John Alexander (Bennelong, Liberal Party) Share this | Hansard source

I thank you for the opportunity to speak on this issue which is certainly a matter of public importance. This is a discussion on both the impact of the carbon tax on small business and also on the approach that this government takes towards economic policy. In August 1986 President Ronald Reagan was quoted as saying to a White House Conference on Small Business:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

This has great currency with our own government today, who will in six days time have imposed the world's largest and most far-reaching carbon tax.

Small business is struggling. Last year the Australian Bureau of Statistics released some data on the health of the small business sector across the country. The research found that 31,528 small business operators across the nation shut their doors between the 2007 and 2010 elections. The average number of closures per electorate was 210. Coming in at more than double this was my electorate of Bennelong, with 453. This equates to 3.2 businesses closing their doors each and every week, or nearly one every two days, costing our local community up to 1,800 jobs under three years of Rudd and Gillard. Forty-five per cent of these businesses were in the retail sector, 22 per cent in wholesale, and 15 per cent in manufacturing. To top it off, this survey period concluded just about the time that our Prime Minister looked down the camera lens and made her solid affirmation to the Australian people: 'There will be no carbon tax under a government I lead.'

Yet with the gap in our two-speed economy becoming ever greater, there is still some slight movement from those small businesses left gasping for air. I can just hear the shouts from the ministerial corridors, 'The body still moves. Better slap another tax on it!' The Australian Chamber of Commerce and Industry Index of Expected Economic Performance recently reported eight consecutive quarters of decline until finally detecting a slight increase last month. ACCI Director, Greg Evans, 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.

Small business can expect further headwinds in coming months following the escalating economic and political turmoil in Europe, the possibility of a slowdown in China and the damaging economic impact of the carbon tax.

All we are left to ask is: could there be any worse time for the introduction of a carbon tax?

Small business will be hit the worst because they must pay for the tax at every single step in their production cycle. The fish-and-chip shop owner will pay the carbon tax from the minute the trawler fills up its diesel tanks to go out to sea, through the machinery that processes and cleans the fish, the refrigeration costs that are set to skyrocket, right through to the delivery to the shop and the lights that need to flash outside the front door to attract passers-by. The butcher, the baker and the local fruit and veg store will all be whacked with higher charges that compound throughout the cycle from paddock to plate. The retailers that struggle so much against cheap online sales that are not subject to the GST or the carbon tax, will now have to struggle even further.

Small businesses operate on very slim margins in a highly competitive environment and do not have the same ability to pass higher charges on to their customers. Local businesses in my Bennelong electorate have told me of discussions with their accountants to calculate the extra costs they will be forced to pay. Lyn Bridle, Director of the Epping Floral Centre, said to me:

We are very worried about the costs of the carbon tax—both on our fridges that use a lot of power to keep flowers fresh and also on the extra charges that growers will pass onto us. We fear that the customer will not accept a price hike and therefore we will be forced to absorb these extra costs. This will make it even harder to maintain a profitable local business in the current economic climate.

Discretionary retail sales have already slowed. The introduction of a carbon tax will increase our costs which will further hamper our ability to create employment opportunities.

The Labor Party tries to portray itself as the party that protects jobs. It astounds me that they have not yet learnt that creating business conditions that act like a python squeeze on small business will deny them the opportunity to create jobs in the first place. Last time I checked it is pretty hard to protect something that does not exist.

There is no compensation to small business to try to defray these new cost burdens. Of course, this government did promise them a one per cent tax cut but now even that has been taken away. The government has been very keen to promote that compensation is being paid to households. The Oxford Dictionary defines compensation as:

something, typically money, awarded to someone in recognition of loss, suffering, or injury …

So the government's own policies and their own marketing recognise that they are causing loss, suffering or injury to the people they are elected to represent and protect. Of course, this is done under the guise of an environmental initiative, yet the government's own modelling shows that Australian carbon emissions will continue to go the same way as the carbon tax—up and up and up. Yet if insult and injury is not enough, the government policy still expects to see the occasional breath in the small business body. As President Reagan predicted, they yell out with fervour, 'Quick, regulate it!'

New figures have confirmed that Bennelong businesses and community organisations are dealing more with red tape than ever before. Since the start of 2008, this Labor government has added over 18,000 new regulations. That equates to 11 new regulations every day for 4½ years. We all remember the government's 2007 election promise of 'one in, one out', meaning that any new regulation would be offset by the repeal of another. Instead only 86 regulations have been repealed. That is one for every 210 new regulations introduced. Red tape chokes the life out of local businesses and community groups. The Productivity Commission has estimated that the rewards for Australia to cut red tape would be worth up to $12 billion a year. We can only hope that these kinds of savings can one day be brought about by a future government lest this government needs to start subsidising it.

We, on this side of the House, stand united in our support of small businesses and in support of creating the strongest possible operating environment for businesses to be profitable, to grow, to employ new staff, to create wealth in the community and, finally, to allow people to be able to afford to do something to help our environment. These results will come from positive proactive policies. In my own electorate I have launched the Bennelong Village Businesses campaign. This campaign is designed to support local businesses and to promote the great benefits of advice, service and quality dispensed by local business owners passionate and knowledgeable about their wares. The campaign aims to develop collaboration to establish our villages as a vital and valuable component of our local communities and to increase foot traffic to the villages. We champion small business in the face of this government that taxes where there is life, regulates if life may still exist and then subsidises when business dies.

The unfairness to small businesses is that there is no compensation for the damage done through this tax and overregulation while life exists. When they close their doors for the last time, there will be nothing left to subsidise. Compensation is paid in a legal context when a damages claim is determined through an action that is judged to have intentionally caused damage, the quantum of which can be reliably demonstrated. The term in the budget papers this year to describe the damages claim that will come from the live cattle export industry was referred to as an 'unquantifiable liability'. This government is an unquantifiable liability for small business through this most comprehensive tax that will impact every one of us. This government is an unquantifiable liability for all Australians.

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