Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Mr Speaker has received a letter from the honourable member for Dunkley proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse effect of the carbon tax on small business.

I call upon those honourable members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

The small business community have been completely ignored by this Gillard government but are at the pointy end of the carbon tax. Nowhere has this government done any meaningful analysis on the impact of the world's largest carbon tax on the engine room of the Australian economy. If it were not bad enough for small business to be recording a 48 per cent increase in small business insolvencies over the last 12 months and a 95 per cent reduction in small business start-ups, an attack on enterprise, 14½ thousand employing small businesses now not employing Australians right across our continent—a reduction in the share of private sector workforce engaged by small business—the government comes up with a cunning plan, a plan that has no greater adverse impact on any sector of the economy than the small business community, and that is the carbon tax.

This was the carbon tax that small business was promised it would not have to face. Remember those infamous words: 'There shall be no carbon tax under a government I lead'? Those were the words of the Prime Minister seeking re-election. Yet, just a few short years later, here we are, facing the world's largest carbon tax and also facing a further attack on the small business community that this government just seem not to care about.

You heard today the confused message of this government. They were saying how wrong it was for the coalition to highlight that small businesses will be faced with higher costs, how their input costs will go up, how refrigerants will go through the roof, how the cost of their inputs will also go up and how the cost of fuel and other crucial components of a small business doing its business will go up under Labor's carbon tax. We were told: 'No, no; that is wrong. You are just frightening people.' Yet, when it suited, when it was convenient for the government to come at exactly the same topic from another angle and say, 'Oh but there is compensation to account for these cost increases'—arising from the carbon tax that they have just gone on saying that small business was not going to face—we get a completely contradictory story from this government.

Little wonder then that the small business community is completely bewildered by what the government is up to. Many took the government at its word that small businesses would not have to plan for a carbon tax. Yet here they are, confronted with the world's largest carbon tax. Small business heard week after week about the carve-outs, and the compensation that everyone was going to get, and how this would be such a soft landing of a carbon tax, only to find now that the only people to miss out on any direct support whatsoever are the small business community. They have not got any of the hush money that is being dished out to Alcoa. They have not got any of the bailouts—the 'Let's hope that the economic and employment consequences of the carbon tax can be pushed further away from its introduction date'—payments.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. The term 'hush money' was mentioned yesterday and it was found to be not appropriate language. I ask that it be withdrawn.

Mr Billson interjecting—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Dunkley does not have the call. The withdrawal of wording is often within the context. The member for Dunkley will be able to continue.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Thank you, Sir. All the small business community—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

'Sir'? I think I might ask you to withdraw that!

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I am perpetually deferential! All the small business community have got is haranguing from this government—no direct assistance; just this verbal abuse that, if they dare put up their prices, they will have the full weight of the ACCC coming down on them and yet, at the same time, households are being told, 'Well, there might be price increases but we have compensated you for that.'

There has been no modelling done by this government on any impact of the carbon tax on any small business type or size, on any goods or services that they provide, on any different business structure, on any supply chain, where the carbon tax builds and builds and builds at every step along the way.

Think of an ice-creamery in Hervey Bay. There they have to face a range of impacts. Let us talk about the dairy. The simple milking of the cows is going to have a carbon tax impact—an energy-intensive hot-water requirement to maintain hygiene. The freight costs will then get moved on. You then go beyond to the dairy itself, once the cows have been milked, to process the milk—energy-intensive; perishable goods; refrigerant everywhere. It then may go on to an ice-cream manufacturer—same all over again: embedded energy costs of the earlier stages plus their own refrigerant, their own energy costs, their own transport costs, their own impact on packaging. It will build and it will build.

Because the ice-creamery that Mr Neville and I might run at Hervey Bay is a small one, we cannot buy directly from the wholesale manufacturer; it would probably go off to a midpoint, not directly from the producer of the ice-cream but a wholesaler, and then maybe on to someone else, and finally we might get that input. The world's largest carbon tax has built at every stage of that production process—has accumulated, has compounded. Hopefully there is a margin on top for the business so that they can stay afloat to go and employ people.

Then we face the consumers, who have heard the government go around saying, 'Only the top few hundred emitters will be paying the carbon tax.' No, that is wrong; we will all be paying the carbon tax. We will all be paying the carbon tax, and every small business will be hurt by the carbon tax. And where will their compensation come from? Well, there is none. There is no compensation whatsoever.

So what has the coalition had to do? The coalition has had to go out there and do the government's work for it, to explain that there are impacts in the supply chain and in the energy costs that are going to affect small business. It has been the coalition that has had to provide the small businesses with the assistance to communicate the very essence of the government's scheme—that these cost impacts will work their way through the system, that somehow people will only buy half an ice-cream rather than a full ice-cream, and the costs will be passed on but the consumer is being compensated.

Has the government bothered to explain that to anybody? Has the government sought to assure small businesses that the very design of its carbon tax is intended to push up their costs, is intended to have an impact on the supply chain, is intended to make refrigeration more expensive, and is intended to then be passed on, as the Prime Minister ultimately conceded in her contribution today? No, it has not done that at all. The government has gone out there trying to create a completely false impression of who is paying for the carbon tax and what it actually means for consumers. So we have had to do the government's work for it. It has done the ads, where the carbon tax dare not speak its name and there is a household assistance love just falling from the sky—apparently for no other reason than the benevolence of the government. You have then had no assistance from the Marcel Marceau of small-business ministers—never utters a word about the impact on a key area of our constituency. So the coalition has had to do it. The coalition has had to provide small businesses throughout Australia with an easily understandable, accurate, reliable and dependable explanation about the government's carbon tax.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Dunkley has used his props sufficiently.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Oh, Madam Deputy Speaker, I have not even waved the grocery document around yet, or the dry cleaning one.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Yes, yes. The member for Dunkley can put away his props.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

There are more, and I would like to thank the government—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Dunkley.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

for highlighting the availability of these very useful information documents.

The government has not done any modelling on the impact on small business. It has not provided any advice about how small business and its consumers will feel the pain of the carbon tax. It has then gone around accusing the opposition of making false claims, when we are actually providing the only reliable, accurate and dependable information that is out there. We then had the Assistant Treasurer having a go at me and the Leader of the Opposition, saying that these documents were misleading. That only lasted about an hour. When he came into this place he was very smart not to repeat that claim, because he knows it is not right. These documents are accurate and reliable, and they communicate the reality of the carbon tax impact on small business.

When we come to false claims, where do you start? Can you get past, 'There will be no carbon tax under a government I lead'? That is a whopper of a false claim, and it is lucky that the ACCC does not have a crack at prime ministerial statements. But it goes further than that. We have seen the Prime Minister assure, in her words, 'small business families and tradies' that there will be no impact on fuel, yet we know from the Australasian Convenience and Petroleum Marketers Association that that is not true either. They said that is simply not correct.

There might have been a few freebie permits given for refining, but that is it. It is all the way through the movement of that fuel—its storage, its production and its distribution to the petrol sellers around the place. With the cost of running a service station, ACAPMA itemise every step along the way post the refinery process, where the carbon tax is going to push up the cost of production and put upward pressure on fuel. That is another false and misleading claim by the Prime Minister.

Then there was another one. Remember when the Prime Minister was in Brisbane and she said, 'I am sure most businesses will do the right thing, but if anyone dares put up their prices by more than one per cent they will be price gouging and we will send the ACCC after them'? People stopped and thought, 'Gee, that's interesting. Maybe the government has done some modelling that they have locked away along with the modelling for the taxation review that no-one can get a look at. Maybe it's just tucked away in a secret file.' So we ask the question: where did this claim come from? Where is the evidence to back it up? Where is the data, the analysis, to support what amounted to a prime ministerial decree on price movements arising from the carbon tax? Do you know where it is? It is not anywhere. It is not in here, in the dispatch box; I had a look and I could not find it in there. I have asked the small business minister to produce some in consideration in detail. There has been none. We have asked time and time again: where is the detail to substantiate that claim? The answer? There is none. There is no detail to substantiate what is the most blatant verbal haranguing the Prime Minister could give the small business community—accusing them with no analysis of what the cap would be on price movements.

What is worse, she did not even accurately reflect the law. In Australia we have no law that mandates a cap on price movements and no requirement for people to disclose exactly why they have arrived at the price they have. If you do not like the price, you can go somewhere else. If you have decided that you want to structure your business from certain price points, you can do that. That is why we live in this market economy. Does the Prime Minister get that? No. The centralised view is that everything comes out of Canberra. She must think you have to approve it or something, but that is not the case.

The law actually says that small businesses, when they are making representations, cannot be false and misleading. What the Prime Minister did was falsely and in a misleading way incorrectly characterise the law to frighten and intimidate small business so that she can run around, saying, 'See, there is no impact. We were right with our wildly conservatively understated estimate of the price impact of the carbon tax. Look at that.' What is the consequence of that? What is the effect for small business in an already difficult trading environment, with wafer-thin margins, no sloppy profits to be found, costs going up everywhere and their own energy costs, all of which we have seen in government reports in which they have been understated over and over again?

Rent is going up, gas is up and electricity is up. They have never run a business and, since I have been the shadow minister, we have our fourth small business minister that we are going to have educate about what a small business is. I am happy to keep working at that but please help me. It is an enormous task because there is no early evidence that I have been successful in letting the minister know what the impact is on small business. Have a look at some of these documents. We are doing the government's work for them, communicating the very essence of the scheme, as they describe it, and then they accuse the coalition of doing the wrong thing. You should be doing that, Minister. That is what the shadow small business minister and the opposition leader would not have to do if the government were fair dinkum and had half an interest in the plight of small business in this economy.

It goes further. The Assistant Treasurer, after not repeating his unsubstantiated claim in the media today about the nature of these documents, has scurried off, but he has made a contribution elsewhere. I raised the impact of the carbon tax and what it would mean for Westfield Penrith. There is now a carbon tax escalation clause in the lease of their tenants, so you have tenants faced with having carbon tax escalation factors affecting their leases, their direct energy costs, and we could have a long conversation—and I hope we get the chance—about the impact of energy costs in off-peak rates. I have had small businesses say to me, 'We have had to structure our business because we are a heavy energy user and we do the bulk of our heavy energy use during the night because the tariff is lower.' We have heard this right around the country, and they will get an enormous increase in their costs.

When we talked about Penrith, and the member for—wherever the election is.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Lindsay.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Thank you; the member for Lindsay.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Apparently it's near Darwin!

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Apparently it's south of Adelaide—a bit like the earlier question when we were talking about Whyalla.

The Assistant Treasurer said, 'The cost increase in electricity from the carbon tax would be only 0.2 per cent of overall expenditure of a typical small business, based on Treasury modelling.' What is this 'typical business'? We have not been able to find one. You might have noticed that we have visited quite a few lately, and we are trying to work out what this typical business is that has been subject to the invisible Treasury modelling that has not been released; it has probably been taken by Captain Emad on his travels. We do not know where that is, so we are saying, 'If that is the basis of your claim, produce some facts so that the small business community can actually see what's going on'.

What has not been produced is the evidence that the government has appreciated that its carbon tax will push up the price of electricity, gas, refrigeration, rents, produce and supplier costs. It builds, it compounds, it increases all the way through—and the small business men and women will have to face the customers who have had a diet of nonsense from the government about how only the top few hundred will be paying this tax and explain to them, 'No that is not right; we are all paying this tax'. That is why these publications are so important. I commend them to you, Madam Deputy Speaker, if you would like some of them to be circulated in your own electorate.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

No, no.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

What is happening here is that the small business community know they have no friend in the government. They are not sure anyone in the government could recognise a small business. They have seen no evidence that the plight of small business, a crucial contributor to our economy and our communities, has featured at all in the government's consideration around the carbon tax. This carbon tax hurts no-one more than the small business community and the government should be condemned for their indifference. (Time expired)

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Emergency Management) Share this | Link to this | Hansard source

The member for Dunkley sometimes thinks that the faster you talk and the more words you use in 15 minutes somehow provides a compelling case in advance of his particular resolution entitled: 'The adverse effect of the carbon tax on small business'. I listened closely to the member for Dunkley, but at no point did he really outline the case that there was a significant impost upon small business. In fact, this government has been very focused to ensure that small business was impacted in a very negligible way by pricing carbon. The last thing we will do is be lectured to by the opposition who, when in government, imposed the GST upon the small business community. The last thing I really need is a lecture from the member for Dunkley on how to look after small business, given the efforts by the Howard government to turn every small business in this country into an unpaid tax collector. So I need not have any lectures from those opposite. Even when I go around the country and speak to small businesses and ask them about government regulation, the first thing out of their mouths about the concerns they have in relation to government was the imposition of the GST and its impact upon small business. So I hardly need any lectures from the member for Dunkley or the Leader of the Opposition in relation to how we look after small business in this country.

With that in mind, this government wants to ensure that the small business community would not have any imposts placed upon them in relation to pricing carbon in the context of this very important reform. As the Prime Minister and others have said, it is important that we bring about this reform for this country so that we do reduce carbon and see some structural change in our economy, because we are a high carbon emitter. That is important. At one point in time every Liberal leader and Labor leader supported a market based approach to pricing carbon. Indeed, Prime Minister Howard supported a market based approach to pricing carbon. Malcolm Turnbull and Brendan Nelson did. And, of course, Tony Abbott, the current Leader of the Opposition, did at one point support a market based approach to pricing carbon when it suited him, and when it suited him to do otherwise he chose to wage one of the most reckless and negative scare campaigns this country has ever seen upon Australians and, in particular, on the small business community. I find that rather offensive and very unfortunate.

But I do believe that the small business community are very sensible, hard-working Australians and when the facts reveal themselves from 1 July they will realise that the myths and the untruths told by the Leader of the Opposition and by the member for Dunkley and others will be exposed and the truth will reveal itself. We do this important reform knowing it is difficult but knowing it is essential, and we do this knowing that we are in a very good economic situation. It is important to make that point because we wanted to ensure that small business are able to cope with these changes, negligible as they are, upon them. Just remember this: no reporting on carbon; no requirements to report to government; no tax to be paid; no tax to be collected; and, indeed, in relation to the CPI, a 0.7 per cent impact. For that reason, there are some follow-through on costs, but they are relatively negligible. They are about one-quarter of the costs associated with the GST. We are not even taking into account, of course, all those other imposts that were applied by the Howard government on the small business community.

Can I remind the House that we do have a very good economic conditions? We are returning the budget to surplus—that is very important—to provide confidence both here and overseas about the state of our economy. We are one of the very few developed nations that can even make that point about returning the budget to surplus. We have relatively low unemployment, around five per cent, and an increasing participation rate in our economy. We have very good economic growth and the lowest official cash rate that we have seen at any time under the Howard government. We have seen a reduction in the official cash rate in the last couple months of 75 basis points. What does that mean for small business? That means it provides them with greater opportunities to access loans, because interest rates are falling. And, of course, we have seen contained inflation. To see lower unemployment and contained inflation in this way is truly remarkable in the context of other developed nations around the world who are confronted with double-digit unemployment, inflation and some very serious challenges to their economies.

What we also did in order to ensure we provided support for small business arising out of the budget is that we announced a number of initiatives that we believe small businesses will embrace and indeed are embracing. Firstly, we introduced the instant asset tax write-off, which allows for assets purchased up to $6,500 and instant depreciation of 100 per cent after the first year. This has been well received by small business, really providing opportunities for cash flow. Indeed, I should add that because the depreciation is paid in the first year it reduces depreciation schedules, which will ensure far less paperwork for small businesses. That is very important for those microbusinesses where they are doing most of their own bookwork and they do not want to have to fill out forms unnecessarily.

The other thing we are doing is introducing the loss carry-back scheme. This is a scheme that has been very well received by incorporated businesses, 90 per cent of which are small businesses. This will allow for businesses to reclaim tax they have paid up to two years earlier when they make a loss or reinvest in their company—perhaps to substantially upgrade their equipment or to reduce energy consumption. This is a very important initiative. It not only provides opportunities for about 110,000 companies, particularly small businesses, to invest and innovate but also creates confidence in the small business sector to invest, and that is important for our economy and for the small business community generally.

I would also like to say that, for two-thirds of small businesses, we have seen the trebling of the tax-free threshold to $18,200—remembering that two-thirds of small businesses are not incorporated and they too, therefore, will benefit from that initiative. This is literally taking one million Australians out of the tax system. This is something that is remarkable, and no other government would be trying this on at this time—certainly amongst the developed nations—because they would not be able to do it. But good economic handling and good fiscal management have created the environment for the Reserve Bank to apply monetary policy. We are seeing some very good arrangements and a very good economic environment in which small business can thrive.

That is not to say there are not challenges. Those challenges, of course, include the high Australian dollar, and it is for that reason that we have had these initiatives targeting small business in sectors of our economy that are not doing as well as, of course, the mining sector. This is, I think, a very important thing to note. I should also add that there is also the instant asset tax write-off for vehicles, under which businesses can receive a write-off of up to the first $5,000 of a company vehicle. These initiatives combined provide great opportunities for small businesses in Australia.

I heard a lot of bluster from the member for Dunkley, but the facts are these: there are no direct taxes that apply to small business. The misinformation that is being spread by the member for Dunkley and others is, of course, untrue. In relation to energy costs the Treasury, of course, have done their modelling and the average energy cost of a small business is two per cent of overall costs, and there will be a 10 per cent increase on that two per cent—0.2 per cent of overall costs to a small business. Of course we would expect those modest or negligible prices to be able to be passed on to the consumers. Why? Because we have managed through this effort to make sure that pensioners, parents and students are provided with cash payments, and we have also ensured that from 1 July workers will receive tax cuts, and in most cases they are ongoing. So I think it is really important to note that the government has taken account of the small business situation to ensure that they are not having to report to government, that they are not having to apply or collect a tax and that they will be compensated for the modest cost that will be passed on because they will be able to increase, very modestly, those prices.

The 0.7 per cent CPI increase that was shown by the modelling done by Treasury has now been affirmed by many, many other bodies, including other governments. We saw when the Western Australian government handed down its budget that it too confirmed that there would be a 0.7 per cent increase to CPI. We have seen that now with other governments, confirming the Treasury's modelling that that is indeed the increase to inflation. That is, as I say, very manageable, given the economic circumstances that we are in.

That has not, of course, stopped the opposition trying to scare people in, I think, a very irresponsible way. There is no doubt in my mind when I look at some of the indicators insofar as consumer confidence and business confidence are concerned that, whilst—I think legitimately—some concerns have arisen as a result of what is happening in Europe and the United States, the efforts by the opposition to effectively spread untruths throughout the community have had a big impact upon consumer confidence. I think that is an irresponsible act by the opposition. It is irresponsible, I think, to trash your own country's economy. It is irresponsible to say things that are not true and to suggest that things will happen when they will not happen. To suggest for a moment that a community can be used as a prop—that Whyalla can be used by the Leader of the Opposition as a prop so he can say that they will be wiped off the map—is an irresponsible act by the Leader of the Opposition, and it goes to the character of the Leader of the Opposition. To suggest that a country town that is growing economically and, as the Minister for Regional Australia, Regional Development and Local Government said in question time, is growing in population will be wiped off the map is an irresponsible, reckless and destructively negative thing to say in relation to that very important community, as is the case with his references to other communities throughout this country. It says more about the Leader of the Opposition than it does about anything else that he is willing to do that.

But he is not alone in his efforts to misrepresent the facts as they stand. The member for Dunkley has been making a case that there have been 18,000 regulations created to hurt small business. Not only is this number ridiculous—an outrageous exaggeration of new regulation in order to, I guess, scare people—but the fact is that they are counting a multitude of regulations that have no impact on small business at all. Indeed, nearly 40 per cent of the number quoted refer to tariff concession orders and airworthiness directives. These are the things that the member for Dunkley puts in his media statements to suggest that somehow we are further regulating small business—a complete and utter mistruth and myth that is seeking to scare small business. These are some of the other regulations that the member for Dunkley has also included in the 18,000. For example, he says that an instrument that implements the ban on big banks engaging in anticompetitive price signalling, with a clear consequent benefit for small business, is one of the regulations which are an awful thing being introduced by the government. Indeed, he also says that Select Legislative Instrument 2011 No. 125 amends measurement regulations so that point-of-sale systems and other measuring instruments may be patent approved for use of trade. If a system is approved once, it is approved for all potential users. This is a clear efficiency to business. However, the member is putting them in with the 18,000 regulations. This is all about the scare campaign waged by the Leader of the Opposition. He should hang his head in shame. (Time expired)

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on this matter of public importance because it is indeed a very important matter. The future of small business is a very important matter not only for the entire country but also particularly for regional Australia, which does not have the large employers that the city has. So many of the jobs in the regions are generated by small business.

I believe the minister is a decent man but, unfortunately, I do not believe he understands small business. I do not think he goes and talks to the people on the street, on the high street, in the shopping centres and in the factories who are making it happen. These are the people who work 100 hours a week, who have mortgaged their houses to run a small business, who employ people and who worry day and night whether their business will survive. What is the assistance they get from this government? They get a massive new tax.

Small business has been caught in a bind for some time, with increasing costs and flat and falling revenues. What is the government's answer to that? It is a massive new tax. I was stunned, in fact, when the government proposed a carbon tax that was supported by the member for Lyne and the member for New England—two members who represent regional seats, who represent areas highly dependent on small business and who should know better. The reality is, because of this government every power point has been turned into another department of the tax office. Every time a small business uses power it is effectively paying the carbon tax. It is an untruth to try to claim that only the 500 largest companies pay this tax; every small business in this country pays this tax. Every small business is being hindered in its efforts to create employment by this tax. Every small business is being made less competitive by this tax, and this government, the member for Lyne and the member for New England should hang their heads in shame.

When I go around my electorate I hear people who are very worried. They worry whether their business is going to be able to continue. They tell me they are just hanging on. They tell me they need to get rid of this government. Consumer confidence is low and business confidence is low, and what assistance do they get? They get a great big new tax.

I was talking to Russell Greenwood, a butcher in my electorate. He is hardworking—works seven days a week—employs people and pays his way, and what does he get from this government? He gets a new tax. When I visited Russell he said: 'I've been speaking to a lot of small businesses in this town and, I suppose, as far down as Wollongong and further along the eastern seaboard, and everyone feels the same way. The carbon tax is just going put more and more costs on small business and, besides that, by and large big ones as well. It will end up and turn out really hurting people, so as far as I'm concerned it's going to put people out of jobs. It's going to put a strain on businesses—as if the costs of running a small business aren't bad enough already. I think that the backbone of this country is small business, and if this carbon tax goes ahead, well, it's going to crucify and close a lot of stores which are already closing. People are finding it very hard out there in this economy, and I think it's just going to get worse and worse if this carbon tax goes ahead.' I think Russell has pretty much summarised the thoughts of many small businesspeople.

I talked to the owner of another business, who asked not to be named, and they said: 'The increase in the cost of doing business is killing us. We're reducing our opening hours. We're trying to cut costs. The introduction of the carbon tax will probably be the final straw for us. We have no choice but to lay off staff. At the moment we are looking to cut seven jobs from our business.' How is that helping Australians? We know this carbon tax will not work. We know our emissions will rise and that the pain of small business will also rise.

The government is trying to claim that only 500 companies will pay the tax, but we heard in question time today that refrigerant R404A is going to be hit by a massive carbon tax that will increase the cost of the gas from $92.88 per kilo to $377.71 per kilo. That is a massive increase. Faircloth & Reynolds, an air-conditioning business in Coffs Harbour, which is in my electorate, has six vans and employs a combination of experienced operators and apprentices. Dave Reynolds told me that it will cost an extra $4,000 to stock each van. That is an extra cost being put on this business by this government. The government says only 500 companies will pay that, but that is about as credible as the claim, 'There will be no carbon tax under a government I lead.'

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

There will be no government either.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Absolutely, the member for Calare. Small businesses are already attempting to cut costs.

Government members interjecting—

Those on the other side might well laugh at the plight of small business, but those businesses are not looking as forward to the introduction of this tax on 1 July as those opposite are, I can tell you they are not. They do not want to be driven out of business by the government's incompetence. The thing about the Labor Party is it just does not get small business. It just does not get how hard it is to make a profit because probably none of them over there have ever made a profit. They have only ever had a union salary which comes in every fortnight, no questions asked—not like the people who are in small business who have to struggle to make it pay. They have to do a job, get paid for it and make a profit, and what do those opposite do to help? They tax them with the carbon tax. They try to tell us that it is not going to affect the cost of petrol, but who is going to believe that? Who believes that there will be no energy used in the production, distribution and retailing of petrol? Who believes that?

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

Or the diesel used to transport it.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Or the diesel used to transport it. What we are going to see is a rise in the cost of petrol and a rise in the cost of diesel because of the carbon tax imposed by this government.

Transport industries are doing it tough. I was talking to Graeme Nicholson, from Nicholson & Page Transport in Maclean, who told me that the additional cost of the carbon tax will hit his small trucking operation hard. He said: 'It might be all right for road freight companies with the benefit of large, diversified logistics and storage operations but for smaller operators solely focused on long-haul transport the impact on their bottom line would be significant.' These operators are also facing an increase in the road user charge from this government. This government does not have a clue about the impact of this tax and the impact of increased costs on small business.

We need to encourage small business. I heard the minister talk about a range of government measures allegedly to assist small business. The best thing this government could do is not to implement this tax. The best thing this government could do is to call an election and hand over to someone who can run the economy—hand over to the opposition, because we could restore business confidence. We could restore consumer confidence, because they are concerned about your competence. One of the biggest factors in the economy at the moment is that the Australian people do not believe this government has the capacity to make the correct decisions on behalf of Australia. That is being reflected right throughout the economy.

We see people in small business doing their very best to keep their costs down. We see this government doing their very best to push costs up. On 1 July in my electorate we will see electricity prices increase by almost 20 per cent, half of which is due to this government's carbon tax. We have to encourage small business. We have to assist small business in what it does best—that is, employing people and creating wealth, particularly in the regions where small business is so important. The thing we must not do is restrict small business and retard its ability to employ people. This government has proven time and time again that it does not understand small business. If it is not more red tape, it is more taxes. If it is not more taxes, it is more bad decision making. This is just a prime example of that.

The Independents should hang their heads in shame at the fact they are supporting this government to implement this tax that is going to be so damaging in regional and rural Australia. In fact, on the weekend we are going to have a preselection in Lyne, and the people of Lyne will see a National Party candidate appointed. From this weekend on the people of Lyne will have a pretty clear choice—they will have a choice between a candidate who will pledge to repeal this tax, pledge to take the pressure off small business, and the member for Lyne who is keen to introduce this tax that is going to increase over time. This tax is going to put more and more impost on small business and is going to be jacked up to $350 a tonne, by the government's own modelling, by 2050.

The government and the Independents have no shame. They are going to crucify small business. It is about time this government handed over to the coalition to manage the economy strongly, get small business confidence up, get confidence in regional Australia up, so that small business can get on with its job of employing people.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I am very pleased to rise today to speak on this matter, because as everyone in this House knows, whether they admit it or not, for many months there has been a shameful scare campaign on the carbon price led by the Leader of the Opposition. We have a Leader of the Opposition who has been running around the country making false and misleading statements about the impact of the carbon price. We have a Leader of the Opposition, and many of his colleagues in the opposition as well, talking down the economy. We heard a bit more of that from the member for Cowper, undercutting business certainty, making false claims, making dishonest claims. We have heard that Whyalla is going to be a ghost town. We have heard the coal industry is going to die. We have heard that price rises will be unimaginable. These are claims that are hollow, they are false, they do a grave disservice to our nation, and they are not befitting of the leader of a major political party.

Just now the member for Cowper mentioned Wollongong. I was in Wollongong on Friday, as it happens, addressing a business forum and addressing a forum of councils. I have addressed business forums right around the country and what I have found repeatedly is that when we lay out the facts—when we actually dispel the fog of misinformation that has been created by this opposition who have no interest in telling the truth about the carbon price, have no interest in explaining what the actual modest price impacts are going to be—and the facts are put before businesspeople in this country, usually there is an acceptance and an understanding. Indeed, from many businesspeople in this country who understand that the future of this country lies in our developing a low-carbon economy there is support for the carbon price.

This Leader of the Opposition has been caught out writing to small businesses, again trying to conscript small businesses to his scare campaign. The Leader of the Opposition has been caught out writing to small businesses around the country trying to scare them about the impact of the carbon price, trying to give them the green light to jack up prices. He has written to butchers, he has written to bakers and next, no doubt, he will be writing to candlestick makers. That is because no part of this economy is safe from this opposition. Even the 1,900 jobs that regrettably will be lost from the Fairfax media organisation have been attributed by this opposition—specifically by Senator Brandis in the other place—to, wait for it, the carbon price. The loss of 1,900 jobs that, it has been said, are going from the Fairfax media organisation has been attributed to the carbon price as well, and that is the kind of nonsense that the opposition has been going on with for many months, and no doubt they will continue to go on with it for months to come.

It is not the first time that the Leader of the Opposition has tried to enlist butchers in his scare campaign. His conscription of a butcher last year was when he visited a butcher's shop in Sydney. Then the butcher told the Sydney Morning Heraldand I will use this as an example of the misinformation that we have had—that his electricity bill was around $22,000 per year and the revenue of his business was around $2.1 million per year. Some pretty simple arithmetic tells you that that means that electricity represents around one per cent of the turnover of that particular butcher's business, and the electricity cost increase from the carbon price would represent around 0.1 per cent of turnover. This is the nub of this claim: to pass on that cost increase—the primary cost increase that is the increase in electricity cost of 10per cent, because every other cost from the carbon price is far, far lower, so I am just dealing with the major cost increase of 10 per cent—the butcher would have to increase the price of an $11 packet of mince by approximately 1c . That is right: he would have to increase the price of an $11 packet of mincemeat by approximately 1c. But of course that does not stop this Leader of the Opposition running around trying to scare pensioners, scare small businesses, scare anyone in the community that he can get hold of. That is why it is to be expected, given his conduct over the last several months, that the Leader of the Opposition is encouraging small businesses to increase their prices and put signs in their windows, authorised by the member for Dunkley, blaming the carbon price. The Leader of the Opposition should know full well that if businesses make false claims they run the risk of breaching the competition law and could expose themselves to a $1.1 million fine. The member for Dunkley should be very careful holding up his misleading piece of paper.

The opposition leader does not care; the member for Dunkley does not care. They do not care about small business. They do not care about potentially exposing butchers, potentially exposing bakers, potentially exposing even candlestick makers or any other small business that they can conscript to their campaign. They do not care about potentially exposing them to large fines if they act as suggested in the Leader of the Opposition's letter. All the Leader of the Opposition wants to do and the member for Dunkley wants to do is use small business as a political pawn, to co-opt small businesses into playing a role in the misinformation campaign that the opposition is determined to conduct.

The fact is that small business will not even pay the carbon price. A range of large polluters is going to be paying the carbon price and the list of those polluters was finalised on 15 June. There may yet be some other businesses that, by the development of their business, become liable to pay the carbon price but the list as it stands is around 294 entities, firms and councils. For small business, which will not be paying the carbon price, the government has put in place a large range of measures to support small businesses and to help them grow and prosper.

There may be some increases to electricity prices. We have never hidden that but they will be modest. I say 'may' because it depends on the use that is made by businesses of electricity, the choices that they make.

Mr Billson interjecting—

We are talking about small business. The member for Dunkley seems to have forgotten that. If businesses invest in energy efficiency and reduce their energy costs then they could be better off overall with lower energy bills because they choose to invest in energy efficiency. Businesses around the country are increasingly understanding that an investment in energy efficiency will save money in the long term—again, not something the member for Dunkley wishes to understand.

Of course there is concern about electricity costs in the community. That concern arises from the fact that we have had very steep rises in electricity costs over the last few years. But we have, regrettably, a Leader of the Opposition and colleagues with him in the opposition, including the member for Dunkley, who wish to hysterically attribute all manner of ills to the carbon price, a carbon price that has not even started yet.

I want to put the electricity price impact of the carbon price in context. There will be inserts in bills in most states that will explain this to consumers and might, in fact, dispel some of the nonsense we have had from the opposition. According to Treasury analysis, of every $100 that is to be spent on household electricity bills in the next financial year 2012-13, $51 will pay for the poles, wires and transmission towers; $20 will pay for the wholesale cost of generating electricity; $20 will go to retail costs, consumer service and programs for energy efficiency and renewables; and $9 will go to the carbon price. That is why it is so important to put in context what these price rises mean and that is why it is so important that the debate in this place should be based on actual facts.

We have had from the Leader of the Opposition and those with him nothing but misinformation about the impact on small business, nothing but misinformation about the impact on the economy generally. In five days we will have a carbon price in this country and we will be well on the way to a measured, carefully crafted transition to a low-carbon economy. It is a policy that will help the Australian economy adapt to change and to grow while leaving a cleaner and more prosperous future for our children and for their children. It is a policy that we on this side of the House are very proud of. It will be looked back on as a watershed in Australian economic history when we set this country on the path to the low-carbon economy that our people deserve. It is a plan which is central to Australia's economic competitiveness. In decades to come, low-pollution technologies will be crucial. (Time expired)

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this most important matter of public importance. I find it incredibly ironic that Labor's Minister for Small Business is also the Minister for Homelessness. That says it all for me as to where their heads are at when it comes to this. The best thing is that when you lose the lot, when they force you out with this carbon tax, when they force you out that with all the regulations, you only have to keep the one phone number. You will only have to ring the one minister. He will still look after you all the way through.

The minister stood there and said to us it is only going to affect small business in a negligible way. Look out the window, mate. He says we are in good economic condition. Can you look out the window and see that small business is hurting. Can you walk through the shopping centres and see the shops that are closed. Can you walk through the industrial estates and see the sheds that are shut, the fences that are locked, the 'for lease' signs up in those places. You will see that there are sections of our economy, sections of my community, sections of this country which are doing it very tough.

The minister stood there and said that the cash rate is incredibly low. He said it is lower than in the Howard years. Who is paying the cash rate? I looked up my mortgage this morning. My mortgage rate is nowhere near the cash rate. I spoke to five small businesses in relation to their overdrafts and their loans. Not one of them was paying the cash rate, not one. The interest rates on all their loans were lower in the Howard years for their business loans than they are now. The banks are not even lending to small businesses at the moment. It is high risk lending.

I have a good friend who made his pile when Pardon won the cup. He started his business soon after I came to Townsville. He was a boilermaker by trade but he started a transport business. He has since retired. He said to me the other day: 'You know, the way this government is at the moment, I couldn't do what I did again. There's no way in the world that I could start a business, make it run—especially in transport with trucks and cranes. I couldn't make it run. I couldn't get a small business up today, because nobody would lend me the money to start off with. It's too dear. It's too hard. There's too many forms all the way through.'

The parliamentary secretary stood there and said the Leader of the Opposition goes to butcher shops. I was at my butcher's on Friday. He has been told by his power supplier of a 22 per cent power rise. It used to be $80 to fix a refrigerator that was broken and needed to be re-gassed. It is now up to nearly $300 because of the carbon tax on refrigeration. The parliamentary secretary stands there and says it is not going to hurt—that it is not going to hurt because it does not matter; it is a negligible effect because you will not pay it. What is the point of the carbon tax if it is not to drive up electricity prices, if it is not to make other forms of energy more competitive? It has to hurt; otherwise, why would you change? Otherwise, why is this government throwing money at people all over the place? The parliamentary secretary stood there and said that small business will not even pay it. He did it with a straight face, which I thought was admirable!

He said the big polluters pay it. Of course the big polluters are charged, but they pass it on. All business charges it on to the end user. Remember those people you are throwing the money out the window at? They are the ones who will pay it. They are the ones who will go into the ice-creamery at Hervey Bay and ask for a half scoop of ice-cream. A half scoop of ice-cream at Hervey Bay! Who has ever heard of it?

Every business in my electorate pays rates and has the rubbish collected in Townsville. My council, the Townsville City Council, have been named as one of those councils that will be exposed to the carbon tax. I am writing to the council to ask them to write to both state and federal governments about their liability. The state government forced the twin cities of Townsville and Thuringowa to amalgamate. I want to find out whether, if they were still separate councils, they would be liable for the carbon tax. If so, what compensation can they expect from both levels of government; if not, why not? The Townsville City Council have used Treasury's modelling alone, which says there will be $3.5 million to $5 million a year on the dump alone, and that is before the council turn on a light, start a car, start a truck, fill a hole in a road, start a bus, turn on a streetlight, mow a lawn or turn a sprinkler on along the Strand. It is before any of that, and that is all subject to electricity and all going to cost. Every bit of it will attract the carbon tax and every bit of it will have to be paid for. The Townsville City Council are receiving no compensation, so what will the council have to do? They will have to either withdraw services or increase rates, but the council with their new mayor, Jenny Hill, have said that they want a freeze on residential rates. Does that promise extend to the commercial rates paid by small business in Townsville? I think not.

Council charges are just one area where small businesses will cop it in this toxic carbon tax. Everywhere the small business men turn they will be faced with the increased charges and costs due to the carbon tax. Michael Burge owns a grocery store in Townsville. He is quoted in the Townsville Bulletin as saying:

'It's concerning from a business perspective because we know this decision will carry added costs for us that we will have to pass on to the consumer.'

'It's not just a blanket tax on store owners, it will be felt through all levels of business.'

'All our suppliers have a power bill and will be forced to pass on any input costs associated with the carbon tax on to us as well.'

Christina Hughes was quoted as saying:

'The Government pretends they're going to change the environment with this tax. It's not going to do anything but throw out the future of young families.'

I want to tell you a story of Michael, a young man who started his own business in Townsville as a refrigeration mechanic just 12 months ago. The cost of the carbon tax on HC gases raises re-gassing costs from $80 to $250. He has been building a business for the last 12 months, but he knows those customers he has held will be shocked. They will have to check on prices. There will be people out there who will do stuff for nothing. He says that, due to the raised costs, he will invariably be faced with delays in payment and a rise in bad debts, and these affect his cash flow. He has just bought his first house and his wife is pregnant with their first baby. What does he do? What does he say? He said to me, 'I'll see if I can hold on till we can get rid of this lot.' All he is hoping for is that he can get rid of this government.

Mark Bogiatsis is a third-generation drycleaner in Townsville. G N Dry Cleaners have spent over $5 million in becoming more efficient with water, electricity and chemicals. He has specifically invested $900,000 on lowering his emissions and reducing his carbon footprint. But, hey—he gets $6½ thousand back! He knows that he is expecting a $24,000 rise in power alone this year. His accountants, PricewaterhouseCoopers, still cannot tell him what his exposure to the carbon tax is, and it is only five days away. He does not know. Apart from power he does not know the cost of chemicals, the cost of transport, the cost of uniforms, the cost of all this stuff that goes into his small business. PricewaterhouseCoopers, one of the biggest accountancy firms in the world, cannot tell him what his exposure to this carbon tax is.

He employs hard workers, often immigrants and first-generation Australians. He knows he will have to cover costs, but he also knows that others in the industry will undercut him to stay in business. There have already been cases. 'If you start a downward spiral, it will be hard to stop it,' he says. 'My father said they have survived fire, famine, flood and Labor governments; but, mate, this is such a bad tax and will not do anything for anyone.'

I want to tell you about a steel fabricator in Townsville. They have been told that their suppliers of steel and gas will raise costs by at least 10 per cent. They spend $80,000 on electricity and are expecting a rise of at least 20 per cent, or $16,000. They have an annual turnover in excess of $20 million. They are expecting an overall hit to their bottom line of $2 million at 10 per cent—and that, my friends, is ridiculous.

There is a painter down the road with 160 tonnes of Vietnamese steel in his yard meant to build Queensland cyclone shelters. He missed a job on price. He said to me: 'If we miss it on price now, how much more competitive are we going to be when the carbon tax comes in? How much more competitive can we possibly be?' I said to him: 'Don't come to me with problems; come to me with solutions. If you could do anything to your business, what would you do to it?' He said, 'You want to know for real?' I said yes. He said: 'I'd change my name to Holden. That way—if I changed my name to Holden, Ford, Toyota, OneSteel, BlueScope or Alcoa—I would get compensation, but I am a small business in Townsville and I get nothing.'

The AWU and the marginal seats of Labor get all the compensation. You have Wayne Hanson of the AWU, not Tony Abbott, the Leader of the Opposition, who said that Whyalla would be wiped off the map. And hey presto—hundreds of millions of dollars for the steel industry went straight in there. Fantastic! Paul Howes said 'Not one job will be lost because of the carbon tax.' Hey presto—$300 million went straight to the Illawarra. It was money for Alcoa in a Labor marginal seat. How much for small business in Townsville? Absolutely nothing.

To have a government sit there and tell us we are tilting at windmills and everything is just ridiculous. This government know what they are doing here. This is not about saving the planet; this is about saving their own political hide—and they should be condemned for it.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Sorry, Mr Deputy Speaker Georganas, I am just a bit speechless after listening to the member for Herbert on the Armageddon that will prevail as a result of the carbon price. What nonsense! If they were not competitive now, then they are never going to be competitive. What nonsense! We have seen those opposite run scare campaigns in recent weeks on regional Australia. We have seen those opposite run scare campaigns, as we heard today from the member for Herbert, on Fairfax. They have avoided scare campaigns on pannacotta, but I think that is probably next week's job. We have seen today those opposite run scare campaigns on homeless cats and dogs. So, it was only a matter of time before we saw them running a scare campaign on small business.

This government is committed to helping small business be part of a move to a clean energy future and part of a clean energy future for Australia. I want to set some facts straights because the amount of nonsense that has been floating around this afternoon in this chamber is breathtaking and it makes me speechless. The carbon price mechanism is not a tax on households and small businesses. Fact—small businesses do not pay a carbon price. Fact—small businesses do not have to fill in a single form as part of the carbon price reform. The member for Herbert, I think you were in small business before you came into this chamber, as were a number of your colleagues.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

The member for Canberra will keep her remarks through the chair.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker. Those opposite will recall the amount of form-filling any small business had to do in 2000 when the GST came in which made us realise that, basically, the GST was extraordinary. Every month we had to fill out a form about how much we had made and then pay tax to the ATO. There are no forms for small business attached to this carbon price.

Fact—the carbon price is paid by fewer than 500 of our largest emitters for each tonne of pollution they produce. Some of these emitters, as we have always acknowledged, will pass on their costs. The Treasury modelling shows that the average price impact across the economy is only 0.7 per cent. It is true that small businesses will largely experience this price impact through higher energy costs. There are three important issues in relation to this. The cost increases for small businesses are modest, these costs can be passed through to consumers, and the government will provide support to small businesses—and I will outline those later in my speech.

Data provided to the government by the Council of Small Business Australia—and I saw Peter Strong this morning at a business breakfast-lunch—shows that the electricity cost of a typical small retail business makes up less than two per cent of total costs. On the basis of the Treasury modelling the cost increase of the carbon price will therefore be only 0.2 per cent of overall expenditure of the typical small business, not the Armageddon predicted by the member for Herbert. In addition, New South Wales electricity distributors have provided data to the Independent Pricing and Regulatory Tribunal that the typical small business uses around 10 megawatts of electricity each year. When we apply the Treasury modelling electricity price impact to the IPART usage data, we find that carbon price would increase the typical small business power bill by around $5 per week. That is hardly the Armageddon that the member for Herbert is predicting. That works out to be about $20 a month and about $240 a year.

This modest cost increase can be passed through to consumers. That is why the government are providing assistance to households in the form of tax cuts, and increases to the pension, to family tax benefits and other payments. It is because costs are passed through the consumers. Nine out of 10 households, as we have said many, many times, will receive some assistance. We are also protecting consumers and small businesses by investing in an ACCC hotline so that if they are being overcharged they can get in touch with the ACCC hotline and report it.

The government are strongly committed to assistance and support to small business. We have introduced an increase in the small business instant asset write-off to $6,500. This provides an immediate income tax deduction for small businesses for the cost of depreciating assets. There is no limit to the number of items that can be written off in a financial year. To compare what will happen under this instant asset write-off process, if you buy a new $3,000 computer for business use after 1 July 2012, you will be able to write off its entire cost at tax time. Under the old arrangements you would only be able to write off $450 in the first year. Together these new tax breaks for small businesses are worth more than $3.7 billion over the next four years. That is significant savings for small business and significant cash in small business bank accounts as a result of this asset write-off. In addition, we have introduced a range of other small measures. This asset write-off is a particularly valuable policy initiative because it can help in many ways, as I said with the computer purchase, but also it gives an impetus for small businesses to invest in energy efficiency that can reduce electricity bills.

The whole community would be better served by the Leader of the Opposition and those opposite, including the member for Herbert, by telling the truth for a change. Come Sunday morning, rest assured, I will be able to go down to my local newsagent and buy my obligatory rocky road and the newsagent will still be open. I will be able to go to my local IGA, my local milk bar, and buy my milk and the shop will still be open. There will not be an Armageddon, a locked up and barren streetscape. The shops will be open, they will be vibrant and they will be operating. The world will not come to an end.

I just want to talk about some of the experiences that I have when I wander around and talk to small businesses in the community. I do not get the Armageddon that is painted by the member for Herbert—quite the contrary, actually. Recently I did a business walkaround. I do them regularly, once a week when we are not sitting. I went into the butcher in Garran. His business is going very, very well and the issues he raised with me were local government issues. He was very grateful for a development that was taking place down the road. I know that some residents in the area have problems with that development, but he was grateful because it was bringing more people into his business. I also went to the baker in the Garran shops. They have their own set of challenges in terms of competing with supermarkets, but they are challenges that they were facing. Unfortunately, there were not any candlestick makers at the Garran shops, but I will keep my eyes open and next time I will go and try to hunt down a candlestick maker in Canberra and have a chat with them.

In Canberra we have nearly 15,000 small businesses in my electorate alone. Recently I also went to the Torrens shops. At the Torrens shops the issues that were raised with me were lighting and the facilities around the shops. Every business there suggested that business was steady—again, not the Armageddon painted by the member for Herbert.

This morning, as I mentioned before, I saw Peter Strong from COSBOA and I chatted with a number of small business leaders here in Canberra. The issues that they raised with me were government procurement and the difficulty of small businesses actually getting access to government procurement. There was not one conversation, not one mention of the carbon price.

There is a lot more that Labor is doing in supporting small business. We can mention the instant asset write-off of $6½ thousand. We have also extended the Small Business Advisory Services, established a Small Business Commissioner, and established the Superannuation Clearing House. We have standardised business registrations, saving businesses $1,000. Labor has introduced a number of measures to help, support and provide assistance to small business. Come 1 July, there will not be the Armageddon that the member for Herbert predicts. I can assure the member for Herbert of that.

What small businesses in Canberra do have to worry about is a repeat of the experiences of 1996. Remember 1996 here in Canberra when 15,000 Public Service jobs were lost? Those opposite are predicting between 12,000 and 20,000 Public Service job losses, although the number keeps going up. If you want to see an adverse impact on small business in Canberra, that is what you get. (Time expired)

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

I thank you for the opportunity to speak on this issue which is certainly a matter of public importance. This is a discussion on both the impact of the carbon tax on small business and also on the approach that this government takes towards economic policy. In August 1986 President Ronald Reagan was quoted as saying to a White House Conference on Small Business:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

This has great currency with our own government today, who will in six days time have imposed the world's largest and most far-reaching carbon tax.

Small business is struggling. Last year the Australian Bureau of Statistics released some data on the health of the small business sector across the country. The research found that 31,528 small business operators across the nation shut their doors between the 2007 and 2010 elections. The average number of closures per electorate was 210. Coming in at more than double this was my electorate of Bennelong, with 453. This equates to 3.2 businesses closing their doors each and every week, or nearly one every two days, costing our local community up to 1,800 jobs under three years of Rudd and Gillard. Forty-five per cent of these businesses were in the retail sector, 22 per cent in wholesale, and 15 per cent in manufacturing. To top it off, this survey period concluded just about the time that our Prime Minister looked down the camera lens and made her solid affirmation to the Australian people: 'There will be no carbon tax under a government I lead.'

Yet with the gap in our two-speed economy becoming ever greater, there is still some slight movement from those small businesses left gasping for air. I can just hear the shouts from the ministerial corridors, 'The body still moves. Better slap another tax on it!' The Australian Chamber of Commerce and Industry Index of Expected Economic Performance recently reported eight consecutive quarters of decline until finally detecting a slight increase last month. ACCI Director, Greg Evans, commented:

The Survey clearly shows that trading conditions remain challenging for Australian businesses in non-mining related sectors, with small businesses reporting the worst performance.

Small business can expect further headwinds in coming months following the escalating economic and political turmoil in Europe, the possibility of a slowdown in China and the damaging economic impact of the carbon tax.

All we are left to ask is: could there be any worse time for the introduction of a carbon tax?

Small business will be hit the worst because they must pay for the tax at every single step in their production cycle. The fish-and-chip shop owner will pay the carbon tax from the minute the trawler fills up its diesel tanks to go out to sea, through the machinery that processes and cleans the fish, the refrigeration costs that are set to skyrocket, right through to the delivery to the shop and the lights that need to flash outside the front door to attract passers-by. The butcher, the baker and the local fruit and veg store will all be whacked with higher charges that compound throughout the cycle from paddock to plate. The retailers that struggle so much against cheap online sales that are not subject to the GST or the carbon tax, will now have to struggle even further.

Small businesses operate on very slim margins in a highly competitive environment and do not have the same ability to pass higher charges on to their customers. Local businesses in my Bennelong electorate have told me of discussions with their accountants to calculate the extra costs they will be forced to pay. Lyn Bridle, Director of the Epping Floral Centre, said to me:

We are very worried about the costs of the carbon tax—both on our fridges that use a lot of power to keep flowers fresh and also on the extra charges that growers will pass onto us. We fear that the customer will not accept a price hike and therefore we will be forced to absorb these extra costs. This will make it even harder to maintain a profitable local business in the current economic climate.

Discretionary retail sales have already slowed. The introduction of a carbon tax will increase our costs which will further hamper our ability to create employment opportunities.

The Labor Party tries to portray itself as the party that protects jobs. It astounds me that they have not yet learnt that creating business conditions that act like a python squeeze on small business will deny them the opportunity to create jobs in the first place. Last time I checked it is pretty hard to protect something that does not exist.

There is no compensation to small business to try to defray these new cost burdens. Of course, this government did promise them a one per cent tax cut but now even that has been taken away. The government has been very keen to promote that compensation is being paid to households. The Oxford Dictionary defines compensation as:

something, typically money, awarded to someone in recognition of loss, suffering, or injury …

So the government's own policies and their own marketing recognise that they are causing loss, suffering or injury to the people they are elected to represent and protect. Of course, this is done under the guise of an environmental initiative, yet the government's own modelling shows that Australian carbon emissions will continue to go the same way as the carbon tax—up and up and up. Yet if insult and injury is not enough, the government policy still expects to see the occasional breath in the small business body. As President Reagan predicted, they yell out with fervour, 'Quick, regulate it!'

New figures have confirmed that Bennelong businesses and community organisations are dealing more with red tape than ever before. Since the start of 2008, this Labor government has added over 18,000 new regulations. That equates to 11 new regulations every day for 4½ years. We all remember the government's 2007 election promise of 'one in, one out', meaning that any new regulation would be offset by the repeal of another. Instead only 86 regulations have been repealed. That is one for every 210 new regulations introduced. Red tape chokes the life out of local businesses and community groups. The Productivity Commission has estimated that the rewards for Australia to cut red tape would be worth up to $12 billion a year. We can only hope that these kinds of savings can one day be brought about by a future government lest this government needs to start subsidising it.

We, on this side of the House, stand united in our support of small businesses and in support of creating the strongest possible operating environment for businesses to be profitable, to grow, to employ new staff, to create wealth in the community and, finally, to allow people to be able to afford to do something to help our environment. These results will come from positive proactive policies. In my own electorate I have launched the Bennelong Village Businesses campaign. This campaign is designed to support local businesses and to promote the great benefits of advice, service and quality dispensed by local business owners passionate and knowledgeable about their wares. The campaign aims to develop collaboration to establish our villages as a vital and valuable component of our local communities and to increase foot traffic to the villages. We champion small business in the face of this government that taxes where there is life, regulates if life may still exist and then subsidises when business dies.

The unfairness to small businesses is that there is no compensation for the damage done through this tax and overregulation while life exists. When they close their doors for the last time, there will be nothing left to subsidise. Compensation is paid in a legal context when a damages claim is determined through an action that is judged to have intentionally caused damage, the quantum of which can be reliably demonstrated. The term in the budget papers this year to describe the damages claim that will come from the live cattle export industry was referred to as an 'unquantifiable liability'. This government is an unquantifiable liability for small business through this most comprehensive tax that will impact every one of us. This government is an unquantifiable liability for all Australians.

Joel Fitzgibbon (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

What a strange political environment we find ourselves in. We all, for example, agree that we need to do something about paid parental leave in this country. We all agree that we need to do something about managing the resources boom so we slow down the fast lane and speed up the slow lane. We all agree that we need to do something about the tragedy that we see unfolding before us with respect to boat people. We all agree that we need to do something about climate change. I really want to underscore that last point because everyone knows that Tony Abbott is committed to the same greenhouse gas reductions as we are on this side.

The strange thing is that we cannot agree on how we do all of these things. Of course, I could have cited many more examples. We cannot agree on paid parental leave. We cannot agree on the resources boom. We cannot agree, sadly, on refugees and we certainly cannot agree on climate change. But it is even worse than that because, in my view, the Leader of the Opposition does not want to agree. He identifies a problem, he says he is on board to fix it but, by virtue of his opportunism, he does not want to fix it. He does not want it to go away. Every time there is a boat and every time there is an opportunity to blame an industry turndown, for example, on carbon, he takes that opportunity. He sees opportunism in the plight of others and that is a real tragedy.

Take the aluminium industry, an industry in Australia being dramatically adversely affected by two things in particular: the high value of the Australian dollar and a plummeting of aluminium prices on world markets. I think the price has plummeted by 60 per cent since 2008. You do not have to be a genius to work out, when you add the appreciation of the dollar, that it is a pretty hefty blow on the aluminium industry. To make it worse, when the aluminium industry is affected by these things he seeks to capitalise on the demise of the industry and, of course, the job losses. And there was no greater example than with Norsk Hydro's plant at Kurri Kurri in my electorate. The bad news for the Leader of the Opposition is that my electorate understand that Norsk Hydro has been struggling for a long, long time and losing money for a long, long time—and we have not had a carbon price, if the opposition have not noticed. Hydro would be closing whether we were having a carbon price or we were not having a carbon price. This is the crime of the Leader of the Opposition: he wants to mislead and then capitalise. He is doing it again this week with Alcoa.

Alcoa have indicated to the government that with some assistance they might survive the onslaught of the Australian dollar and low aluminium prices. What is making the Alcoa deal critical is the willingness of the Victorian government to talk turkey on electricity contract prices. We can help Alcoa, having been asked, if the Victorian government joins with us on power prices. Hydro is a completely different situation. Both the Minister for Industry and Innovation, who is also Minister for Climate Change and Energy Efficiency, and I have been to Hydro management on a number of occasions and, very early in the piece, we said, 'What can we do as a government to help?' In my case I said, 'Do you want me to take your plight to ministers to see what assistance might be available—co-investment, for example?' I was very quickly and plainly told: 'Thank you very much'—they are very courteous people, the Norwegians—'you could throw hundreds of millions of dollars at us tomorrow, it's not going to change our business model. It's not going to suddenly reduce the value of the Australian dollar. It's not going to suddenly increase global aluminium prices.'

They said, and these are my words, not theirs: 'You're not going to make our plant bigger and therefore give it bigger scale'—as we know, around the world there are huge plants opening and economies of scale are important—'and you're not going to overnight modernise our plant. We've been here a long time, it's relatively old technology, even though the company has invested significantly in recent years to try to remain competitive.' I repeat, those last sentences were my words, not theirs, but they made it very clear both to the industry minister and to me that there was nothing we could do to help. Yet the opposition leader comes in here this week and rails against the government for having the audacity to help Alcoa but not help Norsk Hydro. I am sure, because they are a courteous lot, that Hydro will not be coming out and criticising the opposition leader—but, gee, I bet they feel like it.

People like the member for Paterson have been running around the Hunter saying it is all about politics and the marginality of seats. My political margin in Hunter is 12½ per cent or thereabouts. The Alcoa plant is located in the electorate of Corio, the electorate of the Parliamentary Secretary for Foreign Affairs, Richard Marles. The last time I checked, his margin was 13 per cent. How dare the opposition leader and his follower suggest that this is a political decision, that we would determine the fate of hundreds of people and an industry in our country based on the marginality of seats. It would be offensive if I was on 12 and Richard Marles was on two, but it is even more offensive when it is not even factually correct in terms of our political margins. How dare they! The opposition leader, who has been making a fool of himself running around the country with his scare campaign, would be much better served by, for example, getting behind our jobs market on 18 July in the Hunter, where we will match employers with prospective employees, most of whom will be coming from the now mothballed Hydro plant. They are the sorts of positive things the opposition leader could be doing, rather than carping on and on about the carbon price and, in doing so, talking the economy down, not up.

We have an unemployment rate in the Hunter of about 3.9 per cent. HunterNet, the networking organisation that represents manufacturers, has informed us that right now there are about 1,000 manufacturing jobs in the Hunter waiting to be filled. We have a more diverse economy than ever before, a very low unemployment rate and huge investment prospects, with money flowing into the mining industry in particular, so we are well placed to absorb those jobs. It is very disappointing that Norsk Hydro found it necessary to take this decision; indeed, it is disappointing that in their view there was nothing the government could do to assist, but we certainly offered. As a community we will get on with it. I will be talking up my local economy and the prospects for those who have lost their jobs, not talking it down, like the member for Paterson is inclined to do, following the lead of his parliamentary leader, of course. I will be out there helping people make a transition into another job, not doing what the member for Paterson in particular is trying to do: to scare them into believing that their working life is over, as an opportunity to blame the current Labor government.

I should say something about the specifics of this matter of public importance. I have said in this place many times before that there are three important things a government should do as a priority for small business. The first is to grow the economy, which we are doing, unlike the rest of the modern world. The second is to keep the price of money or interest rates low, and we are doing that better than anyone else in the world. The third thing is to get out of the way. Red tape is the biggest fear for small business and this government is working hard to keep small business red tape to a minimum.

I have been here 16 years and I remember doing something—not unlike those on the other side are doing—with respect to the GST, saying it was going to 'kill' this person and 'kill' that person. I have matured and learnt from my mistakes. We all know now that a consumption tax in this country was necessary, but that does not mean that at the time I did not have some real fears about how the GST would impact on small business. And guess what? Small business still tell me on a daily basis that the GST is killing them because they remain unpaid tax collectors. They will remain unpaid tax collectors, and they are making a fantastic contribution to the Australian economy in doing so. But let us not kid ourselves that, as necessary as a consumption tax was in this country, there is not some pain for small business.

With respect to the carbon price, we are putting in place offsets, of course—in particular, tax breaks for the small business community. Hypocrisy is alive and well on the other side of the House. (Time expired)

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

Order! This discussion has now concluded.