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Thursday, 13 March 2008
Page: 1754


Mr CIOBO (2:46 PM) —My question is to the Prime Minister. Is the Prime Minister aware that the most recent Sensis survey of small and medium businesses shows the largest decline in confidence in government policies in the history of the survey? Does the Prime Minister really understand the impact of the government’s policies on Australia’s 2.4 million small businesses?


Mr RUDD (Prime Minister) —I thank the honourable member for his question. Small business is the engine room of the Australian economy. We on this side of the House are fully supportive of the activities of all those entrepreneurs out there risking capital, working hard and doing their bit to raise an income for their families and to boost the long-term growth of their businesses. That is really important. I will tell you what crushes the confidence of small business, however: when they have to confront one interest rate rise—

Opposition members interjecting—


The SPEAKER —Order! The question has been asked.


Mr RUDD —after another because a previous government unnamed allowed inflation to get out of control. It is a simple fact that, if you have upward pressure on inflation, what follows is that you get upward pressure on interest rates. That is what has happened—one rise after the other. If you consider the impact on running a business of 12 consecutive interest rate rises on the cost of capital to finance a business’s operation, this has a significant effect on the way in which they view their future operations. When it comes to dealing with this challenge for the future, this is why the government has placed front and centre the need to confront the challenge of inflation—something which the shadow Treasurer regards as being a fairytale and something which various other members opposite—


Mr Ciobo —Mr Speaker, I rise on a point of order. My point of order goes to relevance. The question was about a lack of confidence in the government’s policies—not in the economy but in the government’s policies.


The SPEAKER —The honourable member for Moncrieff will resume his seat.


Mr RUDD —On the question of confidence, it is fundamentally dealt with: when you have a challenge of rolling interest rate rises, it affects the cost of capital and therefore your future plans for your business. There is a second thing which affects confidence when it comes to small business, and that is a government which sat there for 12 long years and did nothing on the business deregulation agenda.


Mr Hockey —Mr Speaker, I rise on a point of order. My point of order again goes to relevance. It was a question directly about the fact that, under this Prime Minister’s government, small business has the lowest level of confidence ever in government policies.


The SPEAKER —Order! The member will resume his seat.


Mr RUDD —For 12 years, they had the ball at their feet to do something about deregulation. They had the ball at their feet when it came to doing something about the complex interplay of federal, state and local authority regulatory impacts on operating a business. They had 12 years to actually produce an outcome on this. Instead there has been a red-tape explosion across this country under the 12 years of political tutelage of those opposite. If you are running a small business and have to deal with a mountain of red tape on the one hand and 12 interest rate rises in a row on the other, it affects the way in which you plan the future operations of your business. I would suggest that those raising any substantive question about small business in this parliament should reflect on what opportunities were presented to them over the last 12 years and ask themselves this question: ‘Why did we do nothing about it?’ Instead, embrace a course of action with us to fight the fight effectively on inflation, to put downwards pressure on interest rates and to act decisively on the question of deregulation as it impacts this critical sector of the Australian economy.