Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

The member for Oxley has just proved an important point. He has proved you can talk for 15 minutes without saying anything. I understand—as he leaves the chamber—his complete embarrassment, because the member for Oxley, if I remember, was the parliamentary secretary for small business during the previous Labor regime. I will come to that appalling record, so it is no wonder he is scurrying from the chamber and does not want to hear about the appalling record of the Labor Party during its six years looking after small business. What we have seen this morning is just a simple, cheap, tardy stunt. For those following the debate here, we have a speakers list. Probably 20 or more coalition speakers wish to speak on this bill. Labor's cheap stunt today was simply to silence all those speakers, to silence them so as not to give them the opportunity to speak and to raise their issues on the importance of this bill.

I will go back to the bill, the Tax Laws Amendment (Small Business Measures No 1) Bill 2015. One of the most important speeches ever given in this country was 'The Forgotten People' speech by Sir Robert Menzies, not only for its content but for the time when it was given, in 1942, in the middle of the Second World War. Sir Robert talked about the kind of people he represented in parliament. He called them the salary earners, the shopkeepers, the skilled artisans, the professional men and women, the farmers and so on. He said:

These are, in the political and economic sense, the middle-class. They are, for the most part, unorganised and unself-conscious. They are envied by those whose benefits are largely obtained by taxing them. They are not rich enough to have individual power. They are taken for granted by each political party in turn. They are not sufficiently lacking individualism to be organised for what in these days we call "pressure politics." And yet, as I have said, they are the backbone of the nation.

He finished the last line of 'The Forgotten People' speech, by saying—and it is as true today as it was back then:

But what really happens to us will depend on how many people we have who are of the great and sober and dynamic middle-class—the strivers, the planners, the ambitious ones. We shall destroy them at our peril.

It is worth looking at how many of those people were destroyed by the previous Labor government and their anti-small-business policies. We saw a revolving door of small business ministers. At one stage the previous Labor government had had no fewer than five separate small business ministers in 18 months, none of them in cabinet. We saw a decline in the number of small businesses in this country and an incredible number—519,000, over half a million people—who were employed in small business when Labor came to office were no longer employed in small business by the time they had left office. Over half a million jobs were lost in the small business sector under the six years of policies of that previous Labor government. We also saw the small business proportion of private sector employment decline, from 52 per cent to 43 per cent. You could not have had a greater destruction of small business in this nation than that which occurred under the previous Labor government, and especially also under the previous speaker, the member for Oxley, who was parliamentary secretary for small business during that appalling regime when we saw such destruction.

But the real destruction was the decline in new start-up businesses under the previous Labor government. In 2012-13, their last full financial year in government, we saw the numbers of new start-up businesses decline by over 100,000. If we compare that to 2003-2004—a decade earlier—we see that the number of small start-up businesses declined by 100,000. We had more businesses exiting the economy than we had entering the economy under the policies of the previous Labor government. The number of start-up businesses we get in the economy is probably one of the most important economic indicators. We can see from the numbers the confidence that the small business sector has got simply by removing the Labor government from office. In 2014, the first full year of the coalition government, we saw the highest number of company registrations on record. Small business knows who to trust when it comes to the economy simply on the track record of the policies of the two parties.

We saw Labor's real attitude towards small business when the Leader of the Opposition was in here this morning. Everyone well remembers his foray into that North Carlton pie shop and his gratuitous attack upon that small businessperson over not having a warm pie sums it up completely—not the 500,000 jobs lost, not the decline in small business employment within the private sector, not the massive decline in start-ups in the economy. The single attitude in that pie shop sums up Labor's approach to small business.

There are several reasons why small business is important for the economy. We know it is important for job creation, because it is small business that creates most of the new jobs, so invigorating small business is what we do need to do to get unemployment numbers down. We also know that it is small business that drives the innovation in the country.

Small business getting in there and experimenting, taking risks, using their entrepreneurial skills, testing new products, new methods of business and new ways of doing things—that is how we create the innovation in this country. That is how we get our productivity increases. That is what history has shown. If we look at the largest companies in the world today—Amazon, Apple, Disney, Google—they all started as small businesses working basically in a garage from home. That is why we need the encouragement for small business to get out there to create tomorrow's Apple, to create tomorrow's Amazon. They will be one of those small businesses out there that we have to incentivise and to encourage to take those entrepreneurial risks.

Another reason why small business start-ups and encouragement of small business is so important is that, for decades throughout this country, small business has been the gateway for new migrants to assimilate, integrate and get their roots into this community. We are seeing something quite unique in this nation's history—for the first time we are seeing second and third generation Australians turning against our nation. With previous generations of migrants, the first generation had some difficulty settling into the country, but the second and third generations have settled in well and have contributed enormously to make this nation a better place. If we do not have opportunities for those new migrants to set up and start into small business, what we simply do is make it easier for the terrorist recruiters to alienate that second and third generation. That is another reason we must get out and encourage small business.

These bills are an important step, but there is still a lot more that we must do. We have, unfortunately, competition laws in this country that are anti small business. There is no provisions against anti-competitive price discrimination. They protect and provide privilege to the larger incumbent players. One example of how out of touch our competition laws are is a comparison with the Canadian Competition Act. The very first section of that act sets out the purpose of the act. It says:

Its purpose is to maintain and encourage competition in Canada in order to:

• promote the efficiency and adaptability of the Canadian economy

It goes on—

…   …   …

'Small and medium sized and enterprises have an equitable opportunity' are words that are not seen anywhere in our own competition act.

Then we have the banking sector. The Reserve Bank prints a list of historical indicator lending rates. It goes back quite some time and from about 1996 they start to separate the lending rates charged to large and small businesses. If you look back through these historical comparisons, there was a loan from one of our major banks to a small business, which was secured by a residence where the owner of the business had put their house on the line, so if the business failed the bank could step in and take the owner's house. When you compare that to what was loaned to large businesses there was very little difference for many years. In fact in some cases the rate of lending to small business was actually less than it was to large business. That should only be natural because the loan to the small business is actually secured by residential property. As we go through the list, year after year we see the gap, the differential, between what the banks loan to small business compared to what they loan to large business continue to blow out. In the latest figures small business are paying perhaps 260 basis points or more to borrow money from the banks than are their larger competitors, even though that loan is residentially secured. That is one of the great factors we have against small business in this economy.

Another factor is around shopping centre leases and rents. In any major shopping centre you will see large chains, supermarkets, paying perhaps three per cent of their turnover in rent because of special deals. But the small business competitor is paying up to 20 per cent of his turnover in rent. Just imagine the outcry around the GST if one company was paying three per cent and another company, selling the same product, had to pay 20 per cent. That is exactly what we have with the distortions in the retail rents and the protection from competition in our shopping centre industry.

The other factor is our legal system. How can a small business, today, take on a large corporation in a dispute before the Australian courts? There are two ways that they can get beaten. They can get beaten on the facts, but in most cases they can get beaten simply because they run out of money. Other competition laws have provisions for triple damages. We used to have a triple damage provision, going back to the old Industries Preservation Act. We cut that out in the sixties. It was another anti-small-business step.

These bills are one of the important steps to levelling the playing field for small business, and to incentivise our entrepreneurs to get out there and to take risks. What they do is lower corporate tax rate from 30 per cent to 28.5 per cent. I would like to make a prediction. Treasury estimates that the corporate tax reduction will cost the budget about $300 million to $400 million every year. My prediction is that, when the dust settles and we do the final accounting on this, it will not cost the budget a single cent. I speak that from history for every single time in this nation that we have lowered the corporate tax rate, as have both Labor and Liberal governments in the past. We have lowered it from 49 per cent all the way down to the current level of 30 per cent. Every single time we have lowered that corporate tax rate the Treasury has had more taxation revenue flowing into it from the lower tax rate and also more tax revenue as a percentage of GDP. If you lower those tax rates, you create greater incentive for investment and the government ends up in a better position. I believe that, when we look at the numbers in perhaps 18 months, or two years, or three years, we will see exactly the same thing from this taxation rate reduction. My prediction is that the government Treasury will get more taxation revenue from small business at 28.5 per cent than they will at 30 per cent. Mark my words, Deputy Speaker. I thank the House.

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