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Monday, 22 September 2014
Page: 10093


Ms OWENS (Parramatta) (12:23): I thank the member for Hindmarsh for moving this motion because it gives me an opportunity to talk for 10 minutes at least on small business, which has been my life. I was a small-business owner for many years and I managed the trade association for small businesses in the recording sector for seven years. I worked with them to develop international markets and to develop the independent charts, which we still use. I have spent a lot of time in the sector. I listen to the rhetoric of the government, almost on a daily basis, and I am still looking for the action that meets that rhetoric. The competition review, for example, which the member for Hindmarsh said would be out shortly was actually out at 11 am today. So far, I have found three pages that actually deal with small business. It seems to be about privatising health and education rather than the many things that small businesses were promised by this government.

A government member interjecting

Ms OWENS: One day the member interjecting is going to realise that the promises you make actually matter—that the small business sector will judge you by the promises you make. The member for Hindmarsh in his motion referred to the Commonwealth procurement market, which is an incredibly important market for small business, as we all know. I was really pleased back in 2011 when the Labor government changed the procurement policies to improve access to government contracts for small business by introducing a basic contract suite which simplified the contract processes, dealt with complexities in insurance, provided appropriate insurance levels, simplified the language and made it much, much easier for small business to tender for government contracts.

During the period after 2011 the department continued to monitor the effect of the basic contract and by November last year they came up with a new draft to increase the threshold level from $80,000 to $200,000—and that is the change that the member for Hindmarsh is referring to when he talks about the government introducing this new procurement practice. It comes into effect on 1 July. It essentially builds on the 2011 model. It increases it to $200,000, because in the period from 2011 to 2012 alone there were 85,000 contracts with small business for less than $200,000. So it adjusts the level to the appropriate level—and that is a very, very good thing—but it comes after many years of work by the department and by previous governments and builds very much on the policy that was introduced in 2011. I thank he member for raising it today. It is an improvement. Increasing it to $200,000 from $80,000 is an improvement and better reflects the changes in the procurement market since that initial basic contract suite was introduced.

The member's motion also refers to a lovely figure that they bandy around a lot, which is that 519,000 jobs were lost in small business under Labor! Every time it is said I ponder it because I know that in the period of the Labor government, in spite of the global financial crisis, the number of small businesses in Australia actually grew by 39,000. So one has to wonder how in the period of the Labor government there can be nearly 40,000 more small businesses, yet we have a government that continues to repeat this figure of 519,000 jobs lost in small business even though small businesses grew.

A government member: It is a different statistic.

Ms OWENS: It is a different statistic, and I am going to deal with the statistic because it is actually really interesting. The ABS uses a completely different definition of 'small business' to anyone else. If you look around the different groups, ASIC says that a small business has a revenue of less than $25 million and fewer than 50 employees; the ATO has it as a turnover of less than $2 million; and Fair Work, 15 employees. But ABS has a unique one, which is less than 20 employees and then you are a small business. During the period of the Labor government, from 2007 to 2013, there was an actual reduction in the number of people employed in that sector in businesses of less than 20 people. There was, that is actually true, but what the government does not tell you is the number of medium businesses increased dramatically. So during that same time, the number of people employed by medium businesses actually rose by 1.9 million to 2.7 million—a substantial increase in the medium sector of businesses, which are businesses of more than 20 people and less than 200 people.

So what we had here was the number of small businesses decreasing and medium businesses increasing. It could be that the small businesses grew, for example. It could be that they grew so they no longer appeared in the ABS group of less than 20, because suddenly they had more than 20 people. That would account for the fact that there are so many more people employed in small business. In fact; during the period of the Labor government there was an annualised 1.8 per cent increase in the number of employed people, including an additional 822,000 people in medium-size businesses and an additional 757,000 people in large businesses. And there was an additional 39,000 small businesses in the economy. So the government is very, very good! We have seen the government's slight of hand in many, many cases over the last year. We have seen their extraordinary capacity to take one figure and turn it into something else. This is absolutely another case of this. Only the Abbott government would think it was problematic that small businesses with less than 20 people grew to be bigger ones. Only the Abbott government would find that problematic, but they do. It is a convenient figure they can keep bandying about to confuse the issue and make quite an effective small business strategy appear other than it is. I can tell you, Member for Hindmarsh, that it is actually a good thing when a business with fewer than 20 people employs more than 20 people. It is actually good to employ more. It is good to move from the ABS category of fewer than 20 people into the medium one. It is a very good thing.

The extraordinary thing about the Abbott government's rhetoric when it comes to small businesses is the notion of certainty. If you remember, prior to the last election we had a government that was all about certainty: 'We need to provide certainty for business.' Since they have come to government, it has been anything but certainty. You can see the recent announcement of the removal of the instant tax write-off, for example, and the loss carry-back, which has been on and off and the dates were unknown. Then the dates were going to be announced, then the dates were announced, and now they are retrospective. We have businesses that made decisions in the last financial year based on tax law as it was and who will now have to pay additional tax because the tax law has been changed in retrospect. There is nothing certain about that. In fact, it is perhaps the most extraordinary case of uncertainty in the government's short history so far—that you would actually tell businesses that operated under existing tax law in the last financial year that in the next financial year they are going to backdate the law and the businesses will have to pay more tax. There will be hundreds of thousands, if not millions, of small businesses that will be paying more tax unexpectedly because of that backdating.

Look at family day-care providers. They are still unsure about what is going to happen with the funding. They are in every sense small businesses. There has been $157 million of funding cut or put on hold. In my state of New South Wales, there are 231 of these services, supporting thousands of educators, who are all small businesses. They have been waiting and waiting for the government to make any clear statement about what their future will be. The government in the election said that the new changes would not affect existing businesses: 'Go ahead, make your plans, invest. We're for certainty. We won't change the law relating to existing businesses.' But they have. How is that for certainty! They tell you one thing; they tell you that they are going to stick to their word; they tell you that they are not going to affect you; and then they do. They ripped the funding away from literally thousands of small-business operators with no notice and, in fact, in complete disregard of the promises they made.

Look at the submarines in Adelaide. Look at the election promise: 'We will build 12 submarines in Adelaide. We will do that.' They were still saying they had not made up their mind. So people actually made investment decisions based on that guarantee. Small businesses made investment decisions based on that guarantee. And what happens? Gone. So much for certainty! In fact, the rhetoric by this government is phenomenal: 'We're for small business'. But their actions are completely the opposite.