Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Competition Policy and Consumer Affairs and Minister for Small Business, Independent Contractors and the Service Economy. Will the minister advise the House of the benefits of the economic stimulus for small business? Are there any obstacles to continued stimulus support for small business?

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank the member for Brisbane for his question and for his ongoing support for all those small businesses in and around the central area of Brisbane. He has been a long and trusted supporter of the small business community there. The national accounts released last week confirm that our fiscal stimulus strategy is working and that Australia is one of the very few developed countries that is not in recession. In fact, it is the only major developed country not in recession. We have now recorded two successive quarters of positive economic growth at a time when, overall, the rest of the developed world is in the deepest recession since the Great Depression.

It was interesting to go through a bit of a breakdown of the national accounts figures because they reveal that private investment in plant and equipment was much stronger than the market had expected. Gross domestic product in the June quarter grew by 0.6 per cent but business expenditure on equipment, plant and machinery increased by 5.6 per cent. Compare that with the overall GDP growth of 0.6 per cent—a very strong result. There was a 5.6 per cent increase in investment in equipment, plant and machinery. It is fascinating because Treasury estimates suggest that that investment in equipment, plant and machinery would have contracted by around three per cent without the small business and general business tax break. That shows how important the stimulus has been and continues to be in supporting small business through these challenging economic times.

It is clear that this strong result is testimony to the small business and general business tax break that was introduced by the Rudd government on 13 December last year, but yet again the opposition leader has shown poor judgment by claiming that small businesses would not take advantage of that tax break. That is what he said: that small business would not take advantage of the tax break. In fact, they have done so. Indeed, the Prime Minister—

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Turnbull interjecting

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

You said it many times. Indeed, you said, ‘If you’re a small business and you’re short of cash, a tax break isn’t much good to you.’ That was one of the many references that you made. The fact is that these figures are very strong: a 5.6 per cent increase in investment in plant, equipment and machinery in the June quarter compared with an overall increase in GDP of just 0.6 per cent—but at least it had a positive number in front of it, whereas the rest of the world had a negative number in front of it, and most of the rest of the world is in recession.

The Prime Minister extended the small business tax break until the end of this year, 31 December, and boosted the rate from 30 per cent to 50 per cent. So small businesses, against the judgment of the opposition leader, are taking to this tax break with gusto. Yet the opposition leader is now demanding that the stimulus be withdrawn. He voted against the stimulus package in the first place, and now he wants it withdrawn. His policy is to pull the supports out of the Australian economy, destroying Australian jobs and Australian small businesses in the process. It is just another example of the opposition leader’s poor judgment. The fact of the matter is this: withdrawing the stimulus would smash small business confidence and destroy tens of thousands of small businesses in this country.

The Leader of the Opposition was asked yesterday to identify any credible source that supported his policy of withdrawing stimulus. He was incapable of naming one credible supporter of his policy of withdrawing stimulus. He is on his own. He is the Lone Ranger, Napoleon Solo, Robinson Crusoe and Dr Zachary Smith up there out on the outer edges of the Milky Way, lost in space, out there on his own. Ground control to Major Tom: you are out there on your own whizzing around the Milky Way, absolutely isolated. Ground control to Major Tom: do not destroy Australian businesses. That is what ground control is saying, Major Tom: do not destroy Australian small businesses. Get in and support our policy, because the Rudd government will continue to support Australian jobs, apprentices, tradies and small businesses in building the infrastructure of tomorrow.