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Thursday, 2 April 1987
Page: 1966


Mr PETER FISHER(1.25) —I can only agree with the honourable member for Jagajaga (Mr Staples), who is showing obvious frustration at his Government's prostitution to this country's money manipulators and big business. I want to speak today about the effect of this Government's policy on small business. We all know that small business is a dynamo of commercial activity in Australia and a major employer in our economy. There are today approximately 800,000 private enterprises in Australia, 98 per cent of which are classified as small. It can be assumed from these figures that total employment in small business is as high as 2.8 million, or 55 per cent of our private sector work force. It is obvious, therefore, that this sector is of immense economic significance. It is the largest single contributor to the creation of wealth and pays over half of all State and Federal government taxes and charges. Small firms have never sought government support, subsidies or preferential protection, unlike our big businesses such as the Broken Hill Proprietary Co. Ltd, the textile and footwear industries and even the motor vehicle industry.

Today, as the ramification of high interest rates, high taxes and excessive regulation and bureaucracy, combined with the restrictive work practices that occur within small business, a revolt is occurring as generations of successful and productive endeavour is threatened. This Government has also removed or further eroded the asset and capital base of small business with capital gains taxes, fringe benefits taxes and, of course, the assets test. I refer to just one example of the bureaucratic nonsense of the fringe benefits tax: The case of a publican who lives in his own premises and is being charged $1,000 in fringe benefits tax simply for the cost of the accommodation and board of a 22-month-old son.

The Prime Minister (Mr Hawke), wisely, announced yesterday that he will not be having an early election. How wise this decision is, because he knows that his Government would be totally destroyed. This Hawke Administration is widely perceived as being unbusinesslike and extravagant in pandering to noisy minorities who believe they have rights and entitlements without obligations. The irresponsible must not be allowed to unload on the responsible and hold the productive and enterprising sector to ransom. Only in Australia, in our country, can one leave school and obtain unemployment benefits and stay on them until eligible for an age pension.

I raise the problems of small business today because of the effect of the primary industries downturn on non-farm businesses throughout Australia. Last week, in my constituency, 20 farms were advised that their credit was cut off. They now have a month to sort out their problems, and possibly in a fortnight's time will receive a letter from various financial institutions calling in their loans. Between 1984 and 1986 there has been a significant decrease in employment in non-farm businesses in the dry land areas of the Mallee and the Wimmera. Employment has fallen over 12 per cent. Some employees, especially younger and single persons, have already relocated, at least temporarily, but unemployment levels have risen. Data show that the number of businesses has remained steady but this is due to a rise in the number of single contracting services which have been set up, compensating for the fall in the number of multi-employee businesses.

Governments so far have not provided any measures to assist business to retain viability or to adjust to the rural recession. In the Mallee, most farms are today making a loss. In fact, very few are even making a small profit. As we know in the wheat industry throughout Australia the average income per farm will be only $1,200 this year. People's spending, therefore, is going to be limited to those items essential to the running of the business and household, such as food, fuel, chemicals, fertilisers and the maintenance of machinery. It has been estimated that half of the farm households in the Mallee today are being supported by household support schemes, unemployment benefits or family members seeking off-farm work.

It is clear that in this situation the reduced expenditure will greatly affect farm inputs and spending will be mainly on farm imports and normal household items. Businesses at risk, therefore, are in the areas of furniture; clothing; electrical retailing; motor vehicles; machinery; and materials involved in farm and home improvements, such as fencing, sheds, yards, et cetera.

Many of the businesses will fail if we do not receive some form of government assistance. I was advised just yesterday of a motor dealership in my own home town of Rainbow that is in serious trouble and likely to close down after 100 years of operation in this community. Many other businesses in similar situations are under severe threat.

Government employment levels are also falling in our towns. Between 1980 and 1986 the number of children at primary and secondary schools in the Mallee section of my electorate fell from 2,940 to 2,300, a fall of over 18 per cent. In the last two years the number has fallen by 8.8 per cent. It is likely that the number of teachers has also been reduced by at least half of this percentage.

A similar position exists with our rural services, such as our hospitals. Medicare has forced many people today to by-pass their bush nursing hospital system and go to public hospitals many miles away, in many cases over 100 miles from their home. This, of course, apart from reducing the viability of the bush nursing system, is putting extreme pressure on the public hospital system. The real question, therefore, that we have to ask is this: Can Mallee communities and communities throughout Australia like them, and even the Victorian economy, handle the effects of 10 to 20 per cent of farmers and townspeople leaving their areas over the next one or two years?

As we lose people we know that difficulties are created in maintaining, for instance, school bus routes-and already in Victoria these are under review-school councils, which are burdened with never-ending reports and bureaucracy; and local voluntary services such as fire brigades. We are not being helped by governments, which are pulling out many of our rightful services in the area, such as ambulance services, the State Electricity Commission, rail services and the Rural Water Commission. Many communities today are on a knife edge. They are just managing to support their hospitals, their doctors their agri-businesses and, in particular, the secondary school system. A loss of services, of course, will increase the cost of farming and of living in rural areas. People today are under enormous financial and social stress-the stress of people leaving, losing family and friends; rapid change that is creating all kinds of social and family problems with ultimately greater expense to the taxpayer than would be involved in short term assistance measures.

A majority of businesses must remain in our rural communities. Rural peoples need and deserve a range of products and services at reasonable convenience and price so that the cost of living and operating a business in the country is not prohibitive and the quality of life remains acceptable. What, then, are government's options for assistance? When will this Government understand that the small business sector is best served in an industrial market economy by conditions that encourage growth, rather than today's negative conditions? Obstacles should therefore immediately be removed by Federal and State governments alike in relation to restrictive work practices. I have already mentioned the new taxes that this Government brought in, despite promises not to do so.

The Labor Party claims that Australia's rural recession is due to a downturn in world commodity prices. That is misleading. Falling commodity prices are affecting specific sectors of the rural industry. The community as a whole, however, is suffering from the crippling effects of the current Government's economic policies, particularly high interest rates. There are many areas which the Government has failed to pursue to improve the economic problems of primary producers and small businesses. For example, the cost pressures on the nation would be substantially improved if the Labor Government were to reduce fuel prices. This would reduce inflation and in turn, of course, reduce interest rates. I see the honourable member for McMillan (Mr Cunningham) in the House. I remind him that the task force of which he is chairman, when it visited central Victoria last year, reported that:

The rural adjustment scheme could be extended to include identifiable businesses affected by the collapse in world commodity prices for agricultural products.

I endorse this view completely, but no action has been taken, only reinforcing the Opposition's contention that the rural task force was never intended to be any more than a public relations exercise, and it is a failed one at that.

Small business operators are typically owner-operated, are fiercely independent and object to outside controls. They are prepared to take risks in a volatile area and have recognised that job satisfaction for employer and employee alike is worth the risk of a high failure rate. The small business sector has the potential to make Australia an industrious nation if incentive is given to the use of the richness of our human resource and our natural opportunities, but government simply has to act. Our rural communities can take no more and they are under real threat at the moment from this high-taxing, high-interest, extravagant Hawke Government.