Joanna Gash (Gilmore, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House:

(1)

notes the contribution of small business to regional economies;

(2)

acknowledges that small, micro businesses employ many people and are worthy of protection against predatory behaviour by conglomerates, including organised trade unions;

(3)

acknowledges the role small, family-owned businesses play in creating employment opportunities in smaller communities;

(4)

recognises the disadvantages faced by small business operators in competing against major chains in regional areas; and

(5)

calls on the Government to take all steps necessary to ensure that small business in Australia remains viable in the face of the many threats confronting small business operators.

In New South Wales small business is doing it tough. By small business, I mean those micro businesses that are run and operated almost exclusively by family members. In regional and rural areas like the electorate of Gilmore these businesses provide a significant level of employment opportunities, whether they hire employees or people are self-employed—businesses like corner shops, plumbers, builders, service industries associated with tourism, cleaning contractors and a host of other activities that the big companies do not touch. They are there because the market catchment of rural and regional areas is far too small to attract the big operators but, when they do arrive, they have the capacity to devastate the small business sector simply through their sheer commercial power. The small businesses simply cannot compete and, over a long period of time, they eventually wither and die.

I am very concerned at the concentration of market advantage that these large conglomerates exercise and their effect on local communities. Not only do they have a huge commercial advantage, but their capacity to purchase huge volumes of commodities at a significantly lower wholesale price means they can sell the products far cheaper. They have the advantage of sinking bucket loads of money into advertising and influencing consumer behaviour. On a volume-to-volume basis, small business is out of the race, and its profit margins reflect that. Small business is disadvantaged in the negotiation of fair rents and basically has to accept what is on offer—again, a cost that comes straight off the bottom line. These businesses deserve protection against unfair, unequal, predatory practices and I do not believe sufficient is being done in that regard. The ACCC needs to be given more power to act and expose these big businesses that are colluding at the expense of small businesses. I include the oil companies in that statement.

The Trade Practices Act prevents any business from gaining an advantage over its competitors by engaging in unconscionable conduct or through anticompetitive practices. The government’s recent strengthening of the TPA allows small businesses to compete more effectively with large business. The amendments to section 46 will allow the courts clearer scope to determine misuse of market power, including predatory pricing by large business. But I do not believe that the New South Wales government is doing enough to stimulate rural and regional economies, preferring, it seems, to focus on Newcastle, Sydney and Wollongong—the primary political base of the ALP. New South Wales barely avoided sliding into a technical recession in the December quarter. In the December quarter just gone the growth rate of New South Wales was half that of the national average. The headline of an article in the Sydney Morning Herald on Friday, 18 May 2007 about the New South Wales government said it all: ‘After fifty days, still stuck in first gear’. The article states:

The overwhelming feeling in the business sector is that there is a lack of urgency to address many problems facing the state at a time of the electoral cycle when it is possible to make decisions.

The greatest urgency for the New South Wales government is to stimulate a bleeding economy, but very little is being done. They just do not care, and the evidence for that is a collapse of the building industry, which takes all those businesses that rely on it downstream. I am reliably informed that an indicator of retail health is radio advertising which, according to the Financial Review, has plummeted in New South Wales. That is because business cannot afford the cost of advertising in the light of falling profit margins. Who feels that the most? It is the mum and dad businesses that are the backbone of our communities, like those in my electorate of Gilmore.

It is the role of government to stimulate business activity through fiscal and monetary policy. There is no doubt that the federal government has played its role because we have a buoyant national economy and things could not be better overall. But bring the magnifying glass down to places like Nowra, Ulladulla and Bateman’s Bay, which are regional centres in Gilmore, and an entirely different picture emerges. The ALP have been vigorous in protecting union jobs, but they do not care about the major creator of jobs in rural and regional areas and those who employ themselves. We in government need to recognise the significance of the small business sector and their role in the community. We need to take urgent and responsible steps to protect small business from intimidation by big business, big union and big government. Without due protection, they are the real underdogs.

David Hawker (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I second the motion.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | Link to this | Hansard source

I rise to speak on the motion moved by the member for Gilmore. This is an important motion and I agree with many of the comments made by the member for Gilmore, particularly with respect to her concerns that larger conglomerates have a greater concentration of market power and therefore place many small businesses in a vulnerable position, and that should not be tolerated. There is an inherent contradiction in some of the comments made, intentionally or otherwise, by the member for Gilmore. On one hand, she would argue that the federal government has done all it can and refers to the buoyant economy; on the other hand, she says that little has been done to protect small businesses from larger businesses. 

Notwithstanding the rhetoric, it is the case that this government has not been a protector of small businesses. Despite the mantra from many ministers and indeed from government members, there has not been sufficient protection for small businesses to enter the market, to allow them to conduct their business in a way that provides them an opportunity to succeed. Therefore, while I agree with much of what was said by the member for Gilmore, there has to be some blame directed towards a government that has been in power for 11 years.

I would understand if this were the first term of the Howard government and a government member wanted to draw to the attention of the executive the failings of a government policy, but this is the fourth term and the 12th year of the government and there is no excuse for the failings—which I am sure the shadow minister for small business will articulate fully soon after I have spoken. It is symptomatic of a tired, out of touch and arrogant government that presumes support of a particular group of people or a particular sector and then really does not do much to attend to their needs. It is as foolish for the coalition to think it can presume overwhelming support from small business proprietors as it would be for Labor to assume that union members would vote for them. That is not the case. The fact is that significant numbers of those two groups, for example, do not vote for one party; they vote for both and it should never be assumed that there is a particular constituency which will, without fail, vote for a particular political party.

I believe the government has begun to believe its own rhetoric with respect to the support it has among the small business community. This has been pointed out by the member for Rankin and others in a number of debates in recent times. When you look at it, you see that small businesses are looking for assistance, but what was the first thing government chose to do with small business when it was elected to power? It was of course to force them to be tax collectors for the goods and services tax. And what did the government do after that? After that it made the business activity statement so complex so as to make businesses very difficult to run. If you own a very small business—the businesses to which the member for Gilmore referred, the mum and dad businesses—the last thing you need is to spend your time weighed down by and buried in red tape having to deal with departments requesting more and more information of you when you are just trying to go about your core business. That is a failing which has not been attended to sufficiently by this government, largely due to the fact that it presumes small businesses vote for it and will continue to vote for it.

That is why it was quite interesting to see the results of a recent survey by MYOB software company which showed that no, there was not an overwhelming groundswell of support by small business for the Work Choices legislation. In fact, more people believed they would not employ people as a result of Work Choices than those who said that they would employ people as a result of Work Choices. Indeed, 44 per cent were dissatisfied with the Howard government. This is after 11 years in power. A government member quite rightly puts a number of things to the parliament but the government have failed to attend to those matters. In the fourth term it is all too late. It is symptomatic of government that assumes people will vote for them, that they will have to vote for them. In the end, small businesses, like any other cohort, will make their decisions as individuals and they will not be voting for the Howard government. (Time expired)

Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Nowhere is small business more important than in regional and rural Australia, where small businesses comprise the majority of businesses. As it is in Australia, 96 per cent of all businesses are small businesses. It is estimated that 39 per cent of Australia’s economic production is generated by the small business sector. Small businesses are vital to Australia’s economy. In the 2005-06 financial year, there was a net growth of 25,753 small businesses. This sector is very large, important and significant. The current government has made substantial changes, for instance to the Trade Practices Act, to allow small businesses to compete more fairly against large businesses. The Trade Practices Act amendments are very significant and must be continually monitored because small business can come under threat of large business acting in an unconscionable manner. Some of the amendments to the Trade Practices Act deal with strengthening the operation to allow small business to compete more effectively.

The proposed amendments to section 46 of the Trade Practices Act will give courts a clear escape to determine the misuse of power, including predatory pricing by large businesses. Also, we have allowed small businesses—whether they be trucking businesses or farmers—to group together to make a claim against or to negotiate with large businesses for the terms and conditions under which they will sell or supply goods. For instance, recent changes in the budget to capital gains tax giving concessions to small businesses to grow and prosper have been welcomed by small business—that is, a capacity to pass on the benefits of the work and the goodwill of a business to realise it in a fair way.

In addition, there have been changes to and standardisation of the definitions of small business. Put simply, a small business is a business with a turnover of less than $2 million per annum. That applies to the capital gains tax and a whole range of other concessions—the goods and services tax, the filling out of the business activity statement and the fringe benefits tax.

Unlike what the previous speaker, the member for Gorton, said, the workplace reforms have been welcomed by small business. Where has the growth, represented by over 200,000 additional jobs, and touching on another 300,000 jobs, come from, if not from the small business sector? Small business is now living without fear of reprisal and of having to pay $10,000 a head for employees who make claims for go-away money. That was the situation in the past. Time and again, a claim for payment of go-away money was nothing but a try-on. The protection of basic employee rights is still there in small business. Whether it is in the area of discrimination, long service leave or a range of other factors, those protections are still in place, by law, and universally—including with respect to the payment of superannuation. The principles that ensure safety in employment are there, but the unfair dismissal aspect for small businesses has been removed. This has been welcomed by employers and employees alike.

There has been a change to simplification processes. The threshold for cash accounting processes that businesses can use has been lifted from $50,000 to $75,000, and there is a simpler and fairer workplace relations process. The government has moved to provide skilled workers. In June 2005, approximately 391,000 people were engaged in apprenticeships. When this government came to office, there were fewer than half that number. We have doubled the number of effective apprenticeships and traineeships by applying funds and care to that area.

Mr Beazley admitted in 2000 that the Labor Party had never intended to be a small business party, and Mr Rudd made similar statements in 2001. The weekend announcement by the Prime Minister that the Bells Line of Road would be investigated as the site of a new expressway across the Blue Mountains has been welcomed by small business communities in places such as Bathurst, Lithgow and beyond, because they know they will benefit from such a change. Unlike the federal government, there is no vision on the part of the New South Wales government, which has rejected a proposal for a study to establish such a freeway, which would provide access and new opportunities for the people of central western New South Wales. Eric Roozendaal has rejected the proposal. (Time expired)

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

The inspiration for this private member’s motion appears to be an adjournment debate contribution made by the member for Gilmore, who is also the mover of this motion. There has been a degree of controversy in the last few days about the naming of businesses. I note, for example, that the Deputy Leader of the Opposition has been criticised for doing so, yet she made it clear in her statement that ‘it is not really about one place’. She went on to say, ‘I certainly don’t blame small business.’

While we are on that subject, I refer to an adjournment debate contribution by the member for Gilmore in which she did far more than name a particular business. She said:

I have been given certain information that suggests that the principals of the franchisors of Bakers Delight engaged in practices that I can only describe as not only dishonest but possibly criminal.

She went on to say that ‘there may have been breaches of criminal law’. She spoke of the ‘orchestrated robbery’ of a person’s business by the franchisors of Bakers Delight. Further, she went on to say:

It is totally unacceptable that any small business can be subjected to intimidation, commercial or criminal, without recourse to some form of effective protection. It is totally unacceptable that an organisation that engages in practices such as these is allowed to continue trading.

She went on to say that ‘this government must intervene on behalf of all small businesses’. I do not think you can get a more blatant example of a government member naming businesses and, in fact, accusing them of possible criminal behaviour.

The member who moved this motion has called on the government to intervene. The government has been in office for 11 years, and we learn in the media that the government is finally going to bring forward some amendments to section 46 of the Trade Practices Act. We will have a look at those amendments, but if the member for Gilmore is making criticisms, surely it is the case that she is making criticisms of her own government, after 11 years. And those criticisms are valid.

Let us understand what this motion is all about. It is about criticising the Howard government for its sloth in not dealing properly with pro-competitive legislation to ensure that there is proper competition amongst big businesses and small businesses and between big and small businesses. So let us not hear anything more about how terrible it is to name a business. Certainly, the Deputy Leader of the Opposition did not accuse anyone of criminality, of orchestrated robbery or of intimidation. This is extraordinary.

The fact is that this government has had a full 11 years in which to do the work that the member, here today in the parliament, is calling upon the government to do. I am very pleased to be able to support this motion. I support the small business community in our country. Almost two million people are small business owners and operators; 750,000 of them employ other people in their businesses and 1.1 million are non-employing small businesses, many of them independent contractors. Certainly, it is a relevant consideration that the Labor leader, Mr Rudd, has appointed a shadow minister for independent contractors, whereas no such government minister exists.

Labor has put forward a range of measures that would make life for small business much easier, one of the most striking of which is BAS Easy. Again, it is extraordinary that the previous speaker, the member for Mitchell, who has left the chamber, said in a recent debate that he would not support BAS Easy—a way of making the GST bookkeeping requirements for small business so much easier. It is an option; it is not obligatory. But if the government was fair dinkum about supporting small business, it would deal with the No. 1 small business paperwork burden—that is, the GST.

I welcome the private member’s motion, but let us understand the inspiration behind it—the member’s discontent with the Howard’s government’s inaction on competition policy. We look forward to getting the detail of the legislation. But, in the meantime, if the member for Gilmore has a complaint to make, she is obviously making it about her own government.

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

It is with great pleasure that I have the opportunity to speak on this motion in relation to small business. A clear contrast is shown between a member who is passionate about small business—who understands small business and realises what small business can do for the community—and the member for Rankin. The position taken by that member is nothing more than an ALP fraud. The ALP, the Australian Labor Party, do not care in the slightest about small business. When you look at the issue of small business, it is not about listening to what they say; it is about observing what they actually do.

What is the Labor Party’s response to small business? They of course have the ability to create hot air and the obligatory rhetoric. But when you look at what they propose to do, you wonder: ‘How is that going to impact on small business?’ I have to say that when I question people in my electorate, they recall the time when Labor was last in power. They certainly recall the negative impact that 21 per cent, 22 per cent and 23 per cent interest rates had on their businesses. They do not look too fondly on Labor’s reign in charge of the economy. They remember what high inflation did to the economy. They remember what high unemployment did to their customer base. They are very aware of the contribution that the Australian Labor Party made to small business.

When we move forward to 2007 and look at the suite of policies which are going to be embraced by members opposite in pursuit of improving the lot of small business, we see that one would have to go a long way before finding a better example of how out of touch they are than the proposal by the Australian Labor Party to repeal the unfair dismissal legislation. They should answer: ‘In what way does dragging a small business owner down to a tribunal to sit there all day and waste time affect small business? In what way does it improve small business for a small business owner to perhaps have to pay $5,000 go-away money to someone who is shonky or stealing from the business?’ That is what the Labor Party are about.

The Labor Party are not about supporting the sorts of people who make an organisation strong and help small business to grow. They are about supporting the members or the employees of an organisation who have no interest in that organisation. They are interested in looking after the philanderers and the go-slows. People who are in small business know that it is a very competitive environment, and everybody involved in that small business has to work hard. There is no room for Labor’s proposal to wind back the unfair dismissal legislation. There is no room in small business for people who do not have the interests of that small business at heart. It is about time the Labor Party woke up to that fact. It just shows how out of touch they are and how out of touch the member for Rankin is in relation to this matter.

When you look at the issue of the Lilac City Motor Inn, you see a family-run small business with hardworking people. They have worked very hard to build up the goodwill and the patronage that supports that business. My understanding from reports of the staff is that they are very happy working there. The staff of that institution are very supportive of their employers; it is a good place to work. So what does the Deputy Leader of the Opposition do? She picks a name out of the phone book and decides to trash that business. I can imagine that small business owners must be living in fear that perhaps the Deputy Leader of the Opposition might open the phone book on swimming pool operators and pick one, saying: ‘Yes, X and Y swimming pools; it is time to trash them today. And when we’ve finished trashing the swimming pool industry, we will turn to another page of the yellow pages.’

Kay Elson (Forde, Liberal Party) Share this | Link to this | Hansard source

Pick on business day!

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

Make it pick on business day, as the member for Forde said, with the Deputy Leader of the Opposition saying: ‘Yes, we could pick another operation—perhaps motor vehicle repairers. Let’s pick any motor mechanic out of the phone book, make up some sort of absurd claim and trash and damage their business.’ They just do not understand small business.

The Labor Party do not understand the fact that it can take a lifetime of work to build a business up, and it can take the Deputy Leader of the Opposition 15 seconds to drag it down again. It is an absolute disgrace. They are a disgrace. They are anti-business, and for them to claim anything else is absolute hypocrisy. The member for Gilmore understands small business and the way in which small business helps to employ people and build stronger communities. The Labor Party’s position is a disgrace. This government supports small business. This government gets the settings right to make small business prosper and grow, and I am absolutely supportive of the member for Gilmore and her efforts to get people in her electorate better employment outcomes and to assist businesses to grow. She is a passionate member with small business at heart.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

My electorate of Parramatta is a special one. I am sure all members say that, but when it comes to business, it is. It has one of the largest CBDs in the country. But, within a few minutes from that, it also has suburban areas. So, in my electorate of Parramatta, some of the biggest businesses in the country and suburbia live side by side. It is necessary for both the biggest businesses in the country and the smallest ones to flourish in my electorate. We do have some extraordinarily large businesses. We have Coca-Cola, Unilever and Westfield Parramatta, all of which bring an incredible flow of people and business opportunities to the electorate, and they should be well and truly appreciated for that.

But, down the road, just a few minutes away we have some very small shopping centres. It is easy to see over time that the power of those large businesses, with their buying power, their ability to cut prices, their marketing dollars and their capacity to seek opportunities elsewhere can slowly suck the life out of some of the smaller centres nearby. I am struck on a daily basis when I visit those centres at how fragile some of those businesses are. They are incredibly fragile. They are affected greatly by some of the smallest changes in economic fortunes, in availability of parking, in bus routes—you name it. The fragility of those businesses is stark, relative to that of the large businesses.

I would like to say how incredibly important those small shopping centres are. Their value extends beyond just the transaction between the person buying the tomatoes and the person selling them. Those small shopping centres provide a place where people meet, where on a daily basis they see people who know them, where they can be recognised and where people who may perhaps have no other contact with people whom they know well can feel seen on a daily basis. They form an incredibly important part of community life. And, for many people, they also form part of their memories. The same person who sold them their papers when they were a kid, or the same person whom they perhaps worked for as a child, is still selling them their papers today. You cannot underestimate the value of the community function of those very small shopping centres.

One of the speakers on the government side spent quite a bit of time today attacking the state governments on small business regulation. I would like to put on record that the plight of some of our incredibly important small shopping centres in both the cities and the regional areas is so serious that it really does require all three levels of government to take this issue seriously. But today I am in the federal parliament, and I am in the federal opposition, so I am going to talk about federal responsibility. The government has talked for some time about the effectiveness of the Trade Practices Act 1974 in protecting small business. In March 2004, the Senate Economics References Committee brought down a report encouraging the government to amend the Trade Practices Act in favour of protecting small business, but the government is yet to act on that. We have had reports lately that there is a bill to be introduced into the parliament, and we welcome that action, finally; we really do. This is so overdue—it is at least four years overdue—and we really cannot wait any longer. It is sad that, with a government that has been in power for 11 years, all we see today is yet another backbencher calling on the government to do something about this, but it really is well and truly overdue.

We on this side of the House welcome the report that the government will amend the market power and unconscionable conduct provisions of the Trade Practices Act. We appreciate that the government is finally acting to strengthen competition laws to protect small businesses from large companies that are abusing their market power. But, as I said before, this is coming at least four years too late. It is of course an election year, and we have got very used to the government making a few extra promises every time an election comes around—and we are seeing it once again. But I say again that it is about time this happened, and we really look forward to debating the bill in this House.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The time allotted for the debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.