PARLIAMENT HOUSE, Canberra: Could I start my remarks today with a congratulations to the Labor Party for at least being able to get two out of three of their members who have a small business background to speak on this matter which concerns small business. So congratulations to the Labor Party, because it must have been exceptionally difficult for them to find such members. It would not have been difficult to find any former union officials, they could have taken almost anybody to talk about union issues and union corruption, if they had wanted to. However, it must have been difficult for them to find at least two out of the three who have a small business background. So congratulations to them. Unfortunately, the minister himself does not have such a background—but you cannot hope for everything!
This MPI is an important one because in some respects small business is at the heart of our economy. We often discuss in this chamber matters concerning the broader economy and larger businesses, but it is actually small businesses which are the engines of our employment. They are frequently the engines of entrepreneurship and also often the mechanism for people to be able to live their aspirations for or to live out their dreams of creating something from scratch, to have a go and to make something of it.
When small businesses are doing well, we, as a nation, do well. We saw that under the Howard government, when over half the workforce were from the small business sector—in fact 51.3 per cent. We saw that 36,000 new small businesses each year were starting up—26,000 each and every year under the Howard government. People were being rewarded through lower taxes for having a go and being successful. There were incentives, too, under the Howard government, such as the low-income tax offset for small microbusinesses to be able to get ahead.
Today, unfortunately, small businesses are not doing as well. Certainly, all of us on this side—and I would hope on the other side of the chamber—would know purely from speaking to small business owners in their electorates that they are doing it tough. We can see it in the shopping strips where there are now, for the first time in a long time, places which are empty and which have a ‘for lease’ sign on the front. We have not seen that for a long time.
When you look at the statistics, they also bear out what we hear anecdotally from speaking to small businesses on the ground. There are now, for example, 14,500 fewer employing small businesses than there were at the end of the Howard government. Small business bankruptcies went up by an incredible 48 per cent in the last 12 months alone. Small business start-ups—and this is also an amazing figure—fell by 95 per cent in the last 12 months alone. Bankruptcies are up by 48 per cent and start-ups have fallen by 95 per cent. It tells me that small businesses are doing it exceptionally tough at the moment. There are many factors that go into whether a small business is successful or not, but government policy settings are critical.
My problem, and the coalition’s critique of this Rudd-Gillard government, has been that the government has made it so much harder for small businesses to start up and to flourish. I would like to go through two, three or four issues which have made it so much harder for small businesses. Of course the carbon tax is the most obvious one—the one which we have been debating for close to two years now. It puts up electricity for every small business across the country by at least 10 per cent and, in many cases, by 15 or 20 per cent. The member for Canberra said that that is a thing of the past—do not worry about the carbon tax; Whyalla is still on the map, so do not worry about it. Well, I can tell you, Mr Deputy Speaker, and I can inform the government members: the carbon tax is real and it is still hurting, particularly those small business sectors that have high energy bills.
That includes, of course, the manufacturing sector, which is so reliant on cheap energy for them to flourish. The member for Brisbane mentioned earlier in this debate that refrigerant gases have gone up 300 per cent. That is what they have to deal with. That was the first issue. And I should point out that the carbon tax is $23 per tonne at the moment, but it does not stop there. Incredibly—and members of the gallery may not know this—it goes up, or is forecast to go up, to $350 per tonne by 2050. So, the carbon tax is forecast to be 15 times higher than what it is today. It goes up each and every year under this arrangement that the government has put in place.
The second issue that I mention where the government has made it considerably harder for small business is scrapping the entrepreneurs tax offset. That affected 400,000 micro-businesses. Here I am talking about businesses earning $75,000 or less—they have faced a 25 per cent increase in their tax bill. This is for the micro-businesses—often mum and dad owners who are just starting up and getting going, who maybe have their business running out of their own home and who are earning less than $75,000. You would not believe it, but the Labor government, who day in, day out says they are looking after the small income person, have in this regard put up taxes by 25 per cent by scrapping the entrepreneurs tax offset.
The third issue I mention is the Fair Work Act. I have coffee shop owners in my electorate—and I am sure there are restaurateurs and coffee shop owners in every electorate across the country—who are saying now that they are no longer opening their doors on Sundays or, if they are, that they are going to do the work themselves rather than taking a day off, because they cannot afford to pay for their staff—it is just not profitable to do so. They are saying it is now more burdensome to employ people. This is another difficulty for small business that they have added, where it is a disincentive to employ people. This is another reason why it is becoming so much more difficult.
The final point that I mention, among a list that I could mention in today’s debate, is in relation to regulations. The member for Hunter said the government should get out of the way of small business. We concur with those sentiments that the member for Hunter put forward earlier in this debate. But look at what Labor have done? They promised that if they put one regulation in, then would take one regulation away. But do you know what they have done? For every one regulation they have taken a way, they have actually added 200 regulations. They have added 20,000 regulations overall and they have removed 100. That is their record and it cuts across all of the activities of small business. Small business owners say to me, as they would say to every member of parliament, ‘We are just getting bogged down with this red tape.’ It is one thing on top of another on top of another, which is starting to really affect them.
This occurs, as I said at the outset, in part because there are so few people on the Labor benches who have actually got experience in small business. You just have to look at the Labor small business ministers. Two out of the last four were former union leaders. They were Mark Arbib—a very well known faceless man who was a union leader, Brendan O’Connor, who was also a union leader. Thankfully, Chris Bowen was not a union leader as far as I am aware, although he did come straight from the party machine and does not have any small business experience. Craig Emerson, to his credit, was not a union leader and I do believe he had some small business background as well, but he got the axe very early on.
If the government does need some instructions about what to do to help small business then I point them toward the coalition’s 10-point plan, where we have outlined 10 simple points that would really help small businesses thrive and accelerate. I ask them to look at those points, examine them closely and implement them, because the course they are on is doing immense damage to the small business sector.