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Wednesday, 13 February 2013
Page: 1358

Mrs PRENTICE (Ryan) (18:12): I rise to speak on the Appropriation Bill (No. 3) 2012-13 and Appropriation Bill (No. 4) 2012-13. These two bills afford me the opportunity to speak on the general economic direction of our country and the gross incompetence that this Labor government has shown in managing the economy.

Firstly, with their Green partners, the Labor Party and the world's best Treasurer have managed to legislate a tax that raises almost no revenue. Instead of stealing $1 billion from miners over the first six months of this financial year to cover their budget black holes, the minerals resource rent tax raised only $126 million. Worse, the tax has cost the Australian tax office more than $50 million in administration, not to mention the increased compliance costs of businesses trying to deal with this complex, distorting, inefficient and costly tax. Quite simply, it is an absolute fiasco.

For the past 2½ years the coalition has been demanding that the Treasurer release the figures from the MRRT to the public for proper scrutiny. The response we received from a deeply embarrassed Treasurer, who knew the true extent of the costly consequences of his MRRT for the budget and for our economy, was weasel assertions that releasing information about the MRRT would be illegal.

The Treasurer claimed that releasing the information would be in breach of taxpayer confidential provisions for companies affected by the tax. The coalition simply did not accept this as an accurate explanation and, last week, the Senate ordered the tax commissioner to provide detail on how much revenue has been raised since 1 July, 2012. So last Friday the Treasurer backed down on his refusal to be transparent and, finally, publically released the detail.

On that day the Treasurer claimed:

The Government has always supported increased transparency in our tax system and we believe any revenue from the MRRT should be published …

If what the Treasurer says is true, the obvious question is: why, after 2½ years, after blocking every request from the coalition for more information on the original negotiations between himself, the Prime Minister and the big miners did he wait for the Senate to order him to release the MRRT revenue raised so far at a press conference?

The answer is that the Treasurer knew the tax commissioner would have to release the information, so he had to pretend that he was releasing the information. And not for one moment should we forget that mining companies have had to spend millions on compliance costs just to calculate that they do not have to pay the mining tax.

Let us look back at the history of Labor's shrinking MRRT. When the Prime Minister and the Treasurer first signed the MRRT heads of agreement, the tax was expected to raise $4 billion this financial year. In the most recent budget, it became $3 billion this financial year, and in the most recent Mid-Year Economic and Fiscal Outlook, MYEFO, it became just $2 billion. The problem with the MRRT failing to raise revenue is that the expenses which were supposed to flow from the mining tax revenue are not volatile and are not linked to that revenue; they have become a permanent part of the expenses ledger in our budget.

Some of these unfunded measures include the cost to the government of increasing the superannuation guarantee rate; increases to welfare for Australians facing increasing cost-of-living pressures; and the schoolkids bonus for parents of students, without any evidence required that the money is actually being spent on education. All these measures are permanent parts of government expenditure, costing the government billions of taxpayers' money each year, while the mining tax raises next to nothing. By comparison, there is no new funding to the tune of $120 billion for proposed policies such as the National Disability Insurance Scheme, the Gonski education recommendations, an increase in the refugee intake and tens of billions of dollars of spending in Defence.

We also recently learnt from the Australian Bureau of Statistics that, in the September quarter alone, electricity prices increased by 15.3 per cent. While the carbon tax is not to blame for the entirety of that increase, it demonstrates that the carbon tax has increased the financial strain for all Australian households. Consequently, a coalition government will rescind the world's only economy-wide carbon tax. It will be a difficult job. Labor is not a party that respects the mandate of an incoming government with an electoral victory. Since the introduction of the carbon tax, the Labor government has amended the legislation eight times, which shows that the government has lost control of the tax and is making ad hoc changes on the run. On the first day of government, a coalition Prime Minister will have draft legislation prepared, and the first piece of legislation to be debated in parliament will be the repeal of the carbon tax.

We must repeal the carbon tax because of its deleterious effect on small business alone. In recent years, small businesses have not had a federal government that listens to their concerns. Small businesses are the backbone of the local and national economy. In recent years, small businesses have been doing it tough, and the Labor government has rarely concerned itself with addressing the very important issues that small businesses raise. This is a government without a single minister or parliamentary secretary with small business experience. Earlier this week, at Senate additional estimates, the Prime Minister's own department revealed that the Prime Minister rarely concerns herself with small business issues. The first assistant secretary from the industry, infrastructure and environment division told the Senate Finance and Public Administration Legislation Committee:

Small business issues do not often come up in terms of issues that are before the Prime Minister or before the cabinet. I guess our focus of resource tends to focus on those issues which are before the Prime Minister or the cabinet.

Clearly this Labor-Greens government has absolutely no interest in addressing the real concerns of small business owners and managers, who employ nearly half the private sector in the country.

Since 2007, Australians have been slugged with Labor's carbon tax and mining tax and repeated broken promises on company tax and superannuation. Since 2007, successive Labor governments have increased an additional 20,900 regulations, while repealing only 104. They promised that they would follow a strict 'one in, one out' approach to the growth of regulation. Instead, for every one regulation removed, 200 regulations have been added. Through their actions, it is plain to see that the Labor government are absolutely committed to greater and greater regulation, more bureaucracy and increasing intrusion into business and into the marketplace. Not only have these decisions damaged Australia's investment attractiveness; they have also undermined confidence within our economy for consumers and small business.

That is why I am launching the Ryan small business survey, to hear the views of small businesses in Ryan about how I can work with the coalition to best improve business conditions. Small businesses in Ryan have told me how concerned they are about their businesses and how they have suffered, particularly because consumers are facing increasing cost-of-living pressures and are spending less across the board. While businesses have had to spend thousands of dollars on compliance and rising import costs, consumers are tightening their spending because of major price hikes in energy, childcare and private health insurance costs. One of my priorities as the member for Ryan is to help build a strong economy through lower taxes, more efficient government and more productive businesses that will deliver more jobs, higher wages and better services for families in Ryan.

During the Mid-Year Economic and Fiscal Outlook process last year, Labor and their treasurer further demonstrated that they do not understand, nor do they care about, small business. The Treasurer announced that the annual regulatory levy on self-managed super funds—regardless of the level of contributions or the account balance—would increase by 36 per cent, supposed to raise an additional $320 million over four years and affecting more than 480,000 self-managed superannuation funds across the country.

The government announced that it would spend $390 million to continue the crackdown by the Australian Taxation Office on small businesses—part of their desperate attempt to find more cash to fill their $120 billion black hole. This comes at a time when small businesses are doing it tough, which is reflected in many alarming statistics. Small business insolvencies instigated by the tax office are up 116 per cent. The Inspector-General of Taxation has warned that more than 5,800 small businesses targeted by the ATO paid their default tax assessments simply because they could not afford to fight or correct the ATO. The Australian Chamber of Commerce and Industry National Red Tape Survey found that 73 per cent of businesses are reporting an increase in regulation compliance costs over the past two years. According to Dun & Bradstreet's most recent Business Expectations Survey, businesses expect that both sales and selling prices will drop sharply in the March 2013 quarter. The government also cut the support for the Adult Australian Apprentices initiative, which will hurt not just small businesses but also older Australians. These policies have had a huge impact on the Australian economy, with our global competitiveness suffering greatly according to the most recent World Economic Forum's Global Competitiveness Index. Australia's performance in terms of regulation has dropped 28 places since 2007-08 from 68th in the world to 96th. In pay and productivity, we have dropped from 40th in the world to 80th. In the extent and effect of taxation, our performance has dropped from 75th in 2007-08 to now 103rd in 2012-13.

In response to these alarming figures, the coalition has set out to repeal two of the biggest tax increases. There have been 27 new or increased taxes since the Labor Party came to power. We will rescind both the mining and carbon taxes. It will be an extremely tough job trying to return fiscal sanity to the budget and to the Australian economy. The government is now spending an extra $100 billion per year more than when the Howard government left office. The shadow treasurer, the member for North Sydney, and other coalition colleagues will need to find real savings and cut expenditure. It will be an extremely difficult job, but the coalition is up to the task. The coalition plans to achieve real reform in the area of business and small business.

In overarching terms, the federal coalition has important plans for the economy: (1) we will live within our means, (2) we will reduce taxation including abolishing the carbon and mining taxes, (3) we will grow the economic pie with a six-point productivity plan, and (4) we will engage more with our region. Under these four pillars, we will support small business. The coalition will relieve the red tape burden from Australia's small businesses by giving them the option to remit the compulsory superannuation payments made on behalf of workers directly to the ATO. We have committed to reducing the regulatory costs to all businesses by at least $1 billion a year, and to not changing current laws relating to the treatment of personal services income. We have committed to defending family enterprise and the self-employed from attacks by the ATO and the Fair Work Ombudsman, by not changing the existing personal services income tax laws. And we will conduct the first root-and-branch review of competition laws and deliver more competitive markets. Deregulation reform is part of the coalition's plan to free up Australia's businesses so that they can create more jobs and opportunities for all Australians. It is also part of our plan to help reduce the administrative burden on Australian community not-for-profit organisations, and allow them to focus more on their important work of strengthening local communities. The Productivity Commission has estimated that reducing unnecessary red tape could generate as much as $12 billion in extra GDP per year. Therefore the coalition is absolutely committed to reducing annual red tape by at least $1 billion for individuals, small businesses and society as a whole. Ultimately cutting red tape and improving conditions for small businesses are not just about improving the economy and providing the opportunity for growth. For a small business person red tape means less time with customers, less time earning money and, more importantly, less time with their families. Therefore it must be a priority of government to get out of the way, to ease conditions and regulations on small business so that businesses can grow, so they can get on with their job and encourage employment. The coalition will get small business growing again and creating more jobs by reducing business costs, by cutting taxes and by cutting red tape by $1 billion a year. We will restore hope, reward and opportunity for small businesses across Ryan and across the country. The coalition plan is for real action for all Australians.