Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to strongly support this motion by the member for Mallee, particularly in relation to acknowledging small business as such a major contributor to the national economy and one that should be noted for its innovation—as we see constantly in our electorates—and for the entrepreneurship of small business people. Really, we must commend the small business minister, the Treasurer and the Prime Minister for the decision on the accelerated depreciation for assets purchased under $20,000. As we know, of the two million actively trading businesses in Australia, almost 96 per cent are small businesses. That is part of the reason they are so important to a coalition government and why the federal government has such a strong focus on the needs of small business. As we know, these are the people who invest their own money, take extraordinary risk and have a go. They are exactly the sort of people investing, and investing often, in the opportunities for young people to have their first job. They support many of our communities right around Australia. We saw, unfortunately, that with the previous government there were five or six small business ministers. They certainly did not take this seriously, but we do.

A division having been called in the House of Representatives—

Sitting suspended from 12:05 to 12:28

I was talking before about the number of small businesses not only around Australia but in my electorate. There are 12,716 small businesses in my electorate, and of those 3,551 are in business services, 2,766 in construction and another 1,990 in agriculture. There are also a range of others in distribution services, personal services, social services, manufacturing, mining and utilities. Many of those businesses have been in touch with me to talk about the measures in this budget that have really proven to be very useful for their business. Not only that; it shows a lot of respect for the small businesses themselves, with the fact that the 2015 budget delivered $3.25 billion in tax cuts for small businesses and $1.75 billion in accelerated depreciation measures and cut the company tax rate for up to 780,000 incorporated businesses with an annual turnover of up to $2 million to 28.5 per cent—that is the lowest since 1967. From July, as we know, the government is providing the five per cent discount for 1½ million sole traders, trusts and partnership structures that are unincorporated with an annual turnover of up to $2 million, capped at $1,000, through to their end-of-year tax return.

Of course, this $20,000 immediate deduction is particularly important to each small business. They each have their own specific needs within their business. This gives them the flexibility and also it provokes them into taking the next step in their business. As I said when I first started, these small business people are the ones who invest their own money and who have a great passion for what they do. As I have said in previous speeches, not only do they often provide young people, particularly in rural and regional areas, with their first job; they often provide people with their last job. They are an integral part of those small businesses.

They are also an integral part of a small community. Frequently, small businesses are all we have out in our electorates—very small businesses. They support the whole community—community service organisations and sporting clubs. They provide all sorts of gear and equipment for any local community service. They are the heart and soul, frequently, of our small rural and regional communities—often undervalued and under-respected in that space. You will see that they are the ones who have their doors open whenever you need them. In a small community, that can be quite difficult, because their profits may not always be what they could make in a much larger community. But they stay with their small regional community; they are committed to it. Such is the commitment of small businesses not only to what they do but also to the communities that they serve so well.

As someone who, with my husband, started a business—we literally bought the first property on the day we got married—I understand the issues of debt and interest rates. During our time we saw interest rates move from 17 to 23 per cent. That is the risk that small businesses take. They have a go, no matter what the circumstances. They actually invest; they employ people. This is a very good measure. The decisions that this government make and continue to make support such a critical part of our economy, which is small business.

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

I rise to respond to the motion moved by the member for Mallee in support of small business. Obviously, any member of parliament would support endeavours that make sure small business flourishes. Despite the rhetoric from those opposite, I am proud to go through the strong connections the Labor Party has with small business. I have nearly 19,000 small businesses in my electorate, many of them doing great things. In fact, last week I went out and toured EGR—not really a small business, I suppose, with 600 or 700 employees throughout the world. They develop automotive products, building products and retail display products. If you look on my Facebook page, you will see a photo of me standing there with Rod Horwill and Shane Butler. We are looking at a fender for a Volkswagen car, made on Evans Road in Salisbury in Queensland and then sent over to Germany. It goes on German cars that are then distributed throughout the world. I am looking at that fender, because inside it it says 'Made in Australia' in proud writing. It was great to meet with Rod and understand that we should do all that we can to make sure that Australia continues to manufacture and to compete with the world.

That is why I am here with the member for Lilley. I was proud to be a part of the government that did so much for small business: the instant asset write-offs, the loss carry-back, the accelerated depreciation for cars—all those great business initiatives that were rolled out under the Labor government. However, I am sad to see that the Liberal Party, when they came to power, automatically got rid of those initiatives. Small business thrives on certainty. What did they do? It was not mentioned before the election, but after the election there was a complete turnaround, a volte-face, and they cut certainty for small business. And we saw how that flowed out. We have seen consumer confidence and business confidence dry up after that horrific budget visited on the people of Australia. Why did they do that? We have had no apology.

After 20 months of this horrific policy being visited on small business, we have seen their response today; they have taken Labor Party policies back to the Senate. For 20 months, we have had small business suffering. We had a budget last year that effectively put the foot on the throat of small business. And then they walk around saying, 'We have restored what Labor had in place'—without an apology. This was only a political act. Why would the Liberal Party, supposedly the friends of small business—we have had speaker after speaker talking about the small business measures bill and how friendly the Liberal Party is with small business—bring in a piece of legislation that wreaked havoc on small businesses in my electorate and throughout Australia. Why would they make such a political, opportunistic decision unless they are only concerned with power. I know that is a horrible accusation, but when I see this sort of political chicanery I think the Liberal Party is a soulless husk of a party encasing only the idea of power motivating their decisions. I would like to have one member of the government apologise for what they did to small business back in last year's budget.

Mr Craig Kelly interjecting—

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

Order! Member for Hughes, you can have your turn.

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

Why would they do that when small businesses are trying to do the right thing? We have not had any single member of the Liberal Party apologise for that policy. Nevertheless, we will see. Obviously, when you had a budget that was committed to austerity, rather than something that they articulated before the election in 2013, small business suffered. Obviously, the numbers of successful small businesses are a problem. You might argue that many people in small business—such as the bricklayer working for the brickie—are not actually a small business. My brother has done something like that. He is not really a small business. He is certainly not a small business like EGR which I visited last week. Nevertheless, we should do all we can to make sure small business gets a chance and support the government's policies that were rolled out in the most recent budget.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I would like to acknowledge and thank the member for Mallee, who brought this motion to the House. This is a most important opportunity for members of this House to speak on the importance of small business nationally and the importance of how small business affects each member and their electorate. In my electorate of Wright, I have over 10,000 small businesses currently operating. The estimated turnover of all the small businesses in Wright is roughly $1 billion a year, making them the largest contributing sector to the gross regional product of my electorate. I am very proud of the strength of the small business sector in Wright, and I would like to take this opportunity to highlight some of the recent achievements of some of those small businesses. Before I do that, I welcome the member for Moreton's support for the recent budget measures of the government. I know that those measures have been received extremely well throughout the small business sector right across the entire nation.

I have stood in this House and spoken of small businesses on many occasions. This morning I have the opportunity to speak about ScenicRim 4Real Milk, a business which is innovative in the most advanced of ways. It is a dairy herd, a local family owned operation, with full robotic dairies and a value adding process of bottling and distributing milk. The farmer, Greg Dennis, was recently awarded Dairy Farmer of the Year at the Kondinin Group-ABC Rural Australian Farmer of the Year awards and is doing an outstanding job locally. In the west of my electorate is Stark Engineering, which makes the Warwick Cattle Crush. Stark Engineering is an agricultural manufacturer in the Locker Valley which has already experienced the benefit of the government's small business package. Last month they employed an extra couple of staff in order to meet their demand on the back of putting an additional three staff on the month before. As a result of the budget's small business package and agricultural package, they are advertising for even more positions as we speak.

There is a small cafe over in the Mudgeeraba area. I recently hosted one of my regular mobile offices at the Two Little Bakers cafe in Mudgeeraba. This relatively new cafe is a labour of love from a mother and daughter duo, Kris and Ashley, who have always dreamed of running their own cafe and decorating operation. Since opening over a year ago, it has become a Gold Coast hot spot, receiving rave reviews in dozens of local food publications. I had the opportunity to go over to Mudgeeraba last week and I popped in to say 'hello' to Kris. I was delighted to have them tell me that they are going from strength to strength, posting back-to-back monthly profits. Isn't that a great news story for any small business?

Behind our small business sector is a very motivated chamber of commerce sector. I would like to quickly acknowledge the Mudgeeraba Chamber of Commerce and President John Forrester; Logan Country Chamber of Commerce and President Kelly Cousins; the Lockyer Chamber of Commerce and President Paul Emmerson; Tambourine Mountain Chamber of Commerce and President Tony Lambert; Kooralbyn Chamber of Commerce and Vice-President Barry Cook; Springbrook Chamber of Commerce and President Gail Geronimos; Beaudesert Chamber of Commerce and President Cheryl Worsick; and of course the Boona District Chamber of Commerce and President Matt Wright. To each of them, I acknowledge their contribution to small business in my area.

Finally, when I first became a member of the House, the member for Canberra, Gai Brodtmann, and I partnered to start the Parliamentary Friends of Small Business group. Prior to coming here, there was no Parliamentary Friends of Small Business group. However, with the help of Gai and others, we started this group and it is shining a light on some incredible small businesses around Australia, as well as offering support to new businesses.

In relation to the small business package that we have rolled out, 96 per cent of all Australian businesses are small businesses. They produce over $330 billion of our nation's economic input per year and employ over four and a half million people, which accounts for almost 43 per cent of non-financial private sector jobs in our country. There is no doubt that small business is at the forefront of Australian jobs and growth. It is the engine room of Australia. The new $5.5 billion jobs and small business package is the biggest small business package in our nation's history. I welcome the support from those on the other side of the House for this legislation and trust that it will have clear sailing through the Senate so that our small businesses can be the recipients of some great legislation.

Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

I certainly welcome the small business package in the budget. It is badly needed. Confidence is low; growth is weak and anaemic. Private sector investment is well below what it ought to be so we are not making that transition from mining sources of growth to non-mining sources of growth. The consequence of that is that many small businesses are up against the wall. They are doing it tough. When it comes to small business, confidence is king, and confidence relies upon an assessment that there will be a continuous and sustainable level of demand in local communities and across our national economy which will enable them not only to continue to employ staff and to buy capital equipment but also to expand. Sadly, at the moment, none of those things are the case. The economy is far weaker than it ought to be, so I welcome the initiatives in this budget. They have been made necessary by actions of the government, which have damaged confidence and damaged future investment so much so that private sector capital investment is down dramatically and demand is down as a consequence. Confidence is down because the government has been damaging the economy by exaggerating a budget and economic emergency. The consequence of that has brought an about-face by this government in this budget because, whilst it will not admit it, it is really saying: 'We damaged the economy over the previous 12 months. We have to do something about it. There is a need for fiscal stimulus and the way in which we are going about it is to return to a Labor policy of an instant asset write-off'—a very good policy by the way, which was a recommendation of the Henry inquiry. So I am delighted to say that the government is reaching for a Labor initiative to try and stimulate demand in our economy.

But the real question is: why are we here this week having a conversation in the House about this measure, when it should have been in the Senate this week? We had the farcical situation in the last sitting week of the government voting against their own measures for small business, which they claim are the biggest package for small business in the history of the parliament. They voted against them in the last sitting week. It should have been in the Senate this week if we were really concerned about confidence. Confidence, as I said before, is king. We need this measure up and through the Senate. Instead of patting themselves on the back with rubbish like, 'This is the biggest set of measures ever for small business,' why aren't they getting on and just doing it, and why aren't they, for example, apologising for abolishing the instant asset write-off in the first place? Confidence has been down dramatically. Consumer confidence was down 13 per cent prior to the budget. Business confidence was down a staggering 22 per cent. That is why this measure needs to be put in place.

Certainly it is welcomed by the 12,000 small businesses in the electorate of Lilley, but it is only a shadow of the package that the former government had in place for small business. Loss carry-back, for example, put in place and abolished by this government, was one of the most significant business tax reforms of our generation. It was wiped away precisely at a time when disruption occurs in business models. It was absolutely needed. Loss carry-back should be brought back by this government if it is serious about economic reform. And, of course, there was accelerated depreciation for the purchase of motor vehicles, and so on. That package that was abolished was worth $5 billion over the forward estimates, when the deficit was far lower than it is now. According to the government, it was not affordable back then with a far lower deficit. There is a far higher deficit now, and the government comes forward with a small business package which is supposedly affordable.

So we did have a plan for small business and jobs. That is why unemployment had a 5 in front of it when Labour was in power, and now it has a 6 in front of it. This is a really big problem for small businesses—a very, very big problem. And the sad part of this package is that the instant asset write-off and the other changes are not enough to make up for the lack of demand in our economy at the moment. What this budget desperately required was a fundamental injection of funds into building economic capacity and infrastructure across the board, and most particularly into urban public transport. Those initiatives are what is required given how weak demand is at the moment, but for ideological reasons the government will not go there, so they have gone to an instant asset write-off. But it will be nowhere near as effective as it ought to be, because it is not a boost to underlying demand in the economy through investment in infrastructure—which the government claim they are making, but they are not. In making those claims they are damaging confidence.

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

It is nice to stand and support the member for Mallee in this motion about the importance and significance of small businesses in our economy. At the age of 21 I started work in my family business, and I ran the Crossways Hotel in Enfield from that age until I decided to enter parliament. I was blessed to be able to give thousands and thousands of people a job. There is nothing better than looking into the eye of someone at a job interview and telling them that yes, there is a spot for them, whether it is a university student that is looking to pay board at home or have pocket money of a weekend to go out with friends or to supplement while they perform their studies to ultimately start their career—as is so often the case in the hospitality business and as was the case when I was growing up—or whether it is a single mum who is looking at ways to earn a wage from 10 am to 3 pm, when the children are at school, before going back and picking them up, or whether is it people at the other end of life. I was blessed to employ a lot of very experienced people from the hospitality industry that were finding it tough to find a job at that particular time in their life.

We are all ultimately local federal members of parliament. We may rise to be something in the ministerial rank or parliamentary secretary rank, but we are ultimately local federal members of parliament. It is our job to ensure that our local communities have the work they need for the stage of life that they are at, and the role that small business plays in that is vital.

The measures were actually passed—for the information of the member for Lilley—this morning, so there was no delay on the timing of it. The measures that were passed were so important. I want to give you one local example, as we have just had a week back in our electorates. There is a gentleman in my electorate named Pino Salerno. Pino and a group of his friends have agreed to take out a lease on a closed down rowing centre, an old function room. They come from a hospitality background; they run restaurants around other parts of New South Wales, but this would be their first operation in my electorate. Before our budget, he had a planned to open up his facility in a staged manner, which would mean there would be an increase of local employment over time. When I ran into Pino last week he told me our decisions—that were supported by those opposite, that have passed the Senate this morning—have facilitated him, now safe in the knowledge that the asset write-off is there, to ramp up the opening process. So instead of employing in the vicinity of 12 to 15 people in 12 to 18 months' time, there will be 12 to 15 people employed within the next three to six months.

What does that mean as a local federal member? It means there are 12 to 15 more people in my electorate who are not only earning a wage, earning a living and enjoying a better standard of life but, more importantly—and I know Pino's operations from elsewhere in Sydney—also forging a career with Pino and his business. I know that many of the people who run the establishments that my family owns, who run them day-in day-out, started as casual bar attendants—that is how they started a career. Small and family businesses are so often overlooked, but they give you a career path. Why these packages are so important is not only for that local aspect but also in the sector itself.

I say this a lot: if a PAYE wage earner loses their job it is a tragedy, and they do all that they can to get another job; if a small or family business owner loses their job, they most likely lose their home. The reality is they mortgage against their home to open and invest in their business. Like the tradie who is today's apprentice, who makes a pathway to buy his own van, tools and whatever he needs to have a go himself, these are the traditional pathways of small business—and over time some of those small businesses have become medium to big businesses.

This sector employs around 4½ million people—that is almost as much as medium- and large-sized businesses added together. There is no doubt that it is vital to our community. I am not interested in standing up here and bagging anyone; I am standing up here to praise the efforts of all of those involved. I hope that our package inspires more people to take the step from PAYE to business operator, because our country ultimately needs it.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I am so pleased that the Abbott government has finally learnt something about small business, because it was pretty clear last year that the Abbott government had no idea about small business. In fact, under Labor we had the instant asset write-off, we had loss carry-back provisions and we had accelerated depreciation of motor vehicles, but the Abbott government did not understand these measures, and took an axe to them as one of their first orders of business when they took government at the end of 2013.

And what did they announce for small business, to great fanfare? A 1½ per cent cut to the company tax rate. If they had actually realised anything at all about small business, if they had any idea about how small business works, the Abbott government would have realised that most small businesses are not incorporated. A 1½ per cent cut to the company tax rate does not help an unincorporated business. Unfortunately, the government had no idea about this and so, in wandering around the countryside claiming that this measure was somehow going to be great for small business, they looked like complete buffoons.

Thankfully, the Council of Small Business Australia, led by Peter Strong, came to their aid. The council sat them down and explained to them how small business worked—sat them down, and said, 'Look, guys, you might have heard of this thing called sole traders, ABNs; I know it sounds really complicated.' So you have the small business peak body actually explaining it to this government. Thank goodness that now, at least—belatedly—they are starting to introduce some pro-small-business measures. They have come to the realisation that Labor's policy of having an instant asset write-off was good, sound policy aimed at assisting small businesses with their finances. Of course, cash is very important in small business. That is why we in government had such strong pro-small-business measures.

The other thing that is really important for a small business is, of course, a good economy in which to operate. Sadly for the small businesses of Australia and for the working people of Australia, the Abbott government's first budget was an utter catastrophe for this nation's economy. They come in and they make cuts: cuts to higher education; $80 billion in cuts to the states for education and health; cuts to the Australian Securities and Investments Commission; cuts to the Australian Taxation Office; cuts to the CSIRO; cuts to pensions; the cuts to the ABC; the cuts to the SBS—all of the cuts. In fact, name one program in this country and it is pretty likely that it was cut by the Abbott government in its first budget or—I should say quite rightly—that the Abbott government attempted to make cuts, because Labor stood up strongly against this government's attempts to take an axe to public finances, and we have been really successful in things like stopping them from taking the axe to pensions in the way in which they intended. We have been really successful in doing that, because we have campaigned so strongly and the people of this nation have stood up and said, 'No, you cannot cut pensions.' The people of this nation have stood up and said, 'No, you cannot cut funds to higher education.' It is just ridiculous. At a time when our competitors in Tokyo and in Beijing are increasing public funding to higher education to bump their universities up the charts, what do the Abbott government want to do to higher education in this country, our biggest export industry? They want to take an axe to it. But I digress. Thankfully, the Council of Small Business Australia and other expert groups and small businesses themselves have explained to the Abbott government that in fact what you really need to do is have measures that support small business.

One of the really important things for small business, as I said, is finance. The previous speaker in this debate spoke about the fact that a lot of small business owners mortgage their house to get access to finance in order to start up. That is a massive difficulty on people who want to start small businesses, for a couple of reasons. Firstly, not everyone has an asset the size of a house to mortgage. Secondly, there are a lot of entrepreneurs in Australia who will tell you that small businesses and start-up businesses in Australia are more risk averse and more cautious than people in, say, Silicon Valley. Of course they are. Their house is at risk here in Australia. That is often the case for small businesses, and that is why on budget reply night Bill Shorten, the Leader of the Opposition, made a fantastic announcement of benefit to small business. He talked about providing access to finance for start-ups without people having to mortgage their homes. What is the consequence of that? It is not just the increased access to financing, and therefore the encouragement of new small businesses, but the fact that it is going to encourage people once they are in business to be able to take more risk and to be more innovative and entrepreneurial. That is why it is such a fantastic measure. We will always support small business, as we always have.

Debate adjourned