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Monday, 2 March 2015
Page: 1710

Ms OWENS (Parramatta) (19:58): I think we have just seen one of the big problems in the debate on the economy at the moment, in that we have a government, which, on the one hand, is supposedly proud of its budget and proud of its appropriation bills, but which still thinks that the thing to do is to spend 15 minutes—in a rather biased way, I would have to say—attacking the opposition.

Every time I gave a speech in a debates on appropriation bills when we were in government, I always enjoyed speaking about the achievements of the government, and what was in those bills because I was very proud of them. As a nation, we want to address what are quite serious budget challenges. I do agree with the previous speaker in relation to that because there are changes in the world—including changes in the countries with which we trade and changes in the way that Australia earns its revenue—that have to be addressed. But we will not be able to address those serious challenges if the economic debate gets down to the level that we just heard from the government speaker—and not just because of the inaccuracies, which were all over it, but simply because they are very hard issues and there needs to be a level of truth and civility when we deal with them.

I want to speak today about the latest quarterly Australian Chamber of Commerce and Industry small business survey, which came out earlier this week. It is a survey established over 18 years ago which examines the business conditions of firms employing fewer than 20 people. People on both sides of this House recognise how important businesses of that size are. That is where our innovation comes from. That is where the pure research, the early stages of R&D, come from. That is where the break-out ideas come from. Small businesses are also the driver of so many of our communities—the local fruit shop and the local drycleaner, as well as our most innovative companies. They are incredibly important, and we all agree on that.

This survey is particularly robust. It is quite extensive in its scope, and the report is quite detailed. But a number of the results in the survey are really quite worrying, and both sides of this House should worry about them. The media statement for the survey says:

… small business experienced painful trading conditions in the December quarter, with all indicators except for wages and other labour costs in contractionary territory.

"Some small comfort can be taken from the fact that the selling prices, profits, employment and investment indexes all rose, but they all remain mired in negative territory.

It also says:

The index of Expected Economic Performance fell markedly for the fourth consecutive quarter—

and that is perhaps the most significant part because that is the indication of how businesses feel about the future, about the next year and the year after that—

and has now been below a 50 reading for three quarters—

that is, in a row. It also reveals that small businesses are expecting future decreases in profits, employment, overtime, investment and selling prices. There are bits of good news in this survey as well. Once you go into it, you find little bits of hope here and there. But that is the story, overwhelmingly, in the media statement and, as you read the report, that is the thing that comes across, overwhelmingly—that small businesses, businesses with fewer than 20 people, believe these are very tough times and things will not improve.

I talk to business a lot. I come from a business background and I spend a lot of time talking to my local businesses, and they have known that something was wrong for quite some time. There has been a sense of unease for probably a year and, in the entrepreneurial sectors, almost despair that things are not moving. They keep looking to the government, they are expecting something from the government that is actually about growth and they are seeing very, very little of it. They see no sense of direction and no commitment to the future. There is also incredible uncertainty in a range of sectors, which is largely inflicted by the government and the piecemeal, almost knee-jerk, way it approaches the development of policy.

We live in a world of incredible opportunity. Our neighbours to the north are growing rapidly. The world both shrinks and expands at the same time. As we get closer together in terms of the capacity of technology, as businesses start to move across borders, as services move freely across borders, the world shrinks; and, when it shrinks, the opportunities expand like an explosion. The opportunities just expand every time the world gets smaller because of its connectedness. And the entrepreneurs of the world know it. The entrepreneurs in our suburbs and in our communities know it, and they are looking for leadership from the government to see what we are capable of, where our prosperity will come from. The only time we hear the government talk about 2050 is when they talk about how much the pension will cost. That is the only time you hear them talk about it. You do not hear them talk about where our prosperity will come from. You do not hear them talking about what the opportunities are, what the new markets are.

You can bet that even the competition review, which we expect to come down shortly, will deal with the competition between existing businesses and existing markets. You can bet it will not talk about this incredible expanding world, this explosion of opportunity, and how Australia competes in that. Similarly, when the Intergenerational report comes down, you can bet that it will extend who we are now, our current expertise, our current sources of revenue and our current areas of enterprise into the future. You can bet that it will not say where our prosperity is going to come from as businesses, where our country is going to generate its revenue and how we get from here to there.

One of the things that particularly concern me about this government is in the area of education, especially when we are talking about 2050. We know, for example, that our skills and capacity as a nation are actually in decline relative to the rest of the world. We know that from the reports on science, technology, engineering and maths, from the incredibly detailed studies of how Australia compares to the rest of the world in those areas, and we know that we are slipping—and we have been slipping for some time, under various previous governments. The blame can be sheeted home to both sides of this House over many, many years for the fact that we are falling behind in those areas and, in particular, falling behind in those areas relative to the rest of the world.

The natural advantage that we had because we inherited an extraordinary education system from our, essentially, British forebears and then, more recently, from many of our skilled migrants. We inherited a very, very well educated population and a way of educating others. But, over time, our competing neighbours, particularly to the north, who are now growing so fast, have been catching up and in some areas they are actually ahead of us. In the major cities of China, like Shanghai, a 16-year-old is already a few years ahead of our 16-year-olds in maths. We are already falling behind.

Yet we are not having a discussion in this House about how you invest in the future capacity of Australians. We are not having that debate, and we should be. We should be realising that a 35-year-old in 2050—a person who, arguably, might then be coming to the end of their highly creative input because the world will be moving so fast—is someone born this year; and the first two years of life, where a child learns so fast, is a bigger indicator of the success of that child at school and at university than any other period of their life. Yet we are not discussing that at all here.

We are not talking about how you prepare a population for the world that we are moving into now, a world of incredibly rapid change and a world where we no longer have the advantage that we inherited. We have done very well with it; we have an education system which teaches people to think. It is an education system that our neighbours to the north are now trying to copy because their education systems have not taught people to think. We are incredibly creative and we teach people to think for themselves and think independently in our education system, and that is a great advantage. It is a great advantage, but it is an advantage which will fade as we are copied, as other nations come in and take our expertise and recreate it in their own schools.

We should be having very, very real conversations about the budget issues. We should not be talking just about government revenue, which the government seems to focus on a great deal. It seems to think that the only way to deal with the revenue-expenditure issue for a government is to cut spending, particularly to lower income and less advantaged people. But we are not having a discussion about how you actually raise the nation's revenue. Where does the revenue come from? We seem still to be a nation that is talking about mining, about what we dig out of the ground and what we grow in the ground. We sell it overseas, raise taxes from that and reduce taxes for our population, and they spend the money and buy bigger houses—and so it goes around. But we are not standing in this House talking about how we can encourage our small businesses and our big businesses—particularly our small businesses, because they are better at it—to innovate in this rapidly changing world and to link our innovation to the innovation that is happening around the world. As the rest of the world shrinks and you find innovators getting together and working together across borders, we are not even having that debate in this House. We are not having a debate about the fact that Australia is one of the worst performing countries in the OECD in spending on innovation and R&D. We did not get to that point in a short period of time. We actually got that way, with bits of ups and downs, through various governments. I could argue that we are better than you, but it is beyond that. We are now one of the worst performing countries in the world in innovation and R&D. Innovation and R&D is what will drive national revenue, and we are not doing it. We are incredibly poor. When you talk to successful businesses, relative to struggling businesses, one of the key things that a successful business will tell you is restraining their growth is access to capital, particularly access to venture capital. The struggling businesses tend to tell you it is red tape and government, but for the businesses that are doing very well that is low down on their list, and they will tell you that venture capital is a major issue.

When we are talking about budgets, appropriations and budget issues we cannot simply have a discussion about where you cut. We cannot have just that conversation, although we do have to have that conversation. We lived in the Howard years during one of the biggest booms the world had seen in probably 100 years. Countries all over the world boomed, as did we. By the time the Howard government lost office we had the eighth-lowest debt in the world. We did reasonably well at paying off debt and had the eighth-lowest debt in the developed world. But during that time a lot of the boom money was spent on middle-class welfare and in tax cuts. There were decisions made then and in the government that followed that put us in a position where we cannot have a budget discussion that talks just about cuts. We cannot. We have to have a discussion that talks about where a country's prosperity comes from. It comes from its people and from its innovators and it needs a government that recognises its role in leading that debate, in finding the areas we have not even been yet. It needs a government that does not consider that when you look at the strengths of the Australian economy you look only at the things that we were good at last week. You cannot do that; the world is changing too fast. When you look at the areas that the government chose to prioritise you see it was mining and mining technology and it was agriculture. It was things that we already know we are good at.

In my community three of the most successful businesses around manufacture, in large manufacturing plants in suburbs like Rydalmere, dietary supplements which they sell to China. They sell them to China because Australia is known as a country that knows how to be safe. It knows how to produce a safe product of high quality. That alone is valuable. There are countries around the world that are adopting our standards holus-bolus but not importing our skills. They are not importing our skills, because we have a government that does not recognise that quality and standards are actually a valuable commodity in their own right and not only make our goods exportable but make our people and services exportable.

We have an enormous amount to talk about when we are talking about prosperity in this nation. We have an enormous amount to talk about when we are talking about bringing a budget back into balance over its cycle. Over a cycle you need to do that. We have an enormous amount to talk about, but as long as we have a government that is willing only to cut and to cut the most vulnerable, and as long as we have government members who simply want to stand up here, in their opportunity to talk about the future, about budgets, about growth and about prosperity, and spend their entire time taking shots at the previous government in slightly, in some cases extremely, exaggerated ways we are going to get nowhere.

I strongly urge the government to lift its gaze, to consider the full range of options and to stop this nonsense of saying that this cut is the only way it can be done, that the only way we can bring the budget back to surplus is to cut this particular group of people and that if you do not do it your evil and do not understand and are turning us into Greece. Not only is it nonsense but it really does not help. Lift your gaze, be a government and support the very people in our community who will make this country prosper.