars, $250 billion, but now the government wants to have no requirement on it to explain and to justify its actions to increase the debt to $250 billion.

Why this is important is that, long after the electorate is able to cast its judgment on the Gillard Labor government and whatever that judgment may be, some of the legacies of its actions will still be with us in terms of the debt that we will all need to pay—not only service but hopefully repay at a subsequent date when the coalition is elected down the track, but we will all be paying for it. It is perfectly reasonable that, if the Gillard government wants to max out the Visa card limit of the Commonwealth, it should account for its actions. That is why the coalition's amendments are very worthy of support. We have said that we are not declining to give the bill a second reading but the government deserves to be condemned for incorporating in the bill this plan to push its government borrowing limits above $200 billion, and that we should recognise that a special case must be made for such a significant increase in borrowings and that the government must explain any special circumstances that it feels justify taking our debt above $200 billion. The parliament needs to be given the opportunity to hear the government's case. If the government is so convinced there is a need to blow out Commonwealth debt above $200 billion then the requirement to justify that action is perfectly reasonable. There may well be a good reason, but where is the accountability and transparency in this Australian parliament where the Labor government thinks it can simply run over the top of a $200 billion debt limit feeling no need to justify its actions to the Australian public?

The debt binge that the government is on is just one of a number of challenges that my community, my electorate, and also the constituency that I represent as the shadow small business minister are facing. It is little wonder that small businesses are struggling to get access to finance, when there is a gorilla in the room devouring financial resources at such a huge rate, as evidenced by the blow-out in the government debt for this year, next year and, I would dare suggest, for many years to come. But that is just one of a number of challenges the small business community faces that the government has not faced up to in this budget. The government has failed to address any of the major and compelling concerns and challenges faced by the engine room of our economy. In fact it seems almost an environmental initiative that the government is trying to take a couple of cylinders out of the engine room of our economy as some kind of response to climate change.

It is quite bizarre. The key challenges that the small business community face do not even crack it for a mention in this budget. Instead, there are a number of tricks where the government is suggesting it is doing good things by the small business and family enterprises of Australia but where they are actually being serviced by harmful measures that the government is not that keen to talk about. Earlier speakers have talked about the impact of FBT changes and what they would mean for a small business that might provide a delivery van or a work vehicle for their employees. There is also the issue of the instant write-off. The government seems to proclaim that as a great win for small businesses, that somehow there will be a cash flow benefit. But they have failed to mention that to get the benefit, in the example cited by the Treasurer, for an end-of-year tax benefit—not this financial year but next, probably payable in October 2013 or somewhere in that order—of $1,275 you need to spend $34,000. In terms of cash flow analysis, that is a hell of a lot of lolly—$34,000 to get $1,275 back. But it is the only good thing that the government thinks it can cite in this budget.

You dig a little bit deeper and you wonder: how is this being financed? The courage of the Gillard Labor government is to take on 400,000 of our smallest businesses. By scrapping the entrepreneurs tax offset, they are ripping out of 400,000 of Australia's smallest businesses and self-employed an incentive to provide for their own wellbeing and to provide opportunities for others. This measure was introduced by the Howard government to give support and encouragement to those people prepared to invest in their potential to support their own livelihood, to nurture a business, to grow opportunities in this country. If you think that is a terrible thing to do, it was quite remarkable last week when Canberra based Labor MP, Andrew Leigh, had a spray at those who were actually benefiting from the entrepreneurs tax offset. Rather than face up to the over 400,000 small and microbusinesses scattered right across Australia, who see this modest incentive as some encouragement to provide for their own requirements and to provide their own employment and economic opportunities, Mr Leigh had a spray at them, suggesting that people are deliberately organising themselves and rejecting 'market opportunities which might be present' solely to claim the ETO benefit he describes as 'a fairly low level of assistance'. So what is he saying? Is he saying that for a 25 per cent discount on taxable income people would turn their back on an opportunity to grow their business? He went on to decry the fact that the average payment being made was less than $500 and that 70 per cent of those claiming it were getting less than $600 back. Looking at the standard tax table and allowing for a tax-free threshold, the average person claiming the entrepreneurs tax offset—which, according to Labor's own figures, is around $500 in benefit—is earning about $420 a week. These people are earning less than $22,000 a year as entrepreneurs in their own right through self-employment, and this Labor government wants to take a modest incentive off them to somehow fund a dodgy cash benefit where you spend $34,000 to get $1,275 back.

What is this about? The people being criticised by the Labor Party are earning under $22,000 a year and they get a modest benefit for that. Mr Leigh goes on to say that 70 per cent of the claims are for less than $600. According to the standard tax table and allowing for the tax-free threshold, do you know how much they are earning? It is $466 a week. Their grand income is under $25,000 a year, and they are getting slugged with extra tax by this Labor government, which claims to have some passing interest in small business. Well, it does not. Labor has never understood small business and never bothered to understand the challenges that the small business community face. It was bad enough when Kevin Rudd was Prime Minister, but at least there was apathy. Now it is downright adversarial.

What the small business community needs is an advocate and an ally. Since the election of the Labor government, 300,000 jobs have been lost in the small business community and 25,000 small businesses no longer exist. When the government boasts about the jobs it is creating, it is not boasting about jobs being created in small business and family enterprises. These are the economies of outer metropolitan and rural communities that do not have the luxury of a CBD or a mine. This is what drives the livelihoods and opportunities across Australia and they are being done over, day in and day out, by this government.

But it gets worse. The Prime Minister has the gall to go out there saying that you must value the working capability of every Australian. Well, apparently not. Apparently you only value people who receive a pay cheque. Why would you go after them with this enterprise tax offset? Why would you wipe that out? It is because they are self-employed. They are not receiving a pay cheque; they are trying to earn their own and perhaps create pay cheques for others.

But it gets worse. The opposition and those two million people who derive their livelihoods from self-employment were very concerned about secret meetings between the union movement and the Gillard Labor government, the ones that were denied and then admitted to. Nick Sherry had a very awkward time in the Senate explaining these meetings that everyone else seemed to know about but he said did not happen. This coordinated, multipronged assault on legitimate contracting and self-employed arrangements had another weapon added to it out of this budget. This is now a new weapon. It was not enough to send out the Fair Work Ombudsman to get stuck into self-employed independent contractors. It was not enough to send the tax office out after these people with no evidence that there was a need to have such a jihad against them as has been unleashed by this Gillard government. It was not enough to send the Australian Building and Construction Commissioner out after them. That was not enough. Do you know what is out there now? Under this budget, the Labor government wants those people who are engaging contractors to now be involved in this web of making sure nobody is self-employed and that everyone is forced into a traditional employee-employer relationship where the union movement has what it believes is a controlling stake and a controlling interest.

When is enough enough? When are you going to let independent contractors and self-employed people actually have a fair go? Every day there is a new attack on them. Why? It is because they do not fit in this neat little unionist view that everyone receives a pay cheque. These people are earning their incomes through hard work. They do not have the comfort of being able to turn to an employer and say, 'Hey, things are a bit tough, but that is okay; you can cover me for a few more weeks until things pick up.' These people do not become unemployed; they just do not have enough work. As the government talk around participation in our economy, do they not realise that self-employment is a legitimate way for people either returning to the workforce after periods out or maybe contemplating retirement trying to juggle their working arrangements? Being an independent contractor and self-employed is as legitimate as any other way of earning a livelihood in this country, but you would not know it.

Assistant Treasurer Bill Shorten came out with another press release today somehow suggesting, 'It will not be a problem for any honest contractors; we will just throw a bit more red tape and compliance obligations at them.' You stalk people and harass them out of a legitimate career and employment trajectory, and those people who dare engage contractors because it supports their entire workforce— (Time expired)

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