Fran Bailey (McEwen, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to his statement in this House yesterday that the main reasons for the historic collapse in small business confidence in federal government policies were interest rates and inflation. Prime Minister, according to the Sensis business index report, the key reason for this collapse in confidence was that the government’s policies worked against small business. Prime Minister, are you aware of the injury your government’s policies are causing to small business and their employees?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Small businesses are the backbone of the Australian economy. Therefore, it is important, as small businesses are key members and participators in the economy, that this government implements a policy of responsible economic management. The core elements of responsible economic management are to ensure that we put downward pressure on inflation and downward pressure on interest rates. If you fail to do that, what happens is the reverse—interest rates go up, it affects economic activity and growth and then it affects employment. That is why this government, since the beginning of this year, has embarked upon a clear-cut strategy to fight the fight against inflation. We will continue that fight, even in the absence of support from those opposite. If we fail to do that effectively, the roll-on consequences of further interest rate rises for small business in particular would be very bad indeed. That is why the government has a clear-cut policy on a $22 billion surplus. That is why those opposite are conducting, by reverse strategy, a $22 billion raid on the surplus. The second important contribution which we can make in terms of the impact of small businesses out there earning a living and working hard for their families and for the Australian economy is the work that I referred to yesterday by the Minister for Small Business, Independent Contractors and the Service Economy, and that concerns—

Opposition Member:

Opposition member interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I take the interjection, which said that dealing with deregulation is in fact motherhood. I do not think it is motherhood. Dealing with deregulation affects the ability of businesses to conduct their daily business. They say it is motherhood to come up with a proposal which says: ‘Why can’t we just have a single registration of a business name system in Australia rather than six or eight of them? Why can’t we have a system in this country where we move towards a seamless national economy and a seamless national market so that small businesses can grow into medium businesses and can actually expand their operations to different jurisdictions across the country?’ That is why we are engaged—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Prime Minister will resume his seat. Does the member for McEwen have a point of order?

Fran Bailey (McEwen, Liberal Party) Share this | Link to this | Hansard source

Yes, I do, Mr Speaker, on relevance. The Prime Minister is failing to answer the question and I ask that you direct him to answer the relevant question.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for McEwen will resume her seat. The Prime Minister is responding to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The third element which I would draw to the attention of the honourable member for McEwen is this: if you speak to small businesses across the country about the impact of the compliance burden of Work Choices on small business, in particular their five-minutes-to-midnight invention of a fairness test and the impact which that had right across the economy in overall business compliance costs, all of these things add together when it comes to your ability to run a small business successfully. So let us aggregate the scorecard. We come into government with inflation running at 16-year highs. We come into government with 10 interest rate rises in a row. We come into government with them having promised that interest rates would be kept at—

Government Members:

Record lows!

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Record lows. Why didn’t they enter the chorus of response that interest rates would be kept at—

Government Members:

Record lows!

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I don’t think it was kept at record lows. After 12 years in office there was a failure to act on the overall cry of business for some form of regulatory reform which enables them to get on with the job of running their businesses successfully. Then, as the ultimate icing on the cake, an industrial relations system was imposed in the last period of that government which became more complicated than that of the Soviet Union as a result of the impossible burden which it placed on business and their ability to get simple answers from the regulatory authorities as to whether they were in, out, on top of or underneath the multiple requirements—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Hockey interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

which the member for North Sydney introduced in a flight of blind panic on the eve of the election. So, when we talk about confidence for small business, can I say that the inheritance from those opposite is spectacular in its dimensions in contributing to an overall impact on the ability of business to do its job and, as a consequence, that that does impact on confidence. What we, by contrast, are doing is embarking on a clear-cut strategy on dealing with the budget surplus, a clear-cut strategy on dealing with business deregulation and an industrial relations system which gets it right in terms of a proper balance between fairness and flexibility, including the business sector.