Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Hansard source

I want to speak briefly on the bill itself, and I want to make sure that I place a few comments on the record about this bill, about what it does and about how it will impact small business in a range of ways. Much has been made by this government of the small business measures in the budget, and those opposite are very quick to speak rapaciously about themselves. I am sure that will be the case, again, in the debate on this particular bill. When this small business bill was introduced into this place the minister said:

This is … the largest jobs and small business … package in Australia's history.

That is a big call. I want to remind the minister that just talking about jobs will not actually create jobs, and it certainly will not help with the highest unemployment rate in two decades that this government is now presiding over. All the rhetoric, all the theatrics and everything else that we get in this place certainly will not help the people who find themselves on the unemployment queues. This government has presided over the decline and end to our automotive industry. This government has broken its promise to build our future submarines in Australia, which would employ Australians in much-needed jobs of the future.

I want to congratulate the maritime workers and all workers currently visiting Parliament House. They are here to remind the government of the promises they made to South Australia and to the shipbuilding industry when they were in opposition and running around the country making promises to a whole range of people, which they are finding now difficult to keep.

What we have in front of us is a very sluggish wages growth and a government intent on attacking the wages of some of our lowest paid workers. They are the facts. If this government were really serious about small business and really honest about jobs and growth, then why is it that the Australian Bureau of Statistics' data confirmed that unemployment, last month, rose to 6.3 per cent. That is a very big number. It is a terrible number because of what it means for ordinary people and their families, as well as what it means for confidence in small business and in our economy, and because of what it means for people's ability to manage their own smaller economies, their household budgets, their household economies.

What we see before us is that, for the first time in 20 years, there are now more than 800,000 Australians unemployed. That is the first time in two decades. It is 114,000 more people who have joined the jobs' queue since Tony Abbott and this government were elected and since Bruce Billson was appointed Minister for Small Business. That is not something that this government ought to be proud of. When you hear the government members talk, they are going to crow about this in some way. But this is good as I cannot wait to hear how they will spin that.

The last time the unemployment rate was 6.3 per cent was in 2002 when Tony Abbott, under a previous government, was responsible for employment. The unemployment rate is higher now than it was under Labor during the global financial crisis. Unemployment, believe it or not, is higher today, supposedly under the genius stewardship of the Liberal government, than it was under Labor during the global financial crisis.

While Tony Abbott and the Liberals were trying, last week, to save the Speaker's job, 40,000 Australians joined the jobless queue in July. The figures also show a disturbing 0.4 per cent spike in youth unemployment with 13.8 per cent of 15- to 24-year-olds unable to find work. That is almost 300,000 young Australians currently unemployed. These are really bad numbers. These are numbers that the government should be focusing all of its attention on rather than the other things that it finds itself preoccupied with.

Australia does need a plan for jobs and it needs a plan for the future. Sadly it is not getting either from this government. It is clear that the Liberals do not have a plan. They do not have a plan for jobs, let alone a plan for jobs of the future. It seems that they can always come up with a plan for their own jobs but they are not so good at finding a plan for jobs for ordinary Australians.

Labor will never support—just to be clear—a two-tiered penalty-rate system that would leave millions of Australian workers worse off. This is an assault on decent working conditions of Australia's 11.8 million workers. But it seems to be the only rhetoric the liberal government can make when it talks about jobs. It immediately transitions from jobs to just penalty rates, that somehow this will fix all ills. Sadly, it is not the answer.

Labor's shadow minister for employment, Brendan O'Connor, got it right when he noted that rather than a race to the bottom on wages Labor believes the government should focus on jobs and economic growth through investing in skills and training, infrastructure, innovation and entrepreneurship. They are things that seem almost foreign to this government. Labor does have a plan for the jobs of the future and I will return to that in a little while.

The specific measures of this bill are welcomed by Labor, particularly the tax offset for unincorporated small businesses. It is a relatively modest boost. Let us be honest, it is good—it is welcome, there is no question about that—but it is very modest. That five per cent capped at $1,000 is small. A lot of small businesses will be enjoying the fruits, of up to $1,000, but I am sure they will not be throwing massive parties about the largess from this Liberal government.

Let me remind you of where some real and significant work was done to assist small business. It was Labor that gave the single biggest tax cut in history for small business. Labor gave that single tax cut for unincorporated small businesses back in 2012, when it increased the tax-free threshold from $6,000 to $18,200 and it continues to go up. That was a significant increase and was the single biggest tax cut for small businesses, which they will continue to enjoy into perpetuity. That is called real assistance. It was Labor that made that change and it was a significant boost to all sole traders, to the mum-and-dad entrepreneurs and the corner-shop partnerships alike.

Labor also welcomes the immediate deductibility of professional expenses along with the changes to the fringe benefits tax for portable electronic devices. Both these measures will help small business; however, as noted in the government's own explanatory memorandum to the bill, the changes to the FBT are estimated to have a small but quantifiable cost to revenue over the forward estimates period. I am happy to give credit where credit is due but let us keep all things in reasonable perspective. By any measure, the real test for the success or otherwise of government policy settings for small business is measured in the various monthly and quarterly statistics that are released by independent analysts.

I assure the minister for small business that every time he gives himself and his government a pat on the back—which they do very often—he needs to remember that the unemployment rate continues to climb, on his watch. For every little pat on the back the Liberals give themselves another person has lost their job. At the last election it was Tony Abbott who promised Australians he would create one million new jobs in five years. Instead, he has presided over the highest unemployment rate since the global financial crisis. It is not a good look and not good if you are one of the ones who ends up without a job. The fact is you cannot deliver a million new jobs if the unemployment figures keep going up. It just does not work that way.

It was also Tony Abbott who, at every opportunity, declared there was a budget emergency. I remember the shrill calls of that dire emergency and the calling in of the fire brigade. It was so imminent and so dire it was almost like the earth was splitting open and we were about to fall in—unless Tony Abbott got elected. Then everything would be fixed. The Liberals were calling this a really big budget-emergency crisis when the budget deficit was $24 billion. It was an absolute tragedy.

The problem they face now, with their budgetary genius, is a little problem called $35 billion in budget deficit. It has gone up, significantly. Back then it was an emergency. The world was coming to an end. There was a $24 billion deficit. Debt and deficit; that is all we got from the Liberals. Now, they are really quiet on debt and deficit. You hardly hear those two words in the same sentence. In fact, you hardly ever hear the government talk about it. Why would they not talk about it? Because it was $24 billion but now it is $35 billion. Gee, that is not a bad record, is it! Under their watch, the deficit has gone well above $35 billion.

The Minister for Small Business is well known for his enthusiasm and his theatrics, but these performances will not help small business or get people off the unemployment queues. The government have presided over the closure of the car industry and seem intent on exporting our Future Submarine jobs overseas—they almost seem determined to have that aim. It is curious. You have to look at this carefully and ask: why are they so determined, at every turn and corner, to give these things away? We had the fiasco of them saying that Australians could not build submarines. In fact, according to the then defence minister, you could not trust Australians to build even a canoe. If that is a reflection of the view of the Liberal Party, you would really have to question what these people are thinking.

Remember how Joe Hockey, before coming to office, promised that there would be a surplus in his first year and every year after that? 'I promise a surplus in the first year and every year after that,' he said. Of course, you would have to ask: where has that promise gone? Who was his make-believe intended for? It is also important to remember that Joe Hockey's own budget numbers are built on bracket creep. According to the Grattan Institute, around four-fifths of the government's return-to-surplus promise depends on bracket creep—in other words, you pay for it through your own taxation rates creeping up, which means the government does not have to do any work. According to the assumption of the Liberal government of a surplus in the future, four-fifths of it—almost all of it—is actually built on the back of taxpayers automatically paying more tax through bracket creep. Again, it is genius work. How hard do you have to work as a Treasurer to come up with that? Literally, if you just spent your days at home, it would happen under your watch without you having to do anything.

We have the Treasurer this week talking about lowering taxes—it is an interesting call. There is a new thought bubble every week. He refuses to look at some sensible revenue sources, such as cracking down on our unfair and unsustainable superannuation tax breaks, which even the superannuation industry thinks should be reformed, or looking at multinational tax avoidance in a whole range of areas. These are things that Labor actually had on the table. It is good, sensible legislation that would go some way towards redressing some of the inequitable tax treatment of multinationals that profit shift and do a range of other things, not just here in Australia but globally. We put some things on the table. When the Liberal Party come to government the first thing they do—it is almost their first act—is save the multinationals. 'Let's take that off the table; there's no way we're taxing them more. Let's immediately look at low-income earners—low-paid workers—and how we can take a little bit more off them. Let's see how we can cut pensions. Let's see how we can take a little bit off ordinary people'—but, of course, for ordinary people that little bit is a lot. It is actually a really big number.

I would like to think that this small-business tax offset will deliver a much needed boost for small business. I genuinely hope it does, but what small businesses really need is a plan for the future. They need a plan for jobs, a plan for confidence and a plan that helps them to build the future. Some experts already claim that between 40 and 60 per cent of current jobs will not exist in the future. Our future prosperity, of course, depends on harnessing Australia's entrepreneurship around a whole range of areas. That is difficult to do when government not only does not support that but takes away the tools and mechanisms that were previously in place. I have talked many, many times about the whole range of programs, assistance measures and bodies that were set up by Labor to ensure that Australians could take good ideas from the backyard, the garage or wherever, right through to that difficult process of commercialisation, which is really what is needed. There is no point just having a good idea. Ideas are free; they are everywhere. You can pick them up all over the place—you can talk to someone and come up with a good idea. Transforming that idea into something real that then gets commercialised, creates jobs and opportunity, helps the economy and, in the end, helps raise revenue for government is really difficult and complex. That is where the government needs to assist. That is what every other country in the OECD does. That is what successful countries do. In Australia we are really bad at it, and what this government does is add fuel to that fire by making it worse.

Australia has an unprecedented opportunity, I believe, to transition from an economy based on resources, primary industries and domestically-focused businesses to one that is based on high growth, on knowledge and on intensive businesses that can compete globally. Why shouldn't we be able to compete like the rest of the world does? There is no point in saying that now wages are too high or something else—it is just not the case—because in comparable economies where wages are just as high and where the competitive environment is just a strong they do well. We do not do well in those areas, maybe there are other things at play—that is what I would like this government think about.

The recent start-up economy study undertaken by PricewaterhouseCoopers and commissioned by Google Australia projected that in the right conditions, high-growth technology companies could contribute four per cent of GDP or about $109 billion and add 540,000 new jobs to the Australian economy by 2033. This from a base of approximately 0.2 per cent of GDP today. They are big numbers, they are good numbers. They are the sort of things that governments ought to focus on and genuinely look at how to support and grow—and not only our productivity but also the jobs of the future and small business.

Over the last two decades many countries have recognised that high-growth, science and technology—words that the Liberal Party are not comfortable with—based businesses are important drivers of economic growth. A growing number of governments have responded by launching programs designed to mature, nurture and promote businesses that are focused on these areas. The rest of the world is doing it but the problem is we are getting left behind. For example, since 1972 the Credit Guarantee Corporation of Malaysia, through its guarantee schemes, has been supporting the Malaysian economic development agenda by helping small-and medium-sized businesses get access to financing. If Malaysia can do it, why can't Australia? If Malaysia can support its small businesses in getting access to finance, why can't Australia? When you talk to small business one of the top three things they always say is a problem for them to grow and develop is access to finance. Why is it so hard in Australia for us to at least follow suit with the rest of the world? To date the Credit Guarantee Corporation has been instrumental in the establishment of more than 427,000 small to medium enterprises. That is how it has worked in Malaysia, and that is how it could work in Australia.

It is similar in the United States where since 1953 the US Small Business Administration has delivered guarantees and other forms of assistance to small business. In the UK, the Enterprise Investment Scheme is designed to help smaller high-risk existing companies to raise finances. It does so by offering a range of tax reliefs to investors who purchase new shares in those companies. It works alongside the Seed Enterprise Investment Scheme, which offers similar assistance in relation to new companies. The UK's Enterprise Finance Guarantee is a loan guarantee scheme to facilitate lending to viable businesses that have been turned down by mainstream commercial loan facilities. By providing lenders with a government-backed guarantee for 75 per cent of the value of each individual loan, the scheme gives small business a chance. That is what Labor wants to do in Australia. It is not a question of whether we are treading on new ground or testing this new scheme. It is a fact that everybody else is doing it—the United States since 1953 and the UK since 1972, but Australia is yet to have this.

But Labor has a plan on this—we have put a scheme on the table, we have a proposal and we will be taking it to the next election. Let me tell you, Labor will be here with those policies.

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