Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise to speak on this motion by the member for Forde, which outlines some of the things the coalition did in the last budget in our small business package. I would particularly like to raise comments on some of the government policies made by one M Latham, a former Labor leader and former member for Werriwa, in an article titled 'Big is best', which I think is perhaps the most misguided, foolish and ignorant article I have ever read. In it the former Labor leader calls small business:

… a pack of blank-faced losers serving up kebabs and pizza slices in greasy food halls and shopping malls.

He goes on to say:

… smallness is despised as inadequate …

He goes on to cite examples of why big is best: the Big Banana, the Big Pineapple and the Big Peanut, which is perhaps quite poetic for one M Latham. He also goes on:

Small businesses, in effect, are the garden gnomes of the modern economy—purely ornamental and totally dispensable.

Well, we saw how dispensable they were! Sadly, that was an attitude that was held by that side of the parliament when they were sitting in government, for when they were in government 519,000 jobs were lost in the small business sector.

Opposition Member:

An opposition member interjecting—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Under the policies of your side of the government, 519,000 jobs were lost in the small business sector. The small business sector share of private sector employment declined from 53 per cent to 43 per cent under your policies. For those that believe in the ideology that big is best, there are a few things that I would like to point them to. Firstly, there is a beast called pig No. 6707. This was conceived in a laboratory in the US Department of Agriculture in the 1990s because they believed that it would be best if they could make the pigs bigger and bigger. But what they produced was 'a beast that was excessively hairy, riddled with arthritis and cross-eyed; too lethargic to stand, let alone mate'.

The delusion that big is best is one of the reasons why the socialist economies of the old Eastern Bloc failed. They did not understand the importance of innovation. Those that believe that big is best should perhaps look at the problems with what is called island gigantism, where the size of animals on an isolated island, shielded from the natural competition, increases dramatically compared to the size of animals on the mainland. Examples are the elephant bird of Madagascar, the moa and the giant gecko of New Zealand, the giant rabbits of the Mediterranean and, of course, the famed dodo bird. Without effective competition, as soon as more competition was introduced these things were simply too big and they failed and became extinct.

I would put to you that our business sector here in Australia is in danger of falling to the evils of island gigantism. We have seen many sectors of our economy where people have the ideology that big is better. We have seen our industries grow and grow to where we simply have oligopolistic industries in almost every sector of the economy. This is not because bigger is more efficient; it is because of the way that government have set up the laws. We have seen that the rule of law—such an important factor in a productive economy—in this country is broken. A small business in a legal dispute with a larger business simply cannot win because it cannot finance the legal cost. We have seen the broken market for retail rents in this country where, because of government interference in the market and zoning laws to protect large retailers, there is the most distorted market where a large retailer will be paying two to three per cent of their turnover in rent while a smaller retailer will be paying 20 to 25 per cent. We have seen it in our failed competition laws. We have allowed anticompetitive price discrimination to take hold across the board.

I think this one M Latham, the former Labor leader, gives it away when he talks in his article about his concern regarding the decline of union membership, because Labor knows in those large companies it is much easier to line up the workers—line them up in lines—and sign them up to union membership. It was an appalling, terrible article by the former member for Werriwa. (Time expired)

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

I rise to speak in this debate after what can only be considered a very bizarre contribution. It was certainly different. I enjoyed the excursion into biology and I am glad to see someone on the government side supports Darwinian evolution. I do sometimes wonder about the science based credentials of the coalition government.

Leaving that aside, the main critique of the previous member was around the supposed change in composition of employment under the last government. Let's look at the absolute facts. The absolute facts are that under the last government nearly one million jobs were added to the economy during the period of the global financial crisis. Quite frankly, I do not care whether the jobs are created in micro businesses, small businesses, SMEs or big businesses. We just need to grow jobs in this country, and we have to put in place the policies that support job growth. So their argument is ridiculous, because it is about jobs growth. The last government added nearly one million jobs.

What we are facing now, by contrast, is a significant jobs crisis. We have 800,000 unemployed Australians. That is the highest number of unemployed Australians since 1994, which was after a significant recession. We have an unemployment rate of 6.3 per cent—the highest in more than 12 years. Even more worrying, we have 186,000 long-term unemployed Australians. That is the highest number ever, and the ratio of long-term unemployed to unemployed total is 25 per cent—the highest ratio ever recorded. We also have an underemployment rate of 8.5 per cent, which contrasts very badly with the peak of seven per cent in the 1990s recession. We have an under-utilisation rate of 14.7 per cent, which is also very worrying, and we have a youth unemployment rate of 13 per cent, with 20 per cent in the Hunter. Just imagine that for a minute: one in five young people in the Hunter Valley who are looking for work cannot find a job. We are risking a generation of lost young people. This is the issue we are facing. Last month we saw a decline in absolute hours worked of 432,000 hours. That is a very worrying trend when we are not in a recession. That is the job scenario we are facing when we are debating this issue of support for small business.

I support small business. My colleague, the member for Rankin, is passionate about supporting small business—absolutely passionate about it—but let us not forget the context of this debate. The context of this debate is a jobs crisis and a small business package that comes on top of a gutting of industry and innovation policy—an absolute gutting. We have seen $2 billion cut out of innovation and industry policy by this government. We have seen a $500 million precincts program cut that would have grown innovative small businesses working with applied researchers. Most egregiously, we have seen a cut to the $300 million venture capital fund. I cannot think of many better ways of supporting innovative small businesses than by helping them access venture capital in the Australian market, which is quite immature. We have seen a $2 billion cut in industry and innovation policy. We have also seen a $1 billion cut in training and skills formation funding by this government. They might have this small business package over there that everyone welcomes, but there is a sleight of hand—there is a pea and thimble trick—where over here they have cut $2 billion from industry and innovation policy and a billion dollars from training and skills.

What is the end result of this? We have seen the annihilation of the automotive industry—50,000 direct jobs gone and another 200,000 indirect jobs on the chopping block. We have seen the defence industry decimated. I look forward to the member for Hindmarsh's contribution—he has been missing in action—on the decline of the South Australian industry. It takes more than just nodding your head behind Prime Minister Abbott. It takes more than being a head nodder to deliver for your state, and he has failed to deliver for South Australia, just as this government has failed to deliver for all Australians. I welcome support for small business. I welcome anything that grows Australian businesses, but let us set it in the context of a jobs crisis, a long-term unemployment crisis, an under-utilisation crisis, a youth unemployment crisis, and the gutting of industry and innovation programs and training programs. Let us support small business, but let us not do that at the expense of supporting every other business in this country.

Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

As the member for Charlton introduced defence shipbuilding, I will gladly speak on that. He was asleep last week, like his previous government and colleagues were asleep during six years of government, because we know they did not commission a defence shipbuilding project. They did nothing for six years. What did we do last week? We announced a $39 billion project for Future Frigates. There were patrol boats. I am glad to let the member for Charlton know about this magnificent announcement—this commitment to the defence shipbuilding industry and 2,500 jobs to be sustained in a continuous shipbuilding project program. It is what the people of Australia in the defence shipbuilding industry have demanded, and we will deliver.

I thank the member for Forde for this motion and I commend him for his support and advocacy for small business. As we know, small business is the life blood of Australia. We know that 96 per cent of businesses in Australia are small businesses—it is 98 per cent in my state. This government is committed to ensuring that small business thrives. We know that when small business thrives there are more jobs. I look forward to the member for Rankin's contribution after mine. I am hoping that he utilises his background in economics to talk about how the tax cuts and the tax incentives from the last budget will help economic growth in Australia.

Dr Chalmers interjecting—

It would be good to see you endorse our policies, Member for Rankin, rather than make excuses. Right now, in South Australia we know that we have the highest unemployment rate and the federal government has done something about this in the federal budget, as well as with the defence shipbuilding announcement. But it is not only with that it is also with the NBN, with nation building projects and with more money for advanced manufacturing for those manufacturers that have a bright future. We have already seen green shoots in our economy. We know that since being elected that we have seen more than 330,000 jobs created. While it is taking longer for South Australia to turn around the economic challenges, we are optimistic about the future with the defence shipbuilding announcement and others. It was the shot in the arm that our economy needed; it was the shot in the arm that the defence industry needed Australia wide. We have heard Andrew Bellamy of Austal; we have heard BAE Systems—they are all very positive.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

And only we could deliver them.

Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

We will deliver them, Member for Kooyong, and we have had a great response from the defence industry about this significant commitment—a unique commitment for a defence shipbuilding program. Earlier today we heard of the benefits of the free trade agreements from the minister for trade and how they are helping the economy.

In terms of jobs of the future, let us look at where there are opportunities. We know that with the Medical Research Future Fund—in health care and aged care there will be close to a 20 per cent increase in that sector. Likewise, in education there will be significant job increases, and also in technical services, accommodation, food, retail and trade. There are many companies in my electorate that already excel in the areas of technical services—like Fugro and Thermo Fisher to name two. Both of these companies provide highly technical services to products around the world, with research and development being a key part of what they do. We know that our R&D expenditure can increase—it is a little over two per cent of GDP—and we are looking at new ways that industries can research and utilise government programs to develop their sectors. Zen Home Energy Systems and Tindo Solar are two such companies that over the last 10 years have set up in the renewable sector, in this growing energy market. And on the weekend it was announced that Heliostat have entered into an agreement with an Indian solar company, which could result in many new jobs for South Australia. Heliostat has also received a federal government grant, as we look to support research and development for major renewable energy export opportunities.

Even though there have been highly publicised job losses in South Australia, the small businesses that I have spoken to over the last five weeks and also since the budget have been extremely positive about the initiatives. They are getting on the front foot. They are investing and expanding. They are going to employ more people and have a go. Whether it be education services, retail or hospitality their commitment is impressive. I commend them and wish them all the best. They know that government is setting the foundations for a better economic future. I commend the motion to the House.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

It is always really pleasing to see the member for Hindmarsh have a great time in this House, because he will not be here for long. If the people of Hindmarsh want someone who actually cares about jobs and small business, we have got just the guy. What is his name? Steve Georganas. He is coming after you! It is good to see the member for Hindmarsh laughing, because he will not be here long. You are here for a good time, not for a long time, Member for Hindmarsh.

It is great, as always, to follow the great member for Charlton. One of your colleagues, the new Speaker, did me a great favour today—the great privilege of mixing me up with the member for Charlton! He said that we looked alike. We have since agreed that he can be Arnold Schwarzenegger and I can be Danny DeVito when it comes to the Twins! It is a real privilege to be mixed up with the member for Charlton.

But, more seriously, the member for Charlton knows what he is talking about when it comes to jobs in our community and, indeed, right around our country. He makes a lot of sense when it comes to jobs. He was right to point out that, for the first time in more than 20 years, there are more than 800,000 people unemployed in our country, which the Assistant Treasurer thinks is funny. But 800,000 people unemployed for the first time since 1994 is no joke whatsoever. The unemployment rate is higher today than it was during the global financial crisis. As far as I am concerned, instead of laughing, those opposite should hang their heads in shame. The reason I am so pleased to support this motion on small business is that small business is the hope of the side when it comes to creating jobs in our community.

As I told the assembled crowd at the Logan Chamber of Commerce Business Awards a couple of weeks ago we salute and we cherish small business for one reason above all others and that is that they create jobs in our communities. In my community and the communities of the member for Charlton and the member for Bendigo, small business is doing a great job: creating jobs. At the awards night, I had the pleasure of sponsoring the Emerging Business Award, which was won by the M1 Business Centre. I want to take this opportunity to, again, congratulate Alicia, Tanayha and Brooke. Two of them were there to accept the award.

I sponsored the Emerging Business Award because it takes guts to go out and set up a small business, to take the risks. There are of course rewards but there are many risks with setting up a small business. The rewards are shared broadly when it comes to creating jobs, as I said, but they also create prosperity and more innovation. All of these things that, I think, both sides of the House can agree on are important.

Unlike the member for Hughes—who also happens to be the Deputy Speakernow—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Very awkward!

Mr Conroy interjecting—

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

An unusual twist; it is a bit awkward, as the member for Charlton says. However, I have not deluded myself into thinking this Abbott government—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I am sure you will not reflect on the chair.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Of course not, Mr Deputy Speaker. I have not deluded myself into thinking the Abbott government have been unquestionably good for small business. They destroyed confidence with that first budget; that is a fact. You can see it in the various business surveys. They originally abolished the instant asset write-off—a policy that I was proud to work on, with the member for Charlton and others. They knocked off the accelerated depreciation of motor vehicles. All these things were very damaging for confidence, investor confidence and small business confidence in our community.

So when the member for Hughes and his colleagues go around patting themselves on the back for their small business policy, let us not forget that they are celebrating reinstating Labor policy.

When the member for Hughes was up that end of the chamber, rather than at this end of the chamber, he was talking about these disastrous socialist Labor policies. These are the policies that the government have just copied in the most recent budget and they want to be congratulated for it. They abolished them, they reinstated them in an inferior form and they now want to be congratulated for this triumph of public policy making by reinstating the policies that the member for Hughes, in the last half an hour, described as disastrous. Their political approach to small business, the way that they have created such uncertainty in the small business sector and the economy really says it all. That is especially true, I think, when it comes to green businesses. In my electorate there is a small but growing band of renewable energy and green businesses, which are small. They will one day be big, because they understand something that the government does not and that is that renewable energy is a tremendous source of jobs and investment into the future.

I want to support those renewable energy companies—those green companies—in my electorate, particularly the smaller ones. Labor has a wide-ranging approach. We will deliver the NBN. We will support small businesses in the renewable sector. We will lower the small business tax rate to 25 per cent, down from 30, and we will develop a culture of innovation in this country, because we want an economy that is powered by the aspirations, the creativity, the ideas and the hard work of all the small businesses which make our economy stronger than it would otherwise be.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

Tonight I rise to strongly support the member for Forde's motion. There is no doubt that small business has been and continues to be the enduring focus and priority of this government. I am particularly conscious of the challenges and opportunities for small businesses in the far north where our economy includes tourism; agriculture and food; mining; manufacturing, especially shipbuilding and maintenance; marine services and sea freight; and commercial fishing and general aviation services. More recently, we have seen a very significant increase in arts and also in some of the very successful fashion designs. In the Cairns region there are over 23,000 registered businesses, with 63 per cent located in Cairns itself.

Micro to small, and small to medium businesses, account for 85 per cent of Cairns' commerce and the vast majority of jobs. They are a vital contribution to the growth regional product in Far North Queensland, of $12.3 billion or 4.6 per cent of Queensland's gross state product.

Coming from a region where small business is the engine room of our economy, the measures outlined in the government's 2015 budget are certainly game changers. Our Growing Jobs and Small Business package is the biggest economic recognition of the sector in Australia's history.

I would like to outline, if I could, a few of the key measures. With the lowering of the corporate tax rates from 30 per cent to 28.5 per cent for small businesses with annual turnovers under $2 million, small businesses will face their lowest company tax since 1967. Up to 780,000 companies around Australia are going to benefit from this measure. The government will also provide a five per cent tax discount to unincorporated businesses with annual turnover of less than $2 million from 1 July 2015. In addition, we will provide accelerated depreciation arrangements for small businesses and primary producers. All small businesses will get an immediate tax deduction for any individual assets that they buy costing less than $20,000. This is a significant increase in the threshold and massive gain to cash flow for small businesses.

The local feedback to these measures has been very positive. In the Cairns Post in May 2015 there was a comment that:

The alliance of Cairns Chamber of Commerce, Tourism Tropical North Queensland and Advance Cairns welcomed a 1.5 per cent tax reduction as a win for employers and job seekers.

The Cairns Chamber of Commerce CEO, Deb Hancock, is quoted as saying:

All those kinds of initiatives count when you’re considering growth and expansion and putting on new employees, so that will be a saving that people can apply.

On the same day, Cairns carpenter Stephen Sondergeld said that he was pleased with the prospect of lower taxes for small business. This aspiring builder and employer is currently undertaking a certificate IV in building. He said gaining such a qualification is a significant investment, and that the government's immediate implementation of lower taxes was certainly a good sign.

It is not just about taxes, though. We are encouraging start-ups and entrepreneurship to fuel investment for jobs in the future. We are certainly cutting red tape so that businesses can focus more on growing and developing new ideas. We are also helping job seekers into work. We are also putting in place a youth employment strategy.

While we are on the issue of helping small businesses, there has been a lot of scaremongering from Labor about changes in penalty rates. The Productivity Commission is not recommending any change to overtime, all-night work or shift penalty rates. The Productivity Commission has asked that the Fair Work Commission take into account some further evidence with respect to Sunday penalty rates in some service industries. The government will carefully consider the final report on any recommendations.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Shame!

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

Let me tell you, as it stands at the moment in the tourism industry when you see cafes and others that are having to shut on public holidays and Sundays, the employer gets nothing out of it whatsoever because they cannot afford to open their doors. I think that this is a win not only for small business but also for those people who are relying on that employment. It is much better for those businesses to operate and employ people on those days rather than be forced to shut their doors and go broke because they are not able to do it.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

And young people too!

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

They are all young people. Lots and lots of young people. I think if there is a good case for sensible and fair change this will be clearly outlined and will be taken to the next level. From a personal view, I certainly support change in weekend penalty rates— (Time expired)

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Like the other speakers in this House, I too am proud to support the motion that is before us, because it is an endorsement of former Labor government policy—policy that I was very proud to support when it was rolled out. This was good, solid Labor policy which acknowledged the important role that our small businesses play and which gave them the incentives to invest and grow. Can you imagine the shock upon the election of a government that pretends to be the government of small business—they pretend to be the party of small business—when they rolled back these reforms? In their first budget they smashed them and they slashed them. They argued that they were worthless reforms. They backed down on good reforms that helped small business. In my electorate, like most electorates, there is a strong network of small businesses. In Bendigo and in regional Victoria, we have a lot of small businesses working hard not just to employ people but also to provide the goods and services that our communities need.

On this year's budget night, the government realised the error of their mistakes and reinstated the Labor reforms—the Labor government reforms. We are quite proud to stand here tonight again to put on the record that we supported them when we were in government and we support them again today, like we did on budget night. The fact is that the Labor Party is the party for small business, and the Labor Party has always been the party for small business. We resent the fact that those opposite stand up and claim to be the party of small business. They are not. They have never employed somebody in small business and spoken to them about a fair wage. They have never grown up in a small business and known what it is like to sacrifice your Saturdays and Sundays to work. They have never really owned a small business. They try to claim that they do, but really they are here to champion only one end of town—that is not the small business end of town and that is not the people who work for small businesses; that is just the Canberra end of town and that is just the big business end of town.

I am one of those people who proudly stands before you to say I grew up in a small business. I grew up in a second-hand furniture store which today probably would not exist, because of cheap imports that have been dumped on our market. I worked on Saturdays. It is where I learned how to count money. Our family really looked forward to Sundays, because Sunday was the day off. We were in a tourist area. We were on the Sunshine Coast, and we would close on Sundays. It was the family day.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

It was your choice, though!

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

That is exactly right. We closed on the Sunday and that was the day on which we celebrated as a family and we made that choice. Businesses today still have that choice. But what I resent about what this government is doing, and what I resent about what the Productivity Commission is doing, is that rather than taking on a debate about reform or about the Fair Work Act they are trying to hide behind a few regional small businesses and behind cafes. They are trying to make the debate about a start on workplace reform not in this parliament, not at the big business end of town and not in the Fair Work Commission. They are trying to make it in the small cafes in regional communities. They are trying to say, 'This cafe will open if we cut penalty rates.' They are trying to say, 'This small retailer will open if we cut penalty rates.' It is just not true. It is wrong that the government continue to use small business, bully small business and make small business a puppet, saying, 'This is why we are pushing reform.' It is wrong that the government are doing this—just what small business in my electorate are saying during this debate.

Some speakers on this motion have mentioned Defence procurement, and I am proud to stand here and say that Bendigo—Josh, are you listening?—makes the Bushmaster. We are proud of the fact that we manufacture the Bushmaster.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

Good on you. I am proud of it. I am proud of it.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

There are 120 small businesses that feed into the manufacture of the Bushmaster. And we are ready to get on and build the Hawkei. But why won't this government secure those 120 small businesses and sign the Hawkei contract so that those small businesses can continue to secure work, going forward? This government, if it were serious about small business, would have a genuine defence manufacturing policy where contracts were signed that saw work tomorrow, not in a decade's time—tomorrow. If this government were serious about small business, it would own up to the fact that this is good Labor Party policy that it is adopting here today and it would actually do right by small businesses, rather than dividing them from their workers.

Debate adjourned.