Matt Gregg (Deakin, Australian Labor Party) Share this | Hansard source

I note that the member for Forrest has encouraged the government to carefully read the insolvency statistics. One thing I would note about those statistics is that insolvency does not equate to the closing of a business. For example, in 2021 the coalition government introduced small-business restructuring, a debt management regime which now accounts for about 20 per cent of insolvency data.

To be a nerd, section 95A of the Corporations Act includes in the definition of insolvency those on small business restructuring, the vast majority of whom actually don't stop trading. They continue to be under the control of their existing directors and continue trading. It's a way of managing the debts of small businesses which have come to a form of trouble over time. Many recover. The same is true of some other businesses that go into administration. I've been involved over the years with many deed-of-company relaunches, and it is not always the end of the road. But the underlying truth of what's raised needs to be discussed. It is a difficult time for many small businesses, including in my community. My home, Deakin, has about 16,000 businesses in it, the vast majority of which are small businesses. It is a challenging time, and they do deserve further support.

We saw, in the decade leading up to COVID, an increased reduction in competition and market power concentrating. The Albanese government has been bringing forward a lot of initiatives going to that very issue. We've got changes to unfair-contracting laws helping to balance the relationship between small and large businesses. We're currently working on reforms to extend unfair-trading policies to small businesses as well. That's in addition to all the work being done in the National Small Business Strategy cutting regulation. We've already seen the beginning of that, with the omnibus act, and there's more work being done to review around 400 more opportunities to improve regulation for small businesses, cutting that red tape as well as looking at another phenomenon, white tape, which is the bureaucracy and challenges that sometimes large businesses impose on small businesses.

There are challenges to the operating environment, and I think across the board we share a desire to create an operating environment where small business can thrive. There are clear roads for us to get there. We need to get rid of nonsense red tape. We need to make sure that we address unnecessary complexity that arises from the federation, with state and federal regulations and regimes sometimes causing unnecessary difficulties for small businesses just trying to have a go. Also, there are our efforts to reduce the cost of energy by including them in the solar batteries program and actually getting on with the job of transitioning our power grid. We're looking at the franchising code to, again, deal with that power imbalance. We have tax cuts that have been extended to 1.5 million sole traders, which are also very important businesses doing a lot of work as part of our local economy.

Small businesses in our country account for the employment of about 5.16 million Australians. That is well over 30 per cent of the workforce relying on small businesses. We need to ensure that we have a competitive environment where small business can thrive—that we have more competition, because it is competition that has brought in higher productivity over the years. It was noted in an RBA article last year, the fact that we had such a reduction in competition, and the reduction in the number of firms dominating different sectors has probably cost us activity of around one per cent to three per cent a year. That is directly undermining the mission we have to increase productivity and competition. Competition is going to be key for us increasing productivity. As I'm sure our friends in the coalition would agree, it is a fundamental part of capitalism that competition is a good thing, and we need to encourage that as much as possible.

The work being done to ensure that small businesses are getting a fair go vis-a-vis dominant players in the market is actually incredibly important work. But a lot of the regulatory reform that I've heard proposed from the other side is really just code for cutting the wages and conditions of working people. That is an experiment that has been tried and has failed for a decade. We saw, again, in the lead-up to COVID, a reduction in competition and productivity results that really began a long-term program of being very low.

We've got to do everything we can to increase competition and productivity within our sectors. The focus is not only on evening the playing field for small businesses vis-a-vis larger businesses. It also needs to be complemented by a dedication to training, making sure that the workforce has the skills it needs to increase the productivity of our business sectors. We also need to be honest within government and make sure that we are being as productive as we can, and that's why I'm so pleased to see the work being done by the Minister for Finance in continuing to review all of our regulations, making sure that businesses don't have to provide the same piece of information more than once—unnecessary inefficiencies that don't go to any of the policy positions of any side of politics.

Sometimes it's easy in politics to attack a regulation that is really going towards a policy ambition of your opponents. You say, 'Anything that they want is bad regulation,' but there are sometimes regulations that don't serve a public-policy purpose. We share a desire to ensure that we have the best operating environment for small business, and I'm proud to be part of a government that is doing the real work.

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