Gavin Pearce (Braddon, Liberal Party, Shadow Assistant Minister for Health, Aged Care and Indigenous Health Services) Share this | Hansard source

It's very easy in this place to get caught up in the tit-for-tat politics and the backwards-and-forwards blame game. However, what I want to do this afternoon is quickly highlight the calls that I receive and the visits that I have from my small businesses and my farms across my electorate, the north-west, the west coast and King Island in Tasmania. At the moment, they are doing it very tough. For many of the small businesses, this death by a thousand cuts adds up very slowly. It's not until the end of the business quarter that those cumulative effects start to become a reality for most small-business owners. I'm not talking big small businesses; I'm talking sole traders and partnerships. I'm talking mum-and-dad businesses. I'm talking farmers, small manufacturers and general trade jobs that are spread right across my electorate.

At the end of the Bass they're concerned. Their main concern is the cost of going about their business and servicing their short-term finance obligations. As well as that, many are locked into rates for mortgages and longer term capital that will come off in the next quarter or the next six months. That means that they're now on unstable territory; on uncharted ground. The trepidation that they have is affecting their business confidence. Business confidence is key when it comes to small business; the way in which you operate and the way in which you interrogate the business decisions in front of you.

Businesses have multiple layers when it comes to these complexities at the moment. The first one, of course, is interest rates. The trend is that interest rates are rising—in fact, we've seen eight consecutive rises since this government has held office, and more will follow. When it comes to the cost of doing business, the cost of capital and the surety of capital: as interest rates go up, so to do the complexities around securing that capital and making that investment when you haven't got the over-the-horizon market indicators or the market signal in order to repay a dividend back into that capital. That's the second thing.

Couple those with an added increase in energy costs. On my own farm I've got irrigators going 24/7 at the moment. The energy costs of most irrigators on the north-west coast have more than tripled this season—again, eating into their bottom line but not affecting the price that they're paid for their produce. That has not been adjusted, so they've got to wear that cost. When you start talking about the harvest season and tractors, a reasonable sized tractor consumes 400 to 500 litres of fuel a day. On King Island, for instance, the price today is over $2.50 a litre for diesel fuel on the farm. There is talk. They're scared about that diesel primary production rebate being taken away from them. I can't add up the number of calls I've received over that particular issue.

When it comes to the introduction of increased complexity in IR legislation, red tape and green tape, these are mum-and-dad businesses that can't afford to have a separate person or to subcontract this. They've got to do it themselves. When mum or dad take their eyes away from that small business, it means that half of that business has stopped being effective—again, an added impost on our small businesses. When you start talking about insurance premiums for primary production, there has been an incredible increase. The cost of premiums has almost quadrupled in the last 12 months. The labour force issues and the price businesses have to pay in order to secure a permanent labour force are incredible. The freight costs backwards and forwards across that expensive piece of water that is Bass Strait—and add in the stevedoring costs and charges—are an impost on small business.

The market signals aren't there. The fight between the Reserve Bank and the government causes trepidation when it comes to securing the long-term, over-the-horizon market indicators. Debt serviceability, unsurety, the unwillingness for neighbouring or co-joined businesses in securing that capital and working together—it's all unsure. I can't help but agree with them. The lack of detail, forethought and future from this government is only exacerbating this issue.

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