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Thursday, 14 August 2003
Page: 18590


Mr CIOBO (2:47 PM) —My question is addressed to the Minister for Small Business and Tourism. Would the minister inform the House of how the federal government is assisting Australia's 1.1 million small businesses to grow? Are state taxes an impediment to small business, and what is the government's response to this impediment?


Mr HOCKEY (Minister for Small Business and Tourism) —I thank the member for Moncrieff for his question and recognise that he represents a large number of small businesses on the Gold Coast. He is a real fighter for small businesses, as are so many people in the coalition because so many of them actually have experience in small business, unlike the Labor Party, where it was left to Barney Cooney to carry the torch. We miss Barney Cooney over here.

As members of the parliament will be aware, the coalition has done a lot to reduce the taxes on small business: reducing company tax from 36 per cent to 30 per cent, abolishing financial institutions duty, abolishing stamp duty on the transfer of shares, reducing the tax on motor vehicles, reducing income tax—and so many small businesses are sole traders—so nearly 80 per cent of Australians pay no more than 30c in the dollar. We have abolished provisional tax—some of us remember provisional tax; many people might have forgotten about that—and a range of other taxes. We are reducing taxes, whereas the Labor Party, unfortunately, tragically, is the party of higher taxes.

As I said in the parliament yesterday, the Trowbridge Deloitte report on state insurance taxes indicates that the Australian states have the highest insurance taxes in the world, with regional Victoria collecting up to 78 per cent tax on insurance premiums. The second highest jurisdiction in Australia is New South Wales. In the last couple of days, Bob Carr has said he has beaten public liability premium increases. He should ask the Jillamatong Mountain Muster in the Snowy Mountains, in Eden-Monaro, why it is not in business anymore. He should ask the backpacker hostel at Nambucca Heads in the electorate of Cowper why it is not in business anymore. He says he has beaten public liability insurance premiums. The fact of the matter is that he has not.

Labor governments could halve tomorrow every insurance premium in the country if they were serious about doing something about state taxes. It might be the Treasurer's birthday today—and happy birthday to the Treasurer!—but it is state Labor treasurers' birthdays every day. It is Michael Egan's birthday every day, because—get a load of this—just last year New South Wales collected $1 billion more in stamp duty than it expected. This year it is collecting $100 million more in land tax and $200 million more in payroll tax.

When it comes to payroll tax, the states are swimming in it. According to the New South Wales State Chamber of Commerce, if a small business with 12 employees employed one more person it would be hit with a payroll tax charge of $36,000 straightaway. So you employ one more person in New South Wales and you can pay up to $36,000 in payroll tax. That is even before Bob Carr extended payroll tax to include extra items such as a superannuation guarantee, and it does not take into account the fact that real wages are increasing but the New South Wales payroll tax thresholds are not increasing at the same time.

For the states, this is like a pokie machine that just keeps on paying. At the same time as all these businesses around the country are going out of business because they cannot afford insurance premiums, the states are collecting up to 78c in the dollar in taxes on insurance. Bob Carr and all the state Labor premiers are increasing their tax hike. It is no wonder that small business is abandoning the Labor Party.