Senator CAMPBELL (Parliamentary Secretary to the Treasurer)(1.50 p.m.) —I want to respond to one point Senator Sherry made about the prospective application of this legislation post the date of the introduction of the capital gains tax by the Hawke Labor government. That is, of course, a statement of fact. However, when I speak about the atypical or hypothetical small business person working for a lifetime and working for decades and giving them incentives to save by investing in their own small businesses and, hopefully, at the same time, creating jobs which are much needed, we certainly think this measure will encourage people to do that. This measure is only one of many measures this government is bringing in to help small business.

I agree with Senator Sherry that all small business people would like to see more cash through the till. They would like to see more consumer confidence and more people spending money. We hope that that will happen. I might also say to Senator Sherry that when I used to go around talking to small business people during the recession we had to have I got fairly harsh statements about his government. If he ever wants to see what consumer confidence can look like under a Labor government, my memory is not that short that I cannot remember conditions then.

Small business people do like the fact that interest rates have plummeted under this government. They did not enjoy 30 per cent interest rates under Paul Keating when they had to go to AGC and pay 30 per cent on business loans. We do believe that $500,000 is fair. This has become the key issue of the debate. We do believe in a small business person who has worked for a long time, even up to decades, committing themselves to investing in their business.

Senator Kernot, they have paid taxes all on their profits all the way through too. Small businesses pay tax on all of their profits, but they also have to live on the money they make out of their small businesses. They have to pay to put shoes on their kids feet, for their clothes and to put food on the table from their small businesses.

We are saying that, if you have spent a lifetime working in a small business, and you sell the business and make a capital gain of $500,000, that will return you about $25,000 a year. Now Labor and the Democrats are saying that is too generous, that a small business person should only be able to make $250,000 at the end of their lives. They may not have superannuation. They might have put all of their savings into their small business and you are saying that $12½ thousand a year as a retirement income after a life of hard work and toil in small business is good enough for them. We are saying it is not good enough.

We think that small businesses should benefit from this measure. We hope that, as a result, small business people will invest in their own businesses, will create employment and will retire on a living wage at the end of that lifetime's work.

The TEMPORARY CHAIRMAN (Senator Reynolds) —I understand that there has been an agreement to put amendment No. 2 separately. So I put the question that amendments Nos 1, 3, 4 and 5 be agreed to.

Amendments negatived.

The TEMPORARY CHAIRMAN —I now put that amendment No. 2 be agreed to.