Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Hansard source

This is just another area where we see the same policy drift and clueless approach from this government, not only their approach to economic issues but their approach to just about every aspect over the four years of chaos of this government. They have flopped about like a flathead in a tinnie. Really, if we are talking about 'vibble bobble' we have seen so much on this side that it just defies belief. Will they ever achieve some kind of policy coherence?

Here is an area where I can at least congratulate them for having adopted a Labor policy. When we talk about benefiting small business and what will actually mean something on the ground to small businesses, Labor's policy of loss carry-back and instant asset write-off is something that meant something to every small business in Australia. Whereas, if we talk about the government's tax reform proposals, it just does not actually achieve anywhere near that kind of impact to small businesses. If you look at Eden-Monaro as an example, I have around 5,000 small businesses in my region and there are only a handful of them that are actually incorporated that would even 'benefit' in from this 'tax relief'.

So, effectively, this does nothing for the vast majority of small businesses in Australia, and that is the first essential point that we should communicate here. Those sole traders and those partnerships do not get any benefit out of the tax reforms or tax cuts that the government is proposing. But, yes, instant asset write-offs and loss carry-back really help. But when we talk about the record of this government on assisting small businesses in this country, we have seen a record of devastation. The car industry has collapsed; a couple of hundred jobs are going there. We have seen what they have done in naval shipbuilding. I have talked about this in a couple of speeches already. Labor built the shipbuilding workforce up to over 4,000 in this country and we had a program ahead of us of building supply vessels and going into rolling shipbuilding that would have grown that workforce even further. Instead, what we have seen is over 3,000 jobs lost in that space. We have seen the great shipyards of Newcastle and Williamstown, which were playing such a vital role in that plan, now rotting on the vine.

To really reinforce this downward spiral that has been created these last four years, there was been the massive casualisation of our workforce. Permanent jobs are just a dim, dark, distant memory from this government's way of dealing with the economy. Really, when they talk about creating these tax deductions and the effect that this will create and the trickle down tradition, we know it will not happen. It has never happened before and it has never worked before. If it was going to happen with the record profits we are seeing in some sectors now, it would be reflected now, we would be seeing it now. Instead, what we are seeing is record low wages growth. So it is just a complete myth that that will happen.

They talk about encouraging investment. All we know that will happen with this $65 billion tax giveaway is that all of that money—or the vast bulk of it—is going to go overseas. We will see very little of that benefit come here. When you take into account all the benefits that are already here in our imputation regime, there really is no impact that is going to be felt here in relation to those massive tax giveaways to those big overseas companies. If you wanted investment, what you would have done is continue Labor's Clean Energy Future framework, because that was encouraging massive investment in the renewable energy industry, one of those growth industries that we could have been playing such a vital role in. We could have been getting the benefit of being at the ground floor of so much developing technology in that area and marketing it to the world. Instead, we saw reports like Bloomberg's report, which was evident in reporting in 2015, saying that investment in large-scale renewable energy had fallen by 90 per cent in 12 months. My region was one of the regions to suffer the most from that fall-off. In the period when I was the member from 2007 to 2013 we had over $1 billion in investment in just renewable energy projects coming into just Eden-Monaro. We managed to negotiate to get wind farm components brought in through the port of Eden, which created local jobs for our stevedoring company there. We had the trucks stopping in towns like Bombala, putting money into the town and all the small businesses, with the retail and hospitality sector gaining from that, particularly through the successful Boco Rock project. That had a phase 2: there was a wave energy project; there were all sorts of projects that we were going to see come from the flow in investment that would have happened from maintaining that policy framework. All of it disappeared. We have seen some kicking to life of investment through what the states and territories, the ACT, has done in this space, but effectively now we are moving into another phase where uncertainty is killing off any further flow of investment. This is an area where we could have seen investment flowing, but it has not. It has been killed off by the coalition.

Then you look at the other side of that story, the impact of climate change, which the government is doing nothing about, and the impact on it on small businesses. I am not just talking about farmers and those who depend for their livelihoods on some of the more open environmental business enterprises. It also affects cafes and small businesses in Queanbeyan. During the last massive heatwave we saw cafes like Hotch Potch and many small businesses around Queanbeyan completely shut down because all their vital machinery, their refrigeration and the rest of it, broke down. A small business like Hotch Potch was not in a good position to be able to replace that machinery. Obviously you can talk about storm damage as well and the effect that that is having on many small businesses.

They are ignoring all these issues and impacts—what would encourage investment, what would take away serious effects on small businesses—at the same time as trying to make this huge tax giveaway, which is not going to achieve jobs and growth in Australia. In fact, they are looking at completely the wrong policy settings to achieve that. There have been so many reports and commentaries by economists on the fact that this tax cut will not achieve jobs and growth. One example from the MacroBusiness website from February this year stressed that there was no evidence at all to support the notion that this would create jobs and growth, if you actually were aware of what is going on in the world in terms of where jobs are created and where industry is going to grow. They said:

An alternative approach, which would be much more likely to have positive effects on employment, investment and innovation, would be to tax new companies at a lower rate. OECD research shows that young businesses are the primary drivers of job creation. And new companies are more likely to be at the frontier of productivity growth … Confining preferential tax breaks to new businesses – for example, by prescribing that a lower tax rate is only available to a business for the first (say) three years after its incorporation – focuses the assistance on those businesses which are actually likely to innovate, and to create jobs.

Effectively this government has lost the plot on focusing on putting policy settings in place to create start-ups, support start-ups, support innovation and to support new businesses. That is where the job growth in Australia will come from, not from this flawed tax proposal by the government.

You also need to look at how we can properly commercialise research and development, look at our tertiary institutions and how they relate to business, how we commercialise and market the research and development from the tertiary sectors, and how we develop a proper venture capital industry in this country. We have seen no policy initiatives from this government that have addressed that really critical issue. It is a great shame for this country not to have the sort of mature venture capital industry that really is essential in this day and age, when you have $2 trillion sloshing around in our managed funds not working hard enough to get behind new businesses. We need policy settings that achieve that.

An example of the sort of possibilities in this start-ups space, and particularly in rural and regional Australia, where we are not really taking advantage of the human resource that is out there or enabling them to take the ride on these new economies that is possible with good information infrastructure and good skills and training—an example is the Birdsnest business in Cooma, south of Canberra.

Jane Cay managed to wander off from the farm—she is married to one of the local farmers there—into town, bought a shop and started a business. Now her business occupies an entire block in Cooma. She is employing 110 local women. It is a very creative workplace environment with incredibly flexible work hours so the women can get their kids to school and do what they need to do on the farm. Now I think that company is in the top seven online companies in Australia. It is enormously successful, underpinned by communications infrastructure that she has there in Cooma.

Of course that can be amplified much more widely with a greater spread of successful NBN technology, which we know this government has made an absolute mess out of. I had an NBN forum in Queanbeyan last week. Over 100 people came in just from the near surrounds of Queanbeyan—

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