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Wednesday, 12 September 1984
Page: 1144

Mr SHIPTON(4.50) —An outstanding feature of these Estimates and the Budget is the Government's failure to realise the importance of small and medium sized enterprises in the Australian economy. The Government fails in the Budget to recognise that small business is the big employer in Australia. There are some 750,000 enterprises in Australia, 93 per cent of them employing fewer than 10 people-that is, 700,000 firms in Australia out of 750,000 are generally regarded as small businesses. This Government in the Budget has totally ignored them. The Treasurer (Mr Keating) did not even mention the importance of small business to the economy in the Budget Speech. The Department of Industry and Commerce estimates refer to an initiative, an upgrading of the small business program, and one sees the figure of $200,000. That is a charade because last year's estimate was $100,000.

All that is said in these estimates about the importance of small and medium sized enterprises in the economy lies in the reference to a small business program. That is very worthy, but I would have liked the Government in the Budget to have given attention to its pre-election promises. Some 18 months after coming to office, none of the Australian Labor Party's pre-election promises in the area of taxation relief for small business has been put into effect. It is worth remembering that before the election Labor promised full retention of profits to small companies where the funds were used for genuine business purposes. Labor promised small business the option of provisional tax to be paid in quarterly instalments. Labor also promised small business that it would amend the Sales Tax Act to allow a full month for remittance of tax owing, extending it from 21 to 30 days. Another pre-election promise not honoured in this Budget was to exempt from tax industrial research and development grants to small and medium sized enterprises.

In two Budgets and one mini-Budget none of those tax promises to small business has been honoured. The importance of small and medium sized enterprise, which is at the heart of the Australian economy, has been ignored in these Budget estimates. Small business is not looking for handouts or for subsidies. It is looking for the opportunity for a fair go. It is looking for room to breathe and to operate. A large deficit in this Budget is a death blow to entrepreneurship in this country. It is well accepted that, because of the former Government's wages policy, the United States recovery and the breaking of the drought, there is some recovery occurring in the Australian economy and that this is the time to make a good harvest and not to blow it. In this Budget by expanding the deficit the Government has ruined the opportunity for small and medium sized enterprises throughout this year and next year to grow and to invest. The Government has blown it in this Budget.

The Government does not realise that small and medium sized enterprises are the key to economic growth and to the health and wealth of the economy. This is a big-union government-and big unions are not concerned about small firms. This Government, through the prices and wages accord, has locked small business out of its thinking and out of its Budget. The fact that the Treasurer did not once mention small business in the Budget Speech makes me realise, as I hope Australia will realise, that the needs and requirements, the proper climate and environment for small business to grow and prosper in this country were not even taken into account in the Cabinet room. In the Cabinet room the Australian Council of Trade Unions, the union movement, told the Government what it ought to do. Small business, I bet, was not mentioned-and that comes through in the fact its importance was not once mentioned in the Budget Speech. That is outrageous.

I believe that this Government has a hit list for small business. The wine tax which was imposed in the Budget hits the smaller firm hardest of all. I refer to the small family winery which is so characteristic and typical of the industry and which produces the higher quality and higher priced wine. That type of business is hit hardest of all. The same is happening in this Budget as occurred in the last Budget. In the Cabinet process in consulting the trade unions as to what the Budget should contain, no reference is made to the importance of small business. It is not understood. Therefore, last year the tax on fortified wine was imposed and struck at the smaller family wine firm. This year that attitude is displayed in the composition of a wine tax.

If one examines what the Government has done in the Budget, the previous Budget and the mini-Budget one sees that the Government by its hit list has attacked small business. For example, the indexation of excises is a Budget item, with six-monthly automatic cost increases in excises on fuel, liquor and cigarettes. I have already mentioned the tax on fortified wines. There was a broken sales tax election promise in respect of retreaded tyres, which hits the truckies as well as the bus and coach operators-many small businesses. The new tax on superannuation lump sums fails to appreciate the importance of investment in small business by people retiring. The present Government does not appreciate that it needs to consider the effect of every measure it brings in in creating the right healthy economic climate for a prosperous small business sector. The Government amended the tax status of section 23F superannuation funds-again, an anti-investment move affecting investment in small business. Again, the assets test discourages people who retire from having investments in small businesses. The Government also abolished the dividend rebate-a rebate which encouraged private ownership of shares by employees in firms, a trend one would have thought this Government would have sought to encourage.

One of the most outrageous things done by the present Government is to support the jobs protection case of the Australian Council of Trade Unions in the Australian Conciliation and Arbitration Commission. This Government, together with all the State Labor governments, supported the ACTU's application in the job protection case. This has imposed an enormous burden on every small and medium sized enterprise as well as every large enterprise in Australia. Every firm must put aside large sums of money for redundancy payments. In fact, the value of many firms is wiped out by this decision of the Arbitration Commission, wholeheartedly supported by this Government.

The decision will choke many small businesses. Furthermore, it will reduce the opportunity of those small businesses to employ people at this time of high unemployment. It will also choke any economic recovery. The job protection decision is a positive disincentive to small and medium sized firms to take on more employees. There will be great unemployment next year. The opportunities for next year's school leavers will be hit very hard by that decision. Firms will not take on, and are discouraged from taking on, new employees because of the amount they have to set aside in their books for redundancy payments.

I see that the Minister Assisting the Minister for Industry and Commerce (Mr John Brown) is in the House to listen to the debate and to hear what this Government has not done for small business. The Minister is always asking about our small business policy. I say to the Minister that the Opposition is developing the most comprehensive and sensitive small business policy in the history of this country. We have gone out and consulted small business. The Labor Government has ignored small business, the Treasurer has insulted small business publicly and every small business organisation in Australia-or every one that I have seen-has condemned this Budget. As part of the consultative process the Opposition held a successful national small business conference to provide input into its policy and to create public awareness. I hoped that the Minister had read some of the Press comments.

Mr John Brown —Yes, we did.

Mr SHIPTON —Then I wish he had taken some notice of them. He does not even have the influence to get the Treasurer to mention the words 'small business' in the Budget. The honourable member gets up in the House and says that he is a successful small businessman-successful under a Liberal administration, I might point out. I am glad that the honourable member was successful. But why does not the Minister go into the Cabinet room and get the Government to honour some of its taxation promises to small business? Small business would have liked to see even one or two such promises brought to fruition, but none of the Government's taxation promises to small business have been honoured in the Budget. That is an outrage. I ask the Minister to do something about it.