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Wednesday, 2 November 1983
Page: 2200

Mr SHIPTON(2.52) —I raise the following matter of public importance:

The growing concern and alarm in the community at the continuing Government attacks on, and neglect of, the small business sector.

I propose this matter today because of the growing concern and alarm in the community and amongst small businesses in Australia at the continuing Government attacks on, total neglect of and negligence towards small and medium sized businesses in Australia. This Government has ignored small business. Its neglect of and disregard for small businesses in Australia is momentous, consistent and continuous. It is continuing today. The Government does not understand small business. In fact, the Government's policies threaten small business.

The Minister in charge of industry and commerce and small and large business in Australia, the Minister for Industry and Commerce (Senator Button) in fact has threatened the investment and creation of capital in small business in Australia . The Minister in charge of industry and commerce, the Minister responsible for small business in Australia, proposes a capital gains tax for small business. The Minister for Industry and Commerce persists in promoting the idea of capital gains and wealth taxes. He continues to speak strongly in favour of capital gains and wealth taxes. He speaks in that way in the Senate and in public. The Minister responsible for business has advocated a strengthened capital gains tax to apply when people sell businesses, in return for the Australian Labor Party's election promise of taxation concessions for small business. The Minister for Industry and Commerce, the Minister in charge of small business, has said that if we do not strengthen the capital gains tax which applies when people sell their business we will be creating another taxation rort in Australia. Those are the views of the man responsible for the administration of small business in Australia. In the Senate the Minister said:

It is my view that there should be a capital gains tax in Australia and I will continue to advocate it both publicly and within the Government.

That is the view of the responsible Minister of the Hawke Government towards small business in Australia. It is reprehensible and appalling that the Minister in charge of small business in this country has such an attitude. Since this Government came to office we have had continuing threats from Ministers and members of taxing wealth and capital and imposing death taxes. Labor clearly wishes to tax capital in every way it can-through capital gains taxes, wealth taxes and death and probate taxes. Labor does not understand that capital is created by profits. Labor does not understand that capital is savings, profits and funds invested by owners and families in businesses. Labor does not understand that today business, including family businesses, investors and entrepreneurs are short of capital for investment and that what we ought to be doing is putting into place policies that encourage the creation of profit, savings and capital.

The ALP Government should be encouraging small business to make profits and to generate capital for investment, but its policies are not doing this. It is not acting. Only through capital investment can we get growth. Only through capital investment and profits can we get jobs. The key to this is the development and growth of the small business sector. The Government completely fails to understand this. It is beyond doubt, it is clear, that Labor wants to tax capital. Labor politicians want and advocate death duties. This would be calamitous for the family business in Australia, the strength of the small business sector. Labor fails to understand the importance of the small and medium sized family business in this country.

Labor proposes an inquiry into wealth. The Hawke Government's proposed inquiry into wealth is Labor's way of examining how to set up a structure to impose newer and higher taxes-the capital taxes, death taxes and wealth taxes I have mentioned. An inquiry into wealth, as proposed by the Government, will mean examining and establishing a mechanism for Labor's reintroduction of capital gains and death duties. Labor fails to understand that a capital gains tax does affect people's homes and businesses-their capacity to invest in the business sector. Death duties strike directly at family small businesses, at people who want to start businesses and at people who have worked hard to invest their savings in new businesses.

Labor fails to understand that the small family business is starved of capital for investment, that the private sector generally is starved of capital for investment. Labor fails to understand that the expansion of small business is the key to economic recovery in Australia today. Large business is under pressure. In large part it is shrinking. Small business lends itself to growth. I plead with the Government to put in place policies to create a climate for small business to grow, for investment to take place and for small business to generate profits so that profits and savings can be reinvested by way of capital rather than talking down small business, which is what this Government is doing.

Let us look at the ALP's small business policies. Let us look at its pre- election promises. Labor promised to implement immediately an Australian small business program. We have not heard one single, solitary word about that since the Government came to office.

Mr Hodgman —Socialists.

Mr SHIPTON —They certainly are. They do not understand the private sector. Labor promised to allow full retention of profits. We have heard not a word of that. Labor promised to provide full quarterly provisional tax payments. There has been not a word about that in the Budget or anywhere else. Labor promised to extend the time permitted to pay sales tax. It would be a great relief to small businesses if that time could be extended from 21 days to 60 days. No, we have not heard a word of that from Labor. Labor promised to create real jobs in manufacturing. Since this Government came to office we have seen a continual fall off and retrenchment in the manufacturing sector. Labor has not lived up to one of its promises towards small business, and that is reprehensible.

Let us look at the Budget and small business. The Budget expands the public sector. It is a big government Budget. It squeezes private enterprise. It is a big government Budget and it hits the competitiveness of Australian industry. It hits small business hardest of all. Cost increases in that Budget are to be perpetuated by regular indexation of excises. Let us look at what it has done to petroleum and diesel costs. The Budget put up the cost of that valuable raw material that is used at every level of production, distribution and servicing in Australian industry today. Those excise increases in the Budget fuel inflation. Transport costs, which are vital to business and delivery of goods in Australia, have been put up by the Budget and will continue to be increased automatically. Transport costs are up for every Australian business. The Budget virtually wipes out the fortified wine producing industry that we have talked about in this House on previous occasions. The Budget must be condemned; the ALP must be condemned. Every major small business organisation has criticised the Government. The Council of Small Business Organisations of Australia stated in its recent newsletter that the Federal Budget snubs small business.

I will look at the combination of the mini-Budget and the Budget and what has been done to the small business sector. Let us look at all the actions which are detrimental to small and medium size business, to family businesses in Australia . What do the lump sum superannuation proposals do? They stop people investing in small business. They mean that employees of small businesses will be taxed because they rely on lump sum schemes. The Government has failed to understand the small business sector and how small business works. Through the lump sum proposals the Government has created a new capital gains tax that discriminates against small business in particular. Wage earners are exempt from redundancy payments but similar payments to the owners of small business are not. Members of the Labor Party and socialists do not understand the nature of small business .

The Government proposed an assets test for pensioners. It does not understand that pensioners' savings form an important part of the investment process. It does not understand the importance of savings and the accumulation of savings by institutions, life assurance companies, banks and investors. Those bodies gather small people's savings and lend them out in lump sums to businesses. The proposal to tax assets hits at and discriminates against pensioners and small businesses. Pensioners with existing businesses and investments in existing businesses may be forced to withdraw their capital. In future people who are retiring will be discouraged from investing in the small business sector.

The Government has introduced the withholding and prescribed payments tax system. It is a complete administrative shambles. It shows the complete and utter failure of the Government to understand how business works and to understand how business is being choked and throttled in Australia today. The Government, rather than getting government off the back of business, is putting more government on the back of business every day. The Government has abolished the dividend rebate for individuals. It has failed to understand that one of the good things that should be done is the encouragement of people on the shop floor to enjoy ownership and have shares in the company in which they work. The abolition of the dividend rebate completely negates this.

Let us look at the Government's wages policy. The 4.3 per cent wage increase is disastrous for small business. Small business cannot afford it. Small business has to absorb the over award payments in Australia today. The accord that the Government is a party to with the union movement hits hard at small business because it does not allow market forces to operate and to fix wage levels according to the capacity of small and medium business in Australia to pay. The continuation of the former Government's wages pause would have helped small business. It would have been the best thing for small business in the wages policy area today. The wages policy of the Government is disastrous for small and medium size business enterprises in Australia.

I turn now to government support for the job protection case that the Australian Council of Trade Unions is bringing forward. The Government has approved generally the ACTU's job protection case in the Australian Conciliation and Arbitration Commission. We want to know where the Government stands on that case. It supported the case going forward. Does it support the case in toto? That job protection case has the potential to wipe out nearly every small business in Australia. The claim by the unions before the Conciliation and Arbitration Commission provides for enormously stringent terms and conditions for employers. It provides for three months notice to be given, four weeks pay, an additional two weeks' pay for completed years of service, relocation expenses , et cetera. What is the Government's attitude and policy towards the ACTU's job protection case? The combination of its wages policy and its potential policy in respect of the job protection case-it is supporting the job protection case which is going forward-is disastrous for small business in Australia.

On other occasions I have advocated in this place that 1984 be the year of small business in Australia. The Council of Small Business Organisations has advocated it; it has written to the Government. I propose a year in which governments, politicians and bureaucrats listen to small business. They should understand its needs. It would be a year that would highlight the importance and significance of the small business sector in Australia. By concentration of effort it would be a year in which impetus would be given to the creation of capital, to profit making, to investment and to job creation. In the year of small business a program of action could be developed by the Government.

However, the Government has ignored my call; it has ignored the call of the Council of Small Business Organisations. I ask the Minister for Communications ( Mr Duffy) who is in the House today: What is the Government's attitude towards a year of small business in Australia in 1984? The Government has totally abdicated its policies on small business. The Government fails to understand the nature of profit. It fails to understand that profit is important to pay wages; that profit is important to pay dividends; that from dividends one gets savings and from savings one gets investment; and that wealth creation is the key to the survival of the free and private enterprise system as we know it in Australia. Unless there are policies in place to create profit and to accumulate wealth for investment in this country, it will not continue as a private enterprise economy .

This Government has forgotten the entrepreneur; it has forgotten how to encourage the entrepreneur; it has forgotten the self-employed; and it has forgotten the family business. The entrepreneur, the self-employed and the family business in Australia must be given a fair go. Because there is a crisis of capital investment and a crisis of investment confidence, what we need in this country today more than ever are particular policies to make the small business sector grow. That is the main area for job creation in this economy. If every small business in Australia could take on one more employee our unemployment problem would be helped greatly. We need policies to create a healthy, dynamic and growing small business sector. We need a climate for enterprise, for wealth creation, for profit, for innovation, for investment and for growth. This Government stands condemned for its failure to small business in Australia.