Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

Senator Urquhart, in her address, took exception to the motion as submitted by Senator Fifield and its reference:

The Gillard governments' plan to damage business and consumer confidence through the introduction of a carbon tax.

I suppose Senator Urquhart objected to the use of the word 'plan' in particular, as if the government had an intention to do this, so that has prompted me to think of something. I am genuinely unsure as to whether it is a plan by the government in the sense that I think Senator Urquhart referred to because, while it seems comprehensive and it seems orchestrated and it seems to be implemented with gusto in terms of negative impacts upon small business, I am not quite sure if it was actually intended in that particular way. But let us go through the list of measures that have been undertaken and have made life more difficult for small businesses and have attacked them as the very basis of our econ­omy and, most importantly, have attacked small business people, not just as the basis of our economy but as the basis of our commu­nities. I do not disparage those who work in larger companies—I have myself—but when you go down to the local footy club—whether it be rugby, rugby league or Aussie rules—or when you go to the local netball club, the banners around the footy field or the netball field are those of the local sponsors. They are the people who tip in a bit to actually help those community organ­isations work and the people who often make up the CFAs in my home state of Victoria. Often the local leaders in our community are small business people. This is one of the most objectionable facts about what Labor has done to the small business community: it has attacked these people who are the fabric of our community. But let us go through the list. We cannot start without mentioning the carbon tax. It is the point of today's debate. But then, of course, there was the promise that there would never be an increase in the superannuation levy, which was announced before the last election in part of the tax ambush of the Australian community. There is the reregulation of the labour market. There are the attacks in this budget particu­larly on contractors—because, God forbid, we actually let people become contractors and work at a pace that they wish to and do projects that they wish to. I note Senator Cameron has just taken a note, and I am sure he will have something to say about this. This budget launches an attack on a most basic right, and that most basic right is to choose when and how one works.

We have the destruction of sectors of the economy through ill-thought-out programs like pink batts. There was quite a sustainable home insulation industry before the govern­ment announced the pink batts program that turned out to be such a disaster. Many of those people were the ones who suffered and saw their businesses destroyed because of the disasters that this government announced and implemented after it was warned that their programs would cause substantial problems. You cannot throw out a few billion dollars to people in the economy without any conditions about entry into the industry, other than having a help line and a phone number that you ring up and get your cash from, and not have an impact on the industry that is there—that employs people. The businesses that were operating worked. But in order to meet the government's illu­sion of economic activity—it wanted to flap around and look like it understood what was happening with the global financial crisis—it destroyed an industry. What worries me is that more and more in recent weeks we are seeing this potentially happen in the renew­able energy space.

We have the budget deficits and the record levels of government borrowing that are having a direct impact upon interest rates. That has two impacts. The government is crowding out private sector borrowing, which is basic economics and which has been identified in reports from committees of this house. Not only does that mean the government is forcing up interest rates through massive demand for funds; it is also putting at risk the fact that our banks are huge importers of foreign capital—some of the largest in the world—and that our banks need the good credit rating of the Australian government, and that demand is putting pressure on the dollar. When the government is out there borrowing such funds and when interest rates are higher than they need to be because inflation is being fuelled by this government's completely irresponsible bud­geting, we also have a situation where that forces interest rates higher than they other­wise need to be, which forces the dollar higher than it needs to be. So any small business that is operating in an import competing space—where people can either buy offshore or substitute goods or substitute services—are having a more difficult time than they need to because of this govern­ment. It actually looks like a fairly compre­hensive list, and I have not even mentioned them all because of time constraints.

What this government has is a complete lack of understanding of the challenges faced by small business and particularly small business people. They are not just numbers on a spreadsheet. They are people who have a limited number of hours. They have the same 168 hours a week that you and I have, Mr Acting Deputy President, and every extra burden, every little bit of business whereby this government makes life more difficult for them, works out as less time in the business or less time with the family. But this govern­ment does not understand that. They do not understand the challenges and the ethic of small business people.

But the question is: is it a plan? I am not quite sure, because while this government has shown that it is appalling with imple­mentation, I suppose we could not deny the fact that it could be just an accident. It could be an accident that is simply based on inc­ompetence or indifference. So, whether it is a plan or not in the sense that Senator Urquhart used, I am not sure. The truth is that it is probably a combination of them all. But more important is this government's stubborn refusal to acknowledge the evidence. The evidence of damage to the small business community and to business confi­dence is nothing short of extraordinary. I will just go through some examples from over the last few months.

The June quarter ACCI-Westpac Survey of Industrial Trends showed a downturn in business expectations, sentiment and out­comes. It says that the imposition of new taxes and soft demand from the household sector were among the key concerns of the businesses that were surveyed. Profit expect­ations for the next 12 months were at their lowest level in two years, with business facing rising production costs without the ability to pass these on to consumers. But I suppose the carbon tax will fix that, because we keep hearing about how the carbon tax is going to solve all the problems of the world. It is going to lead to new jobs and new industries in Australia. It is the first tax in the history of humanity that has created jobs, as if there is no deadweight economic loss to a tax.

If we ignore that, then let us go to the next one. In July the Sensis Business Index showed that business confidence fell from 44 to 28 per cent in one survey—the second biggest drop in the 18-year history of the index. I suppose the only pity about that is that we did not have a similar survey during 'the recession we had to have' in 1991. Small business support for Labor was down at levels not seen since the dying days of the Keating government. But this government did not listen to that. In July 2011 the ACCI Survey of Investor Confidence showed that business conditions had fallen to a level not seen since the survey began in 1998. In August, the Australian Retailers Association survey found that 83 per cent of retailers are expecting consumers to spend less as a result of Labor's carbon tax, with a further 85 per cent believing the carbon tax will have a negative impact on business profitability. But that is okay because the Labor members opposite know more about small business than do the people surveyed.

Let us make an important point here about Labor's so-called renewable energy package, which we all know is a euphemism for the carbon tax: they did not model the impact on small business. They did not model the imp­act on small business at all. There is nothing in that package that talks about what is going to happen to the critical sector of the Austra­lian economy that employs roughly half our people—nothing, except $30 million or $40 million to advertise to try and make small business not be as worried. But they are not as silly as the government thinks. In August, the ACCI Small Business Survey confirmed that small business conditions and expecta­tions continue the trend of the previous 12 months and continue to fall. Profit growth, sales revenue and selling prices all declined as well as investment, most importantly, in building structures and equipment. If we go back to the eighties—and I remember read­ing and hearing speeches from then Labor ministers—the key driver of the future of the economy was business investment. When that starts to decline, it is the beginning of a very long tail that will lead to declining investment. The government might say they are investing, but that is no substitute for private sector investment. The government is levying a new tax, shelling it out to its favoured industries and prohibiting other industries—like trying to clean up coal use. The government using the power of patron­age is not the path to having future strong investment, particularly in small business.

I will go on. In September, the ABS figures revealed that retail was continuing to soften. Finally, earlier this month, the latest Sensis Business Index showed that small business profitability fell during the current quarter and again with expectations continu­ing to fall in the next 12 months. Business confidence in the current government fell from 28 to 15 per cent and support for the carbon tax was a record minus 48 per cent. If the government will not listen to small business people, if it does not care about small business people, then the very least it could do is to start listening to the evidence. That is only a number of business surveys and ABS surveys from June to September and the evidence is overwhelming. Whether it is a plan or a result of their incompetence, I will not try to peer into their souls but I will say that a refusal to listen and being ignorant is just as negligent as not knowing at the beginning.