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Tuesday, 31 March 1987
Page: 1528

Senator KILGARIFF —I draw the attention of the Minister representing the Treasurer, firstly, to the fact that small business provides about 45 per cent of Australia's jobs and, secondly, to the 2level of bankruptcies during 1985-86 in which period 6,408 businesses went bankrupt. I also draw the Minister's attention to the 35.6 per cent increase in the level of bankruptcies in the first six months of the 1986-87 year. Does the Minister accept that if this trend continues 8,000 predominantly small businesses are likely to go to the wall in 1986-87? Can the Minister say what impact this level of bankruptcies will have upon Australian workers and specifically how many people can expect to become unemployed this year due to their employers businesses folding under the weight of the Federal Government's high cost, hurtful small business policies?

Senator WALSH —It is ironic or appropriate-I am not sure which; it depends on which side one sits-that Senator Kilgariff should raise the question of small business today because this afternoon, I believe, and if not this afternoon then certainly this week, the Treasurer will be introducing into the House of Representatives taxation legislation regarding imputation; that is, the removal of double taxation of company profits. A very large number of small businesses, of course, are proprietary companies. Right up until now, proprietary companies have been subject to double taxation, first as a company and secondly as the dividends are distributed to the company shareholders. That will cease once legislation which the Treasurer is about to introduce has been passed by the Parliament.

Senator Messner —What does that have to do with it?

Senator WALSH —I presume that even Senator Messner will vote for this, unlike that Government legislation he voted against last year which sought to recover $900m from tax cheats who had seen an opportunity, thanks to a capricious decision by the Supreme Court of Queensland, to get away with not paying the $900m which the courts had found they were liable to pay. I think that even Senator Messner will vote for the tax imputation legislation which is about to be introduced. It will remove from all business-which is particularly important for small business because it depends generally on internally-generated funds for further investment and expansion-the impost of double taxation.

Senator Chaney —Mr President, I take a point of order. The answer is totally irrelevant to the question, which related to the number of personal bankruptcies. Quite apart from the fact that a business which is making losses does not pay tax and therefore is not affected by changes to the tax law of the sort the Minister has described, he is describing changes to company tax law which have nothing to do with individual bankruptcies. Mr President, I ask you, if we are not to have a farce in this place, to ask the Minister to address himself to the scandalous level of personal bankruptcies in this country.

The PRESIDENT —I was listening to the Minister's answer. He was dealing with bankruptcies and small business. I ask the Minister to be relevant and return to Senator Kilgariff's original question.

Senator WALSH —Certainly, Mr President. I have dealt with the alleged concern of Senator Kilgariff for small business and his assertion that small business is facing a particularly difficult time. On the question of bankruptcies, the figures that the honourable senator gave, I think, were that the number would be approaching 8,000 this year if the trend continued. If that is so, that level is approaching the level of bankruptcies when John Howard was Treasurer. If the number of bankruptcies is approaching the level that applied when John Howard was Treasurer, one would have to agree that that probably is fairly serious.

The other question he raised related to the effect on employment. Senator Messner, among others who were interjecting a moment ago, asserted that the Budget forecast of employment was not so much rubbery as stretched. In other words, Senator Messner, among others, asserted that the Budget forecasts of employment growth would not be realised and accused this Government of following the custom established by previous Liberal Party Treasurers of producing shonky figures in Budget Papers. The fact is that total employment for the six months to February of 1987 increased by almost 100,000 which is in excess of the rate of growth forecast in the Budget but is about the rate of growth in employment which has applied since this Government was elected to office just over four years ago, as distinct from employment in the last year when John Howard was Treasurer when not only did employment fail to grow but it fell by 250,000 because 250,000 people lost their jobs.

Senator KILGARIFF —Mr President, I ask a supplementary question. Does the Minister understand that I am referring to personal bankruptcies in business, not company bankruptcies in business?

Senator WALSH —If Senator Kilgariff was referring to sole traders, that was not clear in his question and therefore I was not aware of it.