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Tuesday, 19 November 2002
Page: 6734


Senator WONG (3:38 PM) —I rise to speak to the motion that the Senate take note of the answer, or non-answer, given by Senator Abetz to a question without notice asked by Senator Sherry. The question, as the chamber may recall, is about the compliance burden which is to be shouldered by small business under the proposed choice regime pressed for by this government. We say that Senator Abetz's answer demonstrates a blatant disregard for the interests of small business and a blatant disregard for the evidence which was presented by the small business sector to the Senate Select Committee on Superannuation. The minister failed to answer the question and, instead, bleated on like a broken record about the unfair dismissal legislation. It is as though the only small business policy that the government has is to tell Australian workers that it wants employers to be able to dismiss you more easily. That is the sum total of its small business policy.

When the Minister for Small Business and Tourism is asked about an important issue such as compliance and about the burden of compliance that is intrinsic in your choice of fund legislation, all he can do is respond by saying that the Senate has to pass legislation to make it easier to sack people. He is not interested in discussing the concerns regarding compliance. It is pretty familiar, really. It is similar to the way the government approached the GST and imposed on small business such a significant burden of compliance with the GST. In fact, those are not simply my analogies. The Australian Chamber of Commerce and Industry, in evidence to the Senate select committee, said that the burden that was set out in the government's proposed legislation had some parallels to the GST's business activity statement debacle and warned that business was hypersensitive to red tape. We all remember the BAS debacle and the fact that this government, despite trumpeting its small business credentials, imposed a significant burden on small business, which it still faces.

The government's proposal is effectively a choice maze. It requires 35 steps to be entered into and passed by employers, with significant compliance costs if the small business operator fails to observe those steps properly. It is no wonder that the Queensland Retail Traders and Shopkeepers Association, when it summed up public criticism of this choice regime on small business, said:

When will bureaucrats and politicians realise there is a limit to the ability of a small business to cope with all of this?

Those are the words of small business. It is unfortunate that Minister Abetz refused to answer the question and refused to indicate what the government is actually proposing to do about the significant compliance problems associated with their choice model.

In addition, we know already that significant compliance costs to employers are likely to result from the choice regime that the government is seeking to impose. Treasury officials have given evidence to the select committee that employers would pay $27 million more a year in administrative costs in the first year and $18 million a year for three years after that. That is as a result of the choice regime that the government is proposing. In fact, the Australian Chamber of Commerce and Industry, in its submission to the Senate Select Committee on Superannuation, suggested that the cost of compliance that Treasury has set out is:

... a real stab in the dark—and one that we suspect underestimates the real cost impact.

One wonders, in light of these sorts of concerns and in light of the government's professed interest in small business, why the government is proposing to proceed with what is a flawed choice of fund model that puts increased compliance and administrative costs on business, particularly small business. The reason is that it thinks that this is a union busting exercise. It thinks that this is a way of getting to the unions. It fails to understand that the funds that it is seeking to disadvantage are industry funds which have equal numbers of employers and employees on their boards of trustees.

Labor's solution, as proposed by Senator Sherry, is to seek to amend the bill to exempt small business from the choice regime. We have consulted with the Council of Small Business Organisations of Australia, who support the exemption to reduce red tape. The Labor Party has actually gone to small business and said, `If this choice of fund legislation goes through, what is needed for you?' (Time expired)

Question agreed to.