Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

I have received the following letter from Senator Fifield:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The growing evidence of the effects of the Gillard government's carbon tax on the viability of small business.

Is the proposal supported?

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

Who has the first bat, then? Senator Ryan, off you go.

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

It is a pleasure to rise today to support the motion put by Senator Fifield. But it is not a pleasure because of the issue itself.

What we have seen over the last month alone is a continuation of Labor's war on small business in this country. Today we had the finance minister, Senator Wong, here in question time answering questions from Senator Cormann and others about the cost of the carbon tax on small business. But Senator Wong constantly referred to who might allegedly pay the actual carbon tax bill—the sophistry of this government that says that just because it is only limited to a certain number of payers, the costs of the carbon tax might not being borne by the millions of Australian small businesses.

Senator Wong also talked about how there are compensation arrangements: apparently there should only be a less than one per cent impact on the cost to small businesses. Yet we know now that the reality is very different. We are all hearing stories from around the country about the impact of the cost of this carbon tax on small business; the impact of costs that they cannot necessarily pass on. That is saving consumers some of the costs, at least in the short term; but in the long term we know that if you build up the costs of doing business and if you build up the costs of business inputs that those costs will be passed onto the consumer. But it is small business at the moment that is bearing the crunch.

Senator Wong was talking today, with all the sophistry of this government, about who is actually paying the tax and the alleged Treasury modelling that shows there will only be a less than one per cent impact by the carbon tax on small business. She sounded like Sir Humphrey Appleby in Yes Minister, who famously asked his prime minister: 'Very well, Prime Minister. It all works very well in practice but does it work in theory?' The problem we have with this government is that it is relying on the way it wishes the world was rather than the way the world actually is.

They may have modelling that talks about the alleged savings to business; they may have modelling that talks about alleged costs to small business—but reality is interfering with that. This Labor Party has never known how important small business is to our economy in providing local jobs and services and it has never understood how important small businesses are to our communities.

As I have said before, when we go around our nation to the suburbs of our major cities and the regional towns, what we find is that our community leaders are often our small business people. When we look at who runs the Rotary and Apex clubs, who is sponsoring the local football or netball club, or who might be the captain of the local CFA or rural fire brigade, what we notice is that overwhelmingly our community leaders are our small business leaders. They are the fabric of our community as much as they are the fabric of our economy. What this government is doing to them through this carbon tax is yet another example of the assault on small business. Why is that? Because the Labor Party not only does not understand small business; it has never been interested in it. Despite all the verbiage and sophistry we hear, they do not understand what makes someone get out of bed in the morning, put their house on the line and take the risk of employing someone and expanding that business; what makes someone not see their family and do the paperwork, which this government in particular imposes, at home at the kitchen table. They do not understand what drives people to do that.

Why is that? It is the same reason we do not see a great deal of unionisation in the small business workplace. Whether it is independent contractors or the classic small business owner, they are not recruited into the union movement. They hold no interest for the ALP. I wonder whether there is anyone in the once-great Australian Labor Party that went into politics saying, 'I want to be Minister for Small Business.' I cannot imagine anyone on that side doing that. The job has been thrown around to four people in the last five years. The job of Minister for Small Business has been the leftover job that this Labor Party has thrown as a bone to someone else to fill part of another portfolio or just to keep someone busy. It is not something that someone has put their hand up for and said, 'This is the job I want.' On this side of the chamber it is what motivated so many people, whether from our regional centres, our rural businesses or our great cities, to go into business.

We have over 2½ million small business people in this country. Let us look at the record of this government when it comes to them—the record that this carbon tax is making worse. When the Howard government left office, the ABS estimated that just over 5 million people—5,061,000 people— were employed in small business around Australia. That was more than half of the private sector workforce or just over 51.3 per cent. Today, after nearly 5 years of the Labor Party, it is down to 47 per cent of the private sector economy. When I say that that is an important trend, it is because of what I mentioned earlier. It is an important trend because the small business people in our communities are our community leaders as much as they are our economic leaders.

Since Labor was elected in 2007 we are looking at more than a quarter of a million jobs gone in the small business sector. We know that over the last three or four years a substantial number of jobs created in this country have been public sector jobs. Public sector jobs are important but all public sector jobs, including ours in this very chamber, ride on the back of the private sector economy in this country. The private sector economy rides on the back of small business that once employed more than half the people in this country and now employs just under half.

Small business is the heart of innovation. It is the heart of our communities. It is often the place where someone gets their first job and their start in the labour market. I pushed trolleys around a suburban supermarket and worked in the freezer. How many people have started in their local milk bar, franchise, fast food restaurant or supermarket? That is one of the reasons that small businesses are important. Operating costs are at a 10-year high under this government and they are constantly going up. Despite the smart words and the spin from the smart politicians opposite, they will not concede the obvious: when you make the cost of energy and the cost of doing business more expensive through the carbon tax, you are only driving those costs higher. The number of small businesses that have gone bankrupt in the last 12 months has gone up by 48 per cent.

This government crows about the economy. It talks about how we are the envy of the world. It sits here in Canberra reading the latest statistics—

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

We are!

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

I will take that interjection, Senator Furner, because, when you are seeing small business bankruptcies go up by 50 per cent in 12 months, you have got a problem. The reason is just as it was in 1991 during the recession we had to have. Small business is the canary in the coalmine of this economy. When small business starts struggling you know the economy has a problem. You know that the statistics you might be seeing around the cabinet table do not tell you the full story. Smart politicians and good governments know that. Good governments know that economic statistics, high-quality as they are, tell you part of the story. But when you are looking at survey after survey of collapses in small business confidence and businesses are telling you that they are seeing energy and freight costs—even for greengrocers, as we have seen in today's paper—go up by a third in two months, then you should actually take a look at the theory that is being presented to you and the modelling that you are claiming to rely upon and say, 'Where might this be wrong?'

But no: this government is like the three monkeys—see no evil, hear no evil; I just wish they spoke no evil! They sit there and say, 'No, that is not what our modelling said,' but we are seeing it out in the community. Walk along your local shopping strip and ask the people what it is costing them in their energy bills. Ask them what it is costing those who sell food—particularly those who have to run refrigerators. Ask them what it is costing them in freight deliveries and what you will see is that costs are going up. Anecdote after anecdote, story after story: reality is what is striking this government in the face. It is striking this government in the face because it is the result of the very policy they intentionally implemented. This government introduced a carbon tax. The intention of that carbon tax is to make energy more expensive. For a century we did everything we could to make energy cheaper. It was the basis of the industrial economy in my home state of Victoria.

We knew that cheap energy was a competitive advantage that this country had, that it is one of the reasons we do not have the similarly high taxes on fuels that you see in Europe. It helps everyone, from our regional economies, from our farmers, to those who are simply dropping off the kids at school or running a local courier business.

This is the intentional result of this government's policy: high energy costs, which means that the cost of doing business is higher than it would be. But, no, this government simply refuses. On the one hand it says, 'That's what we intended to do,' but, on the other hand, it says, 'It'll only be less than a per cent.' Reality is striking this government in the face. It is the same reality that we are seeing in the lack of small business confidence. I just wish this government would listen.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

There is no surprise that the peddling of the perpetual scare campaign from those opposite continues along the road of trying to scare businesses or anyone who will listen to their stories and trying to have them believed. We know, and the business community knows, that it is all spin. Telling everybody that the reason their bills are going up is as a result of the price on carbon and telling the electorate that the Labor government does not support small business could not be further from the truth.

We should reflect on the position that the Leader of the Opposition and many others in the other House have taken on this issue. Mr Tony Abbott said, 'This is an impact on the cost of living that would be almost unimaginable.' Mr Joe Hockey said that it would 'drive up the price of everything'. The Senate Leader of the Nationals, Senator Barnaby Joyce, said that it would 'force working mothers to pay over $100 for a roast'. These are all untruths, all complete lies peddled by those opposite. That is what they continue to do. They go out in public and, to whomever will listen, spin nonsense about the effects of the carbon price.

As a government we are fully committed to helping our small businesses, and this is evident through the various policies that we have introduced. With the minerals resource rent tax we delivered a $6,500 instant asset tax write-off. We have established a new loss carry back initiative which can provide tax refunds of up to $300,000 for eligible businesses to encourage them to invest and to adapt. We introduced this country's first Paid Parental Leave scheme, which enables new parents to keep their ties with their employers so that businesses do not lose skilled staff. We are rolling out the National Broadband Network, which will give small business access to quicker internet and lower phone and internet bills.

In the gym this morning, I was talking to a member from the other House. She indicated that, in her electorate in New South Wales, small businesses are crying out for the NBN. They just cannot wait for the opportunity to make sure that it is implemented so that they do not have to travel as far as Sydney and abroad to run their businesses. This is the sort of thing that those opposite will roll back and are opposed to.

The new broadband infrastructure will give business access to technology, including videoconferencing, cloud computing and virtual private networks. The clean energy future package is aimed at our biggest polluters, not at small business. That is where those opposite do not seem to get it. Whilst we acknowledge that those businesses may face indirect costs, documents presented to the government by the Council of Small Business Organisation of Australia said that electricity makes up less than two per cent of their business costs. So, there you go: you have the Council of Small Business Organisation of Australia indicating that electricity costs make up less than two per cent of their business costs.

Treasury modelling estimated that the impact of the carbon price may be about 10 per cent on a small retail business, which would be less than 0.2 per cent of its total costs. We are doing what we can to ensure that the price on carbon will not hugely impact small business. Some of the measures we have implemented include $27.5 million to extend the Small Business Advisory Services for another four years. We have also invested $40 million in an Energy Efficiency Information Grants Program, allowing small business and community groups to find out how to reduce their energy costs. We have invested $5 million over four years to provide clean energy advice to small business. We have also invested in a small business commission so as to give small business a line to the government and to ensure that the government implements policies which hold the best interests of the small business community. A grant has also been provided to the Australian Institute of Refrigeration Air Conditioning and Heating to deliver seminars through Enterprise Connect workshops and industry intelligence networks. These will inform industry of the short- and long-term carbon price impacts and opportunities for energy efficiency improvements.

Not only has the opposition been spruiking the impact of the clean energy futures package on small business; it has been spruiking the impact on businesses in general. Once again, it is blatant scaremongering. Since 1 July businesses have been taking positive steps to make their companies more energy efficient, and they have been cutting their emissions and their power bills in the process. By taking action and driving down their electricity prices, they are reducing their emissions, reducing their energy intake and assisting the environment. De Bortoli Wines in Queensland, Victoria and New South Wales has undertaken a range of measures in all aspects of its business, from production to warehousing to improved energy efficiency and the upgrading of old equipment. The Gillard government is providing $5 million to the company, which will lead to an improvement in their energy efficiency by 36.3 per cent. New South Wales food processors Crafty Chef will install a new commercial blast freezer thanks to almost $500,000 from the federal government. This will reduce the carbon intensity of its operations by 54.1 per cent, reduce energy intensity by more than 56 per cent and boost its turnover by 150 per cent. Fonterra in Wagga Wagga will reduce its carbon emissions intensity in chilling and pasteurisation by 88.9 per cent and its energy intensity by nearly 89 per cent thanks to $152,881 from the government.

The list goes on: CSR Building Products in Ingleburn will receive funding to reduce carbon emissions intensity by 18.3 per cent and CSR Building Products in Vermont will take action leading to emissions intensity reduction by 19.6 per cent. Rickety Gate in Western Australia will reduce its emissions intensity by 69.7 per cent after installation of a battery backup solar power system. A project at Ferngrove Vineyards will see improvements of 62 per cent, Kenner Foods will see a 39.9 per cent improvement and Naturaliste Vintners Pty Ltd will reduce their emissions intensity by 51.1 per cent and improve their energy efficiency by almost 49 per cent.

Really, these numbers are quite staggering and are in stark contrast to the opposition's claim that businesses will be hard done by.

It gives an excellent example of what businesses are doing across our country in respect of how they tackle climate change.

This Labor government has introduced a price on carbon, and it was the right thing to do. On reflection, we should go back in time and remember that the coalition's current opposition leader, Mr Tony Abbott, was caught out on Sky spruiking that the carbon tax is the right thing to do. In fact, he actually said:

If you want to put a price on carbon, why not just do it with a simple tax?

That is what he said on Sky News not long ago. He went on to say:

Why not ask electricity consumers to pay more, then at the end of the year you can take your invoices to the tax office and get a rebate?

So you can see the contradiction, the disingenuous arguments that those opposite are presenting here today when their leader, Mr Tony Abbott, said some time ago, 'Why not put a price on carbon through tax?' He went on further to say:

It would be burdensome, all taxes are burdensome, but it would certainly … raise the price of carbon, without increasing in any way the overall tax burden.

That interview was filmed in 2009, the same year he was given the title of the 'Weathervane'. And let us not forget that was the year he knifed his then leader, Malcolm Turnbull, in the back. So when it comes to contradiction, you only need to look to those opposite and you will find the true examples.

Not only are we salvaging a future for our next generation; we are also making sure that we will have an environment that they can enjoy. We have received huge criticism from the opposition about bringing it in, but it appears that if the coalition was in government it would have implemented one anyhow. In the past we have seen members admit that putting a price on carbon was the best way forward. This was even said by former Prime Minister John Howard and has also been said by the current Liberal leader, as I indicated when relating the Sky News interview.

Last week the member for New England, Mr Tony Windsor, said that Mr Abbott would have put a price on carbon. In the Australian on Friday, Mr Windsor is reported as saying:

The Leader of the Opposition knows that very well, because on a number of occasions he actually begged for the job.

Mr Windsor made the point:

… not only to me but to others in that negotiating period, that he would do anything to get that job.

Mr Windsor continued:

You would well remember—and your colleagues should be aware—that the only codicil that you put on that was: 'I will do anything, Tony, to get this job; the only thing I wouldn't do is sell my arse.'

That is what Mr Tony Abbott indicated to Mr Windsor at the time of trying to form government. How hypocritical can those opposite be when they sit here and wreck small business, putting stress on households when they are all prepared to put a price on carbon anyhow? That is the hypocrisy of this argument and of this motion here today from those opposite.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I would like to add to Senator Furner's comments about the member for New England. No doubt some discussions were had in confidence just after the last election, in that 17-day period, and isn't it wonderful that here is Mr Windsor now putting it all out in the open when he says Mr Abbott would have gone with a carbon tax. I can tell you that is absolute rot. If Mr Abbott was Prime Minister in a hung parliament, how would he ever get it through the parliament? I know The Nationals would not have voted for it. I know that virtually all of my colleagues in the Liberal Party would not have voted for it. Mr Windsor is not telling the truth, just like prior to the last election. Kelly Fuller was interviewing him on Tamworth radio, after Mr Windsor had put a bill into the House of Representatives wanting a 20 per cent reduction on emissions of 1990 levels by 2020 and a massive 80 per cent by 2050. Mr Windsor said: 'That wasn't my bill. No, I just put that in on behalf of some of my constituents.' It was his bill all right, and that is why he drove the carbon tax. That is why he proudly put a media release out saying, 'One of the conditions to support the Gillard government is that we form a multi-party climate change committee.'

What is the idea of a carbon tax? It is to increase the cost of electricity so that people use less. That is the whole idea of it. And now we have got the cost going around and small business—go to your local engineer, someone out in a little country town knocking up machinery, augers, field bins, groupers for the agriculture or mining industry and ask them what effect it is going to have on their industry because electricity prices go up. They are going to have to charge more. So when they build something for, say, a farmer, then what does the farmer do? The farmer pays more. But tell me this: who does the farmer hand the costs on to? Can he go to the cattle yard and say, 'I demand you pay 5c extra for this steer because I've got to pay a carbon tax'? No, they are price takers, not price makers. The primary producers are price takers; they cannot pass it on.

We have raised this issue about the cost on small business. We have this crazy situation of adding another 6.75c a litre diesel tax to our truckies on 1 July 2014 and people on the other side say, 'Just pass it on.' For Martin Group transport, based up there at Scone in the Hunter Valley, it is going to cost them an extra $1 million a year for their fuel. That is the increase in fuel tax alone—$1 million. So they pass it on to the cow cocky, to the farmer. I ask the question again: who does the farmer pass it on to? They cannot pass it on; they just suffer. So what happens then? They have less money, less profit, less to spend in the country towns at those small businesses that rely on that agricultural money going through their communities, keeping those businesses strong, keeping the jobs in place—they cannot pass it on. But those on the other side will never learn that.

When you look at the 31 Labor senators in this chamber, I think it is either 25 or 26 come from the union movement. Have they ever run a small business? The odd one might have run a small business now and then, but they are out there representing the so-called workers.

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

What, you think we've done anything else, do you?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I could take the interjection of Senator Collins and we could go down the union road. Perhaps we might talk about the Health Services Union? We might get onto the Australian Workers Union. I was a member of the Australian Workers Union for one year. I was a member for one year, in January 1978, when I was shearing at Carriewerloo Station out from Port Augusta, where they made the film Sunday Too Far Away. It was just after the state election and the then Premier Don Dunstan said, 'Unionism is not compulsory.' The rep walked into the shed and he said, 'You have a ticket?' I said, 'No'. He said, 'Do you want me to take it out of your wages, or will we take it off the boss?'

I said, 'I don't want one'. He said, 'These are your options: you buy a ticket or you leave the shed.' That was the option after the '77 drought. This is how the thuggery of the unions works. And to think that when I gave them whatever the amount of money was in those days—the only time they ever got it off me, I can tell you—I wondered what happened to that money. We could ask questions about what happened to the AWU money; there is a lot of stuff out in the media now. But let's get back to the argument about small business.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Williams, I was just going to remind you of the matter under discussion.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Getting right back to the matter, Madam Acting Deputy President—I'm sure you're keen to hear what I have to say!

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Williams; let's just focus.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Back to small business. The biggest thing that is—

Government senators interjecting—

I'm trying to focus, Madam Acting Deputy President—directly at you!

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Thank you.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Getting back to small business: the biggest thing that is lacking is confidence. You talk to anyone. I went for a walk in my home town a couple of weeks ago, down the street talking to small businesses. The thing that is lacking is confidence. And why is confidence lacking? Why aren't people spending? Because they do not trust the government. They do not trust them when they have broken promises on adding costs to small business, on bringing in new taxes—and there is a list of new taxes. They do not trust the government on managing money. I had a look at the Australian Office of Financial Management website on Friday: the debt is now $241 billion—it has grown $3 billion in just two weeks! Fourteen days and we have borrowed $3 billion. Now, who is going to pay for that?

As we know, and as Senator Ryan said, the nation's wealth is derived through the business sector. Governments do not have money; they have sold off all the assets—now governments, sadly, just have debt. So that is where the nation's wealth is derived from: the business sector. And who is the greatest employer? The small-business sector. But this government is hell-bent on destroying small business, adding more costs to them. I will quote from the Australian Chamber of Commerce and Industry survey. Mr Greg Evans, Director of Economics and Industry Policy of the Australian Chamber of Commerce and Industry, 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.

…   …   …

It is alarming that important small business growth indicators, including sales revenue, selling prices, profit growth and investment in plant and equipment, are approaching their historical low levels previously recorded during the height of the global financial crisis

…   …   …

Small businesses are concerned that while their selling prices have fallen to record low levels, their input costs remained elevated. While growth in labour costs has slowed in recent quarters, these costs remained at high levels and have resulted in a further fall in small business employment … small business are likely to face further headwinds in coming months due to the continued economic and political uncertainties in Europe, the slowdown in China and subdued consumer sentiment.

…   …   …

Against this difficult backdrop, it is disappointing that the government has imposed further cost increases on small business with the introduction of the carbon tax, which is now particularly impacting on the more energy-intensive business operations.

Small business is the heart of our nation. There is not a large business that did not commence as a small business. They worked hard and they grew. But what we are seeing now—

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Now large businesses are being turned into small businesses!

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Exactly! I take your interjection, Senator Birmingham. That is how big businesses got big—they started off small and they grew big; now we are seeing big businesses winding back. We are seeing record liquidations and insolvencies. Why is that? We hear about this booming economy. The biggest issue is the lack of confidence.

Senator Jacinta Collins interjecting—

As I said, people do not trust this government. They do not trust you with your promises on your carbon tax. They do not trust you to manage money. They do not trust you to run the economy. All you know is borrow, borrow, spend, spend, waste, waste. They do not trust you to build school buildings, they do not trust you to put Pink Batts in buildings. You spent a billion and a half putting Pink Batts in and another billion pulling them out! There's two and half billion of taxpayers' money gone.

And here is the problem that small business is facing: extra costs of doing business. You go out and talk to them. I challenge any one of you: come with me for a stroll through a country town. Stick your head in the door of a small business and say, 'Hello, I'm a Labor senator. I've come to see how business is.' You would want to be wearing a hard-hat, because I know what the small businesses think of you lot. I know exactly what they think of you: they don't trust you, they know you don't care about them and that is why, every time I walk into a small business, they say, 'When is the election? Bring it on as soon as you can; we want to have a say', especially in the seat of New England, where we saw our federal member, Mr Windsor—I live in his seat—have his rant and rave the other day, saying Mr Abbott would bring in a carbon tax. What a joke. Mr Abbott would not bring in a carbon tax. It is a big 'if' anyway—that word 'if'. If the dog didn't stop for a little squat, he'd have caught the fox. That word 'if' means a fair bit. So the situation is this: if you cripple small business, you cripple the wealth-building sector of our nation—and that is exactly what you intend to do, and that is why they don't trust you. (Time expired)

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Williams, your time has definitely expired. Senator Thistlethwaite.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I wholeheartedly agree, Madam Acting Deputy President! Thank you for the call. This is another slack, below-par contribution to policy debate in this place from those opposite. This motion talks about the 'growing evidence of the effects of the Gillard government's carbon tax on the viability of small business', and it triggered me to think about where this 'growing evidence' is coming from. Is it some sort of new robust policy analysis that has been undertaken by the coalition? I thought about that, and quickly dismissed it, because those words 'robust policy analysis' and 'coalition' are like oil and water: you cannot mix them. Could it have come from policy consultations? Well, whenever representatives of those opposite do consult with small businesses, they get a rude shock—because often small businesses will say that they have never been going any better. I will elaborate on that in a moment. So it could not have come from policy consultations. Does it come from new modelling? Perhaps some new modelling, new policy analyses have been undertaken by those opposite. Again, I quickly dismissed that, because that in itself would be a front-page headline: 'Modelling done by coalition'. It does not happen.

Then I happened to read today's Daily Telegraph and there it was on the front page. That is where this came from. That is where the questions that were asked in the chamber today, this policy amendment and this motion came from: the front page of the Daily Telegraph. That is the deep analysis on policy that we are getting from those opposite: they read it on the front page of papers and then they seek to bring it into here! It proves how out of touch they are, particularly with respect to small business and the continuation of this policy of scaremongering with the prophets of doom trying to talk down our economy.

The facts about carbon pricing are illustrative of why we are doing this. The reason why we are doing this is basically for our children because all of the credible economic evidence and the environmental studies demonstrate that global warming will have a diverse and negative impact on our economy and, the longer we wait to take action about it, the greater the cost will be. So, effectively, if we as a generation of decision makers do not tackle this problem now and do not make decisions now, we are simply passing that cost on—and a greater cost at that—to the next generation of Australians.

I offer a second point. Labor and the coalition have the exact same policy and the exact same target for emissions reductions in our economy: five per cent by 2020. So, if it is the case that both major parties have the same target for emissions reductions, the question then becomes: how do we achieve that? How do we do that by the most efficient and effective method with, importantly, the least cost for households, small businesses and large businesses? There have been no less than 37 parliamentary inquiries into this issue in this place since 1992, including the Shergold inquiry which was set up by none other than former Prime Minister John Howard. Each and every single one of those inquiries—all of them bar none—has said that the cheapest and most effective way to reduce carbon emissions in our economy is to put a price on carbon and allow the price effect to dictate where capital will flow and so behaviours will change over time. So what are we supposed to do as a government? Ignore that advice? Are we supposed to ignore the advice of 37 parliamentary inquiries, including those established by the former coalition government, taking into consideration a lot of the comments that were made by senators in former lives when they were ministers and the like and they were supporting carbon pricing? What are we supposed to do—ignore that advice? We will not because the responsible thing to do is to act in the best interests of Australians.

The third point to make is that the carbon price will be paid by the biggest 300 polluters in our economy, not by small businesses. There will be indirect costs. We have never shied away from that fact but they will be 0.7 of one per cent on the consumer price index, less than one per cent and one-fifth of the cost of the introduction of the GST when it was undertaken in 1998. It has been modelled by Treasury, the same people who modelled the GST and found that the cost effect of the GST would be 2.5 per cent. They were spot on then and they will be spot on now. The cost effect will be less than one per cent on the consumer price index. Households, small businesses and taxpayers get compensation to help them make the transition into a clean energy future. The compensation comes in the form of tax cuts. They have already been delivered in the form of increases in pensions and in the form of increases to family payments.

In terms of support for small businesses, the best thing that this government or any government could do is provide a strong economy to do business in. Let us look at the facts about Australia's economy at the moment. Take interest rates. The cash rate is at 3.5 per cent, lower than it was at any other time under the coalition government. Take inflation: 1.2 per cent, very low in relative terms. GDP is growing at 3.6 per cent. Unemployment is at 5.2 per cent. That is a miracle set of numbers for any modern economy, yet those opposite would try and hoodwink the Australian public into believing that the Australian economy is doomed.

Our policies as to small businesses stand for themselves. There is a $6,500 instant asset write-off for small machinery for small businesses, making it easier to invest in more energy efficient equipment, and there is no limit on the number of pieces of equipment for which you can claim this small business asset write-off. It is to the value of $1 billion over 2012-13 coupled with a $5,000 write-off for new vehicle purchases. So there you have great assistance for small businesses.

In terms of reducing carbon emissions, we have an energy efficiency information grants program of $40 million to assist organisations that are working with small businesses to reduce their carbon emissions over time. Take the clean technology program: $1.2 billion of assistance available for small businesses and larger businesses to install new technology to reduce their carbon emissions over time, with $27.5 million for the Small Business Advisory Service, and that program has been extended to continue providing advice for small businesses in the management of their economics, their books and their economies.

We have tried to cut the company tax rates. We tried to last financial year—again, opposed by those opposite as they turned up with the Greens that time and knocked off a reduction in company tax rates for small businesses in this country. As I have listened to those opposition senators who have spoken in this debate I have noted the one thing I did not hear from any of those opposite—and I have just outlined the government's program to assist small business, but this is the one thing that I did not hear from any of the coalition senators—was one policy. I challenge those speaking after me to just announce one policy, to give us one policy that they have got to support small business. Let us have one positive policy that they have to support small business. There are not any, Mr Acting Deputy President; you will not hear any because they do not have any. The only policy of those opposite that we know about is the cutting of $70 billion from the government's budget and that is how they are going to achieve their savings.

Senator Williams, who spoke earlier, was encouraging senators to walk down the streets of local businesses in the country. I do this regularly. In fact, I was in Orange last Friday and I did just that. I walked through Orange and spoke to a number of small businesses. I must say I was following in the footsteps of a coalition representative, because the week before Joe Hockey happened to be in Orange. He was there for a fundraiser with the local member John Cobb and he decided, after making a few outlandish statements similar to those that have been made by the senators opposite today about the effect of the carbon price on small business, that he would go and visit a few small businesses.

It was reported in the Central Western Daily:

Mr Hockey accompanied by the member for Calare, John Cobb, spoke with small business owners in the main street.

Later at a press conference Mr Hockey said a combination of the carbon and mining taxes and rising electricity prices would invariably impact on the cost of living in this city.

The Central Western Daily then said;

However all the small business owners approached by the Central Western Daily declined to comment on Mr Hockey's view of the carbon tax …

They would not support it. They could not even get one of the businesses in Orange to support the view of Joe Hockey. Have a look at the photo. When he wipes the egg off his face, he has a big frown because he got stood up by the Orange small businesses. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this matter of public importance: the growing evidence of the effects of the Gillard government's carbon tax on the viability of small business. Obviously, I must make some reference to Senator Thistlethwaite's contribution here today. He talks about his time in Orange. I would ask the senator if he would like to tell me a bit later how many empty shops he passed as he was walking down the street.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

None actually.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Because retailers in this country are not exactly experiencing a buoyant time. I walk up and down the streets of many country towns and rural centres. In a recent food processing inquiry I walked down the streets of Shepparton in Victoria where there were some 84—and now are I believe some 130—shops vacant due to the fact that there is so much uncertainty in this electorate. Don't go now, Senator Thistlethwaite because I am going to tell you about the policy that we are going to bring to this place when the Australian people get an opportunity to go to the polls about the way in which you have been running this country for the last five to six years. We are going to axe this carbon tax which you have imposed upon the Australian people in what has to be one of the greatest electoral lies in this Federation's history.

Senator Thistlethwaite talked about a slack and below par argument. He said, 'Small business are all out there having an absolute wonderful time.' You, Senator Farrell, would know. The Clare Valley, Barossa Valley, McLaren Vale and Coonawarra great wine regions in South Australia are not having a very good time. There is the high Australian dollar. There is an inability to access capital for an industry which has been in a great deal of need for capital. Unfortunately, now what have they got? Rising energy costs because we have a carbon tax on energy. One of the biggest bottom line items for South Australia's greatest and most famous industry is energy costs going up some 18 per cent in what is a constricted market. These people work in an environment where those they sell to in this country—Coles, Metcash, Woolworths—have already said to people in these industries that they will not accept price rises on their product because of the carbon tax. So what happens?

The producers of wine in South Australia say, 'Okay, we cannot pass it on to our retailer because they have massive concentration of power, so what do we do with it now? What is the next thing? The only piece of elastic in this whole argument is the dear old farmer. Let's go and have a crack at the farmer.' Instead of getting $1,200 or $1,500 or $1,800 a tonne, the farmers are getting $800 or $600 a tonne because the wineries cannot go out of business, so they push back to the easiest possible price mechanism in their cost of goods which is the farmer. Senator Thistlethwaite, these are the small businesses you talk about? I think not.

What about the automotive parts manufacturers? Their energy costs have gone through the roof. In South Australia in my patron seat of Wakefield, where General Motors Holden and a plethora of other firms supply that important industry, an industry which your government over there has seen fit to supply with $220 million, but what compensation did the car parts manufacturers get? Nothing. They are an essential part of the chain but they did not get anything and they have just been hit with this carbon tax. Senator Thistlethwaite, is that one of the small businesses that are flourishing on this wonderful set of numbers which in any other time you would have to say are great? No, there is no confidence out there.

You talk about not being able to operate where the environment is going to take our productivity. Your own man, the Climate Change Commissioner Tim Flannery, has been on the record to say it might be 500 or it might be 1,000 years before we notice the difference. The rest of the world gets that. I have been fortunate enough to see industry in Asia in recent times. They are opening coal-fired and nuclear power stations—a power generator to the tune of one a week through those countries. What are they doing? Are they applying an emissions cost impost on business? No, they are not.

We stand out like a beacon of silliness in what was and should have been a big lesson coming from Copenhagen that the rest of the world was not prepared to take it on. Yet we stand out here because of this murky little alliance with the Greens. I know a lot of you on the other side sort of choke on this whole carbon tax thing and all you reasonable ones over there did not want it. But you had to take it because that was the cost of government. It is about trust, Senator Polley, and you know it is about trust because all the numbers look okay but business—

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, the comments should be made through the chair, not directed at senators. I call on you to explain that to this new senator.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I remind the senator to direct his comments through the chair.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Through you, Mr Acting Deputy President: you are quite right, Senator Polley. I will do that. One day I when I am not so new I will work through those issues. It has been seven weeks since the world's biggest carbon tax began under the Gillard government. The headline on the front page of today's Advertiserthat is our home daily—reads: 'Our carbon pain: small business reeling under strain of new tax.' It states that a national survey of 186 small firms found that 50 per cent are reporting carbon tax related price hikes to power bills and other supplies. But only 33 per cent are passing their costs onto customers. Do you know why? It is because they will not let them. By the way, this paper is not exactly renowned for being all that friendly to my side of politics.

Certainly, the paper is putting it out there, right on the front page, for everybody in my state to see who is being burdened by the rising prices in South Australia, which I outlined before. They include 18 per cent on energy; 40 per cent on power bills; and, in the last generic CPI, 5.6 per cent on groceries. Goodness gracious me! And we are going to give people $10.10 in compensation. This is why there is no confidence. People are not spending their money in the businesses. They are not rushing out and buying new cars. They are not doing that. I think it is somewhat ironic that we are going to give a $5,000 benefit, an instant write-off, to business while Australian industry reels under this carbon tax. All that will do is make it more affordable for people to buy imported vehicles. The unintended consequences of this tax are profound.

Let us have a look at some of the figures for South Australia. According to the ANZ job statistics there were 18 per cent fewer job adds last month compared to the same time 12 months ago. Last month's statistics are particularly concerning, given that South Australia's unemployment rate increased to 6.4 per cent—an increase of 1.2 per cent from June. Those figures are even worse in the seat of Wakefield. The member for Wakefield, Nick Champion, presides over an unemployment rate of 9.4 per cent. In terms of anybody's maths, that is double the average for the number of Australians out of work. And what should we do? In the heavily industrialised area of the northern suburbs of Adelaide, let us put in a handbrake, let us put in a boat anchor, let us call it a carbon price and then let us see how many jobs we can create as a flow-on of that in the industrial area of the northern suburbs of Adelaide.

A Kalangadoo business in the south-east of South Australia, Pete's Fish Farm, produces rainbow trout. It will close in the next 12 months due to soaring electricity costs. His electricity rates jumped from 22.7c to 36.39c. This is just another nail in the coffin. The up-line buyers of his produce now say that they will not take any further price rises. This one is just a mess for Labor.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to participate in this matter of public importance discussion and to speak about the government's Clean Energy Future package. It goes without saying that I support the package. I support it because it will cut pollution and drive investment. It will help ensure that Australian businesses can compete and will remain prosperous into the future.

Of course, carbon pricing is not a tax on small business. Under the carbon price, around 300 of the biggest polluters in Australia will have to pay for their carbon pollution. No small business will have to pay it directly. It is true that when big polluters pass on their costs there may be some indirect cost impact on small businesses, such as higher electricity bills; but, as we know, these are projected to be modest.

Treasury modelling has indicated that the carbon price impact on electricity costs will be 10 per cent. The New South Wales Independent Pricing and Regulatory Tribunal estimates that for most small businesses this will be around $5 a week. This small increase has been accounted for in the carbon price's compensation program. The fact is that electricity prices have been rising for a number of years. Electricity infrastructure established in the postwar period is coming to the end of its life and it needs to be replaced.

We know the average electricity bill rose by at least 48 per cent in the last four years and we know that that price rise has been completely uncompensated. Mr Abbott of course calls this a 'fabrication' and 'an absolute furphy', but the fact remains that investment in infrastructure is the key driver behind electricity prices. Nothing can change that fact, regardless of Mr Abbott's wild claims that it is a fabrication and an absolute furphy.

The state based electricity regulators agree that the costs of replacing poles and wires are pushing up prices of electricity for small businesses. The national Energy Regulator agrees. These are the words I heard on the ABC's PM program on 9 August this year:

The National Energy Regulator says consumers are paying more than is necessary because of the amount that has been invested in infrastructure.

Mr Acting Deputy President, do you know who else agrees with that statement? Certainly a number of Liberal Party frontbenchers agree with that statement. One is Mr Turnbull, the member for Wentworth. I know that he has got a lot of form on disagreeing with Mr Abbott—he really disagrees with Mr Abbott any chance he can get. But let me quote what Mr Turnbull said recently:

There is no doubt the bulk of the reason for the 50 per cent, or thereabouts, increase in electricity prices for example in New South Wales over the last few years has been because of investments in poles and wires …

And as the ABC again reported on 9 August:

… Opposition energy spokesman Ian Macfarlane has admitted state government spending on the poles and wires of electricity networks has pushed power prices higher.

But do you know who else has come to the party, Mr Acting Deputy President? Do you know who else now believes that the carbon price is not the primary driver of electricity prices in this country? It is no other than Mr Abbott himself, the Leader of the Opposition, who just this morning, in a bit of a calamity for the opposition in the Senate—an own goal, given that they had already lodged this matter of public importance—said:

It's true that the carbon tax is not the only factor in the dramatic rise in power prices …

Senator Polley interjecting—

Well, Senator Polley, at last a chink of light from Mr Abbott. Even Mr Abbott himself now admits that the carbon price is not the only inflationary factor.

Climate change presents a great challenge to our nation; a great challenge to our economy and our environment. I say it is the greatest global challenge we face, but with this challenge does come some opportunity. What the government is doing is creating the conditions in which Australian innovation can thrive, in which Australia's resourcefulness and resilience can be supported and channelled to tackle this enormous challenge, this great challenge in our history. The opposition says that is not our job; that it will not make a difference; that Australia should wait, let others do the innovating, let Asia create the new jobs. But I do not think that is us. I do not think it is really in the Australian spirit to limp in. I believe that the people of Australia have the ideas, the creativity and the courage to lead the world in tackling these great changes that we collectively face. I say that a carbon price will create new opportunities for a whole range of innovative entrepreneurs and small business owners across the whole wide range of industries, including renewable energy, carbon farming and sustainable design, as just some examples. I would urge the opposition to think again and get on board.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for the discussion has expired.