Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

As the member for Oxley, speaking on behalf of the opposition, made clear earlier on in the day, Labor will be supporting the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015. The government portray themselves as the friend and champion of small business. I have heard that theme come through time and time again by government members who have come into the chamber to speak on this legislation. I believe that they think that if they say it often enough the Australian people will believe them. The reality is that the facts do not support that claim and I want to talk about some of the policy measures that the government have brought in which, in fact, show that they are anything but a friend of small business.

As someone who regularly speaks to small business owners around the country—and I have had personal experience of small business for a long time—I do not consider small business owners as fools. They understand good and bad public policy when they see it. And I suspect they understand it much better than what some of the coalition members who have contributed to this debate give them credit for.

They also understand that so many of the policies that have been brought in by the Abbott government are hurting their business. Firstly, when the Abbott government were elected they started to reverse Labor's instant asset write-off policy in the, I think, 2013 MYEFO assessment. That was the first thing they did. It was a good policy and I will talk about that a bit later on. Winding back Labor's instant asset write-off policy was one of the first measures. But it went much further than that because then, in the 2014-15 budget, we saw the Abbott government eliminate a whole range of business support initiatives that Labor had brought in. Enterprise Connect, Commercialisation Australia, Industry Innovation Precincts, Australian Industry Participation, the Innovation Investment Fund were all abolished by the Abbott government. In fact, they cut some $845 million from industry support programs, programs which were delivering for business around this country, including many small businesses.

But of course the most business-destroying criticism that I am going to make of this government is its disastrous handling of the Australian economy. We heard earlier on in the MPI how unemployment in this country has now reached 800,000-plus. As I understand it, that is the highest unemployment rate in some 13 years. That does not include underemployed, which you can add another seven or eight per cent to. So the real unemployment and underemployment figures right now are probably closer to 14 or 15 per cent.

Not surprisingly, we have seen business confidence across Australia fall. It is because of the Abbott government policies that the economy is trending in the direction it is and, whilst it is true to say that the people who bear the brunt of those policies are the unemployed, the pensioners, the veterans and their families, it is equally small business around the country. When pensioners lose funding and people are unemployed—when they lose their jobs or when their jobs are at risk or when family income is cut and industries close, the flow-on effect will directly fall onto the small businesses of communities across Australia because people will have fewer dollars in their pocket to spend. That means that all of those small businesses which depend on the spending ability of families around Australia will be directly affected.

In my own home state I am seeing that firsthand. Firstly, we have the uncertainty surrounding the submarine contract and naval shipbuilding in this country. The uncertainty is causing some real concerns in South Australia, where I am seeing small business people who might otherwise have expanded their business will not do so because they do not know what the future holds. That means that, as a result, jobs are either being lost or not being created.

We are already seeing the effects of the impending closure of Holden in the northern region of Adelaide. I am seeing it physically and I have gone out there and spoken with many small businesses as well. As Holden winds down, so too do the hundreds of small businesses around them that relied on Holden employees spending money in their businesses. Again, I see this direct effect firsthand in and around my own community.

Recently, I went out into some of the regional centres of South Australia, travelling up to Port Pirie and Port Augusta. I again saw the effects on small business of funding cuts to services in those regions by government. I will come back to that a bit later because I want to dispute one of the claims made by so many members opposite that governments do not create jobs. Governments do create jobs—whilst in many cases those jobs are indirect, they certainly do create them.

The other area of uncertainty—and, again, I have spoken to many people in my own electorate about this—is for businesses that are directly involved in the renewable energy manufacturing business sector. The uncertainty caused by the Abbott government in wanting to change the renewable energy target saw a rapid decline in the amount of money that was being invested in manufacturing businesses across the country. That included businesses in my electorate, and they are not all huge businesses—many of them are very small businesses—but they all would have picked up from the work that was being generated previously, before they all had to stop because of the uncertainty. In fact, I understand that we have seen an 88 per cent fall in investment in the renewable energy sector since this government has come to office, which has meant that some 2,000 renewable energy jobs have been lost in just under two years.

More recently, I was approached by several pharmacies within my region. Their concern was about the Sixth Community Pharmacy Agreement. Pharmacies are small businesses—these are not multinationals; these are small business operators who run a business, seven days a week, and employ several staff. So they are an employment generator as well. They are being slowly but surely squeezed out more and more as a result of the tightening that occurs from within these agreements. A couple of them told me quite openly that, if the squeezing continues, they will close their doors and simply walk away from the business. If that happens, jobs will be lost. These are small business operators responding to the policy decisions of the Abbott government.

In a similar vein, I have also met with a doctor's surgery in my electorate. I have written to the Minister for Health about this, but, in essence, the case is this. The practice is having its Practice Incentives Program payments reduced from $44,000 to $14,000. What that means is that it is going to cut its after-hours service to people from 17 hours a week to four hours a week. That, in turn, means that a receptionist will be losing hours, as perhaps will other staff and doctors. Again, this is a small business. These are the very small businesses that I am sure members who come into this place would like to think they are supporting and defending. They are being directly affected by the policies of this government.

This legislation, effectively, as I see it, is a desperate attempt by the government to win back some of the support and confidence that it had lost amongst the small business community across Australia. I think it is fair to say that both sides of parliament genuinely respect and appreciate the contribution that small business makes to the economy of this country. I very much dispute and reject the comments made by many members opposite in their contributions that Labor do not care about small business and that our track record shows that we do not. Indeed, it was our commitment to small business that underpinned the package that we put together during the height of the global economic recession, where we embarked on a whole range of infrastructure programs across this country. The beneficiaries of that expenditure were almost entirely small businesses across the country. In my view, that highlights better than anything else the support that we were prepared to give small business in this country, at a time when it mattered most.

I want to finish on this note—the mantra often repeated by members opposite that 'governments do not create job but business does'. I reject that mantra. Every Public Service relies on government employees. That includes our law enforcement and Defence services and emergency service people and so on. I would like the members who say that governments do not create jobs to say it to the people of Darwin or perhaps the people of northern Adelaide, where the Defence sector is probably the biggest economic driver for those regions. The truth of the matter is that governments do create jobs. The point I was making earlier, about my recent visit to Port Pirie and Port Augusta, was this: every time a government department in a regional town closes, the flow-on effect to small business in that town is immense. You see the ripple effect right through that community as a result of governments withdrawing funding from government services that were previously available in those communities. So governments do have a direct role not only in managing the economy but also in injecting funds into job-creating projects in the country.

That comes back to the very point that I made when I moved a private member's motion in the Federation Chamber today that related to procurement policies of government. I made this very simple point: the federal government expends over $40 billion a year on procurement of goods and services. Where it procures those goods and services from makes a difference to small business in Australia. If all of those funds could go to businesses in Australia, it would certainly make a difference to many, many small businesses across this country. Indeed, many other countries are adopting what I refer to as smart procurement policies, because they know that the economic lever that that kind of spending creates makes a difference to their communities. Indeed, if governments were to ensure that most of their funds were invested into their local communities, it would improve or increase innovation and investment by local businesses, it would give them certainty and it would make those businesses not only grow but be more competitive with other businesses around the world. That is not just a personal view; it is a matter that has been taken up by other governments, including the US government, which since 1933 has had an act of congress in place which effectively sets the framework for buying local as opposed to sending money offshore and getting goods and services from some provider somewhere across the world, which does nothing for your local industries.

As I said in my contribution today in the Federation Chamber, we saw a firsthand example of that with the purchase of Defence boots from an Indonesian supplier as opposed to the Adelaide company Rossi Boots, which could have provided the same boots. We saw it again when the government fleet in Canberra for the ministers was ordered from BMW as opposed to GMH who had previously been able to provide vehicles that were more than satisfactory for the job. Again, local jobs are being lost because of direct decisions of this government.

I finish on the point that that is exactly what is going to happen if procurement of the Australian submarines goes to an offshore supplier and they are not built in this country. That is directly going to support hundreds of small businesses around this country. It is a decision within the responsibility and control of the government, and we should ensure that it happens.

With those comments, of course we do support the measures in this bill which go, firstly, to providing a tax discount for unincorporated businesses. The discount is limited to $1,000 a year for businesses up to $2 million. I totally agree with the deductibility for small business start-up expenses. I have been in business and I appreciate that that would be useful. As well there is the exemption of fringe benefits tax for portable electronic devices. These are sensible decisions which, in my view, do nothing more than tweak what was previously Labor policy.

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