Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

Western Australian businesses are sinking under the weight of a cost-of-doing-business crisis. Already we know that 97 per cent of all businesses in Western Australia are small businesses. We also know that 1,079 businesses became insolvent in the last financial year. In the June quarter, 308 companies in Western Australia went insolvent. That is one every seven hours.

When Anthony Albanese, the Prime Minister; and Jim Chalmers come to Western Australia in the week beginning 2 September, I want them to go to WA small businesses and explain why our rigid industrial relations system, labour shortages, the high cost of credit, regulatory overload, and inflationary pressures on business inputs are matters that they think do not deserve the attention of the government.

Just last week, the Australian Small Business and Family Enterprise Ombudsman had this to say about the pressures that small businesses are feeling. He said, 'The number of corporate insolvencies climbs towards a 10-year high.' He says that requests for help from small- and family-business owners seeking assistance with insolvency have increased by over 50 per cent this year. These include people 'considering insolvencies and those who are concerned that an insolvent business owes them money'. He goes on to say:

Requests for help from small businesses in financial distress in retail trade and personal services (e.g., hairdressing) have surged since January 2024. As well as being highly distressing for the people involved, these requests are often an early warning sign of tightening trade credit.

That's the advice. That's the bleak warning from the Australian Small Business and Family Enterprise Ombudsman.

It gets worse. The Reserve Bank of Australia said earlier this month that things are getting tough for businesses. The Reserve Bank has said, 'The outlook remains highly uncertain.' The Reserve Bank says that the unemployment rate is rising gradually, many households and businesses are under pressure and the lagged effects of monetary policy are uncertain. What that means is that things are going to get worse. But, as we heard in this Senate chamber last week, the government doesn't think there's a problem. The government thinks the cost-of-living and cost-of-doing-business crises are manufactured. That's not the view of the RBA and it's not the view of the Australian Small Business and Family Enterprise Ombudsman.

The Reserve Bank of Australia goes on to say that financial conditions have tightened for businesses over the tightening phase. It says: 'The cost of business to borrow from banks and issue corporate bonds has increased substantially since April 2022. Tighter monetary policy since May 2022 has passed through to higher rates on new and variable rate debt for businesses.' The future looks very bleak.

What's more concerning about this is that Prime Minister Anthony Albanese and Dr Jim Chalmers said that this would not be the case, when they were campaigning for election to secure government. Anthony Albanese said that things would be better under Labor. They have not been better under Labor, and Western Australian businesses are now paying a very high price for it. Added to this, of course, is the fact that household savings ratios are now the lowest they have been for 16 years, at just 0.9 per cent. It is bleak for families and it is bleak for businesses. The Labor Party, in government, doesn't have a plan and it doesn't care.

When Prime Minister Anthony Albanese and Dr Jim Chalmers come to Western Australia in a few weeks' time, they need to explain to WA businesses why their future is not bleak, and why they can have some confidence to employ people, open bigger businesses or to even just stay in business. Labor has let Western Australian businesses down, and the data shows it.