Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I rise to draw the attention of the chamber to what is happening to local business across the nation. The global economic crisis is having an impact, but the bigger impact is a crisis of confidence driven by this Labor government’s response to that global economic crisis. When the Labor government came to power, the first thing they did was to talk down the economy and talk up inflation. ‘The inflation genie is out of the bottle’ is what was said. Now that the crisis is upon us, Mr Rudd is siding with the banks and not pressuring them to pass on the benefits of the interest rate cuts. Whose side are you on? Certainly not on the side of small business, not on the side of families who had plans to retire, not on the side of pensioners who expect an increase in your next budget—and now you are saying that an increase may have to be put off until much later.

Last Friday I held a local business roundtable in my electorate of Greenway and I was honoured to have the Hon. Julie Bishop, shadow Treasurer, as my guest to listen to local business owners small, medium and large offer their account of the impact of the Labor government’s imprudent choice of language at this very worrying time. With one voice, this mix of accountants, hospitality leaders, real estate agents, nursery and landscape suppliers, franchisees and customised craftsman-built producers agreed that the Prime Minister, instead of building business confidence and encouraging people to hang in there, was instilling fear and uncertainty. All report an increase in bad debts and a decrease in sales. Conferences and meetings are being cancelled. The feedback is that people are panicky: they have stopped or reduced their spending and they have stopped or reduced their vacations or holidays. More importantly, they do not believe that the recent one per cent drop in interest rates will make any difference in the immediate term. So they are battening down the hatches, making cutbacks in household spending. People who were thinking of retiring are putting it off and holding on to their jobs while that job is still there. For the first time since the 1970s very successful shopping centres have vacant shops. We are seeing an increase in interest for self-managing personal super as people do not want to lose what they have and believe they can take control of their own funds better by themselves. There has also been a shift from tourism into groceries as people prioritise their spending. Businesses report that sales of big-ticket items have slowed and sales of lipstick, champagne and chocolate are increasing—a sure sign that ordinary people are anxious.

What Australian business needs right now is strong leadership and a vision business can believe in. But what do they get? A Prime Minister and a Treasurer who are devoid of ideas and comprehension about what is needed at this time. Thanks to the competent economic performance of the coalition when in government, Australia has been left with an economy that had no government debt and a huge surplus. It is an inconvenient truth for the Rudd Labor government that the coalition has a proven record of sound financial management. The Rudd Labor government has yet to prove itself. To date its record is showing signs of failure—failure to properly and strongly reassure this nation that, because of Australia’s strong economic position, the legacy of the coalition, we have the best chance of any country in the world of riding out this economic storm. There is failure to stand up to the unions, who have become very active since Labor came to government. There has been an 800 per cent increase in strikes this year compared to the same period last year. There is failure to stay home when this government needs its Prime Minister: 16 overseas trips since November and a trip by Mr Swan, the Treasurer, to watch what was happening with the New York Stock Exchange.

The coalition has not been sitting and watching; the coalition has been listening to the public. We have heard the concerns out there in the community and recently the coalition leader and the shadow Treasurer gave Mr Rudd a lesson in leadership. The coalition called on the government to take action immediately to increase the guarantee on deposits with banks, building societies and credit unions from $20,000 to $100,000; to put not $4 billion into the home lending market but $10 billion to make a real difference in stimulating that market; and to abandon the 2010 start date for the emissions trading scheme. Businesses are distracted by the necessity of the 2010 deadline. They should be concentrating on managing their business while the economic crisis looms large.

The test of leadership will be how the Prime Minister responds to the coalition’s call to stimulate the home lending market and to postpone the emissions trading scheme. Make no mistake: Australia’s banking industry is very strong, but business has had enough. They tell me they have lost confidence in Mr Rudd and Mr Swan to come up with the right responses. They tell me that the fear, uncertainty and doubt being put out there by the government are the most obvious sign of what the future holds under Labor.

Business will cope with this crisis. They will adapt and change—and they are already—diversify, cut back and find niche markets. Many will not just survive but will grow. The business people who met with me are ordinary Australians who have worked hard to build up their businesses. They are people who have families. They tell me that the damage being done through the crisis of confidence is being manifested in a number of ways: ordinary Australians, working families, have started migration to the country to cheaper housing; singles and couples have started to move back home with their parents; and financially astute people are paying off credit cards and other debts, even though, as has been reported, that payment is as minimal as $20 a week.

The Treasurer says that Australians should expect higher unemployment as the economy slows down. A strong leader would be looking at job creation but, to date, there has been no leadership in that respect. In fact, the opposite is happening. The government is scrapping Work for the Dole, a very successful scheme that helped the unemployed into jobs. The coalition worked very hard to develop an environment where business had confidence to employ people, and we saw unemployment fall to a record 30-year low. Under Labor, where will we be this time next year? Businesses face a tough time during the current global economic crisis, and they need to be encouraged and given confidence to move forward. The Rudd government had an opportunity to show leadership by pressuring the banks to pass on all the one per cent increase interest rate cut but, instead, it sided with the banks. The coalition called on the banks to pass on the full interest rate cut. We are seeing every day that the people who need relief are small businesses and mortgage holders. Uncertainty is having a big impact and no new jobs will be created. In fact, jobs are being put at risk, but it does not have to be that way.

I return to my opening statement: the global economic crisis is having an impact, but the bigger impact is a crisis of confidence driven by poor leadership and a lack of ideas and a proper understanding of what is happening with small business in this nation.