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Tuesday, 19 June 2012
Page: 7150

Mr BILLSON (Dunkley) (20:32): Minister, congratulations on your appointment. It is the fourth of your team that I have had the pleasure of working with. Congratulations on your elevation. Firstly, on the general state of the small business nation, if I could call it that. Dun and Bradstreet have identified a 48 per cent increase in small business insolvencies in the last 12 months. Worryingly, Minister, a 95 per cent reduction in small business start-ups, which is particularly concerning given there are small businesses not surviving in this environment and there are not the willing newcomers to carry through with what the economists would refer to as creative destruction. We are having the destruction and not quite the drive for enterprise and entrepreneurship to bring new participants into the marketplace. There are job losses of around 300,000 involved in small business. There is a diminishing share of the private sector workforce. There are 14,500 fewer employing small businesses. There is concern right across communities and right across the continent. Small business is the economy and it is in a bit of a funk. There is a feeling that it is has been driven into a ditch by the government and various government policies.

I was looking at your Lateline Business interview less than 24 hours before the Treasurer delivered his budget speech. Two particular things came out of that that were most interesting for me. You were asked about the census survey that showed that 92 per cent of small businesses do not think government policies are helping them. When asked to respond to that research finding you said, 'We have done some recent things already by announcing the cut in the small business company tax rate from 30 per cent to 29 per cent'. I found that quite a remarkable statement. You are on the Expenditure Review Committee, as I understand. The budget was apparently signed off around Easter. Was that just a mis-speak, an effort to present a small business initiative that had already gone to the chopping block? Was it an error, a decoy? I could not quite work out why you had made that statement, so I would like to understand what happened there. Were you not aware of your Expenditure Review Committee's work in that space? Was it an eleventh hour decision? I was told by Treasury that there were not any last minute changes yesterday. It must have been on the radar screen for a while. I—and I know many in the small business community—felt that it was a mighty unhelpful statement, and not in any way reflecting the true reality of the budget.

I noticed the member for Deakin then mailed out the same statement to all the business owners in his electorate. I found that quite remarkable, and his defence probably was 'I was relying on the minister'. This misinformation seems to be causing a great deal of concern. I would like your responses to that and on the issue about what the government is actually doing that might change that 92 per cent rate where small business do not think that the government has any policies that are helping them, and what your intentions are to turn that around.

Also, in the particular measures in the budget, and some confirmed in the budget, that have not got a lot of attention: the abolition of the entrepreneurs tax offset, a modest incentive to 400,000 of some of our smallest business of a range of structures. It is not just companies: sole traders and partnerships—those operating as corporates as well as through trusts—all had access to that. Now 400,000 of our smallest businesses will be paying higher rates of tax on their modest incomes. A measure that gave full benefit to incomes up to $50,000 and tapered out at $75,000 is hardly the big end of town.

I am very interested in how the process of renewing the Small Business Advisory Services is going. I have visited a number of BECs, and a number are aspiring to carry out some work in that area off a diminished budget—$40 million down to $27.5 million. Your answers through your department in Senate estimates suggested that more than 36 existing BECs were anticipating getting a piece of that action. How might that continuity be maintained, given that, as I understand it, the tender process has not even been approved to commence as yet. There is the area of late payments; there were some $550 million of late payments generating a $3,400 fine. Is that a fair implementation of the policy as it is described?

Finally, progress on the Small Business Commissioner: we are aware of the shingle, that there will be no new powers and that it will look something like the Office of the Chief Scientist, that the government did not speak to for many years. I would like to know how that progress is going with that appointment. (Time expired)