Arthur Sinodinos (NSW, Liberal Party) Share this | Hansard source

Excuse my voice. I have not been shouting at Labor or Nats people today; I have got a bit of a cold. I will try to keep it nice and silky. I am here to speak on the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015, and I am excited. I am excited because we have a Minister for Small Business, Bruce Billson, who was described in the party room as messianic—not just evangelical and not just hot but messianic—when it comes to spreading the message about small business. I share his enthusiasm for small business. The Liberal Party shares Bruce Billson's enthusiasm for small business. It is in the DNA of the Liberal Party to be strong supporters, promoters and protectors of small business.

When John Howard regained the leadership of the Liberal Party in 1995 in his first speech he talked about the importance of families and the importance of small business as part of the core constituency of the Liberal Party and our side of politics. He did that because when the party was established in the 1940s it was established to represent all those in the community who did not necessarily have an organised voice of their own. There were big businesses that could project their own voice and had the resources to do things for themselves. They do not have the protection of being some part of some organised group in society—some corporate group, union group or whatever. It picked up all of those who wanted to be responsible for themselves and fend for themselves and did not want other people telling them what to do. Within that group were the people of small business—the independent contractors, the people who started a business on their kitchen bench or in their home office and the trades men and women who start off employing one or two people and when business is going well they employ four or five people, or maybe nine or 10 people.

These are the people we need to encourage in our society. Yes, a lot of employment comes from big business and a lot of employment comes from the more organised part of the economy but it is in that turbulent, chaotic world of disruption of markets where you find the start-ups and the small businesses coming forward with new energy, new vision and new ideas. The role of parliamentarians on all sides of the parliament should be to promote the best of those start-ups and small businesses.

A series of bills have come before the parliament—and there are more to come—that encapsulate the small business measures put together by the coalition in the last budget to help promote small business. My colleagues on the other side were right to say that in the past, because of budgetary reasons, we have taken away some measures that were dedicated to small business. The reason for that was clear. Some of them were linked to things like the mining tax that never raised the money it was said to raise. We have seen billions of dollars of reductions to forecasts of that revenue. We could not have afforded all of the spending that was linked to those sources of revenue that were not coming forward, so it was important for us to take some hard budgetary decisions.

Small business also has to live in a macroeconomy. It is not just about what you do for small business itself; it is what you do to create a macroenvironment in which small businesses can thrive and succeed. That does mean being responsible about the overall balance between supply and demand in the macroeconomy. It does mean having a fiscal policy which over time gives people certainty that we are on a path to have the federal budget under control. It means having a fiscal policy that is consistent with monetary policy so that we do not have the arms of policy at that macro level pushing in different directions. You do not want an expansionary fiscal policy causing you to have a restrictive monetary policy where you are putting the brakes on the economy and raising interest rates.

Seared into the consciousness of small business are the recessions of the late 1980s and the early 1990s, particularly the interest rates. The late 1980s and early 1990s were the precursor to the very big recession we had to have, according to Paul Keating, who lost control of that economy. He let it expand for too long and he let the Reserve Bank keep interest rates too low for too long and then, when the damage was done, interest rates had to be raised to swinging levels and the result was a catastrophic decline in economic output and activity. The people who paid for that were the employees, trade union members and small businesses.

I do not say it was all his fault, because really he was at the mercy of the advice he received. He received advice that there would be a soft landing in the economy. I remember that very well. I was in Treasury. I remember it was the Reserve Bank that first belled the cat. But what happened in that period? Those interest rates were seared into the consciousness of small business. So you have to get the macroeconomy right. You cannot just focus on measures for small business alone. To this day I do not think that Labor has sufficiently embraced the need for a credible path back to budget surplus as a way of creating that favourable environment for small business. One of the mistakes Ed Miliband made when he became the leader of Labour in the United Kingdom was he failed to distance himself from the economic legacy of the Gordon Brown era. So from day one he appeared to be going further to the left on economic policy instead of tacking to the centre, and the centre is a credible path back to surplus, taking the pressure off monetary policy—