Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Hansard source

I rise to oppose this bill. I'm going to be outright and up-front on it. We know that many smaller businesses have been doing it tough in the current economic climate. We also know that smaller businesses provide approximately half of all employment in Australia. My electorate of Mayo is particularly blessed with small enterprises, with over 99 per cent of businesses being small businesses. Some have very large turnovers, but they are small family enterprises. The Nick Xenophon Team saw the tax relief in the previous bill as a way to give smaller businesses breathing space and to meaningfully encourage employment growth in Australia. These are businesses that have under $50 million annual aggregated turnover, including independent supermarkets, independent service stations, small construction businesses, the FruChocs brand and any other small family businesses and independent shops that you can think of. We acknowledge that they are quite different to the Coles, Woolworths and Bunnings of the world.

This is why we supported company tax cuts for up to $50 million with annual aggregate turnover—up to, but not beyond, $50 million. Remember that this threshold, as I've said, is not about profit. For example, it's not uncommon for an independent supermarket to have a turnover of over $15 million a year, but the owner would only be taking home the merest fraction of that. There are many businesses right throughout our communities that do have very high turnovers, but very low profit margins—service stations, in particular. I'm talking to small, independent service station owners in my electorate. They're often making less than one cent for every litre they sell. They might have a turnover of $12 million or even $18 million, but they only need a couple of people to drive by without paying for petrol and their profits for the day are gone.

The Nick Xenophon Team has a different view about big business. For big business, we are not convinced that tax cuts will translate into the same jobs growth as they will for smaller businesses. GDP growth can be split into growth in returns to capital, or profit growth, and in returns to labour—namely, wage growth. Australia has been experiencing declining wage growth, especially relative to profits growth. The wages share of total factor income has fallen from 54 per cent in March 2016 to 51.5 per cent in March 2017. The profit share of total factor income has increased from 24.2 per cent in March 2016 to 27 per cent in March 2017. Put another way, the returns to employees have been slowing down, whereas the returns to employers have been speeding up. It's hard to get a sense of the dramatic movements just from the numbers but, if you look at graphs, they look like cliffs.

Recent research indicates that there is also a high concentration of market power in many of the sectors in Australia's economy. This means that fewer and fewer large firms are dominating Australian markets. When markets are controlled by a few big firms, the more likely it is that they act in an anticompetitive nature, and that disadvantages consumers. It also means that these firms can simply use their market position to extract higher profits rather than needing to enhance competitiveness by attracting talent or developing their workforce. One classic example is the way in which Coles and Woolworths have used their market dominance to squeeze their supply chains, such as Australian farmers, to increase their profits. And yet, employees of Woolworths, for example, do not appear to have had a real wage rise since 1 January 2015. That's coming up to nearly three years. Although I understand that enterprise bargaining is underway, that is still a long time while all of their bills continue to go up.

In summary, unlike smaller businesses, I am not convinced that company tax cuts to the biggest businesses will result in significantly increased wages or employment. However, I will say the biggest challenge currently facing all businesses that I talk to in Australia is not their tax burden but the burden of the rising costs of energy. I have spoken at length in this parliament about the escalating prices of both electricity and gas, and the constructive steps that the Nick Xenophon Team have taken to address the issue. However, ultimately, the federal government must also act decisively under its own steam to tackle this challenge head-on. I urge the coalition, the government, to set aside their fruitless pursuit of big company tax cuts and focus on what are truly the biggest challenges facing all Australian businesses and end the policy uncertainty on energy. I urge them to do so with speed and haste. Investment in power generation needed to be stimulated years ago. With severe energy shortfalls looming, this can only herald further price spikes. Our time is running out fast.

When I talk with businesses in my electorate, what they tell me is they can't afford 20, 30 or 40 per cent increases in their electricity. They want to be able to put on young people; they want to be able to grow their businesses. They don't talk to me about needing to get a further company tax deduction. Those that are under the $50 million threshold are the true businesses that we should be supporting with a different tax regime. I say to the government: we have many, many things to work on in this parliament other than this endless pursuit to try to give the biggest businesses in our country, as well as the big four banks, even more money.

See this speech in context