Kevin Hogan (Page, National Party) Share this | Hansard source

Minister, I have a couple of questions that I will get to at the end of this. But first—and I am sure you understand a lot of this—I will talk about small business. I have over 12,000 small businesses in my electorate of Page. They are, far and away, the biggest employer in my community. They are the lifeblood of every regional town and every community within our sector—small business is it! It is very important. I am sure you are also aware that taxes from the private sector—small business taxes, private sector taxes, big business taxes and taxes from people who work within the private sector—fund everything. They fund every public sector job in our community; every welfare organisation and institution. All the health services and education services are funded by the taxes from the private sector. I know you would understand this.

The private sector—the business sector—is an important part of our community and our society. I am many decades older than you, Minister. I probably have a longer life memory than you, given that I have been around a long time. I want to go back to the Hawke-Keating years. I must say, to be a bit bipartisan, Hawke and Keating, as a Labor government, had it! When they came in—you would know this, Minister, but you probably do not remember it physically; I do, because I am that old—business taxes were 49 per cent. Hawke and Keating understood that we needed to grow the private sector. They wanted business—big business and small business—to thrive. So what did Hawke and Keating do? They lowered company tax rates. It started at 49, and I forget the exact way it was gradually put down—from 49 to 45, to 42, to 39, all the way down. Obviously, within the Howard years they understood that as well, until we got to the point that company tax rates are where they are.

Well might you say, 'What happened to tax collections for the government, given that we had lowered company tax rates and small business tax rates?' People talk about things being 'evidence based' at the moment. If you go to the health system or any type of system, they always say, 'We have to look at evidence based practice here.' What happened, Minister—and I am sure you are aware of this—is that not only did GDP grow as our private sector grew with these tax cuts, but the percentage of company taxes and business taxes grew as well. Unlike this lot opposite, we understand that this is not a zero-sum game—if you cut business taxes, it does not mean that suddenly there is no more money coming in on that side and that less money comes in. We understand that they grow. Businesses employ more people, they make more money and their percentage of taxes as a percentage of GDP actually grows.

Minister, you may well be aware, as it is quite a famous case around the world, that in Ireland back in the eighties—though they have some banking issues now that are unrelated—they had a corporate tax rate of over 60 per cent. They were going broke. No company wanted to go there; no company wanted to set up there. So what did they do? They cut taxes to close to 10 per cent and, within three years, they were collecting more money at 10 per cent than they had been at 60 per cent. I remember that because I am old enough, though I know you do not. The small business minister is probably old enough to remember it as well. I certainly do.

On this evidence based stuff that we need to look at when we are looking to grow the economy—we want our businesses to grow, we want our small businesses to grow and we want our big businesses to grow—because tax is competitive and we live in a global environment, like everything else, we need to be competitive, because we want companies to thrive and grow here. In the context of that, Minister, my question is: how does the 2016-17 budget, through these bills, support small and medium enterprise by backing businesses to invest and create jobs locally? How is the government backing small businesses? What are the alternatives? I am aware, as you are, Minister, that there are alternatives, and I think it is very important that you explain those alternatives to us today.

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