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Tuesday, 18 September 2001
Page: 30874

Mr FITZGIBBON (5:27 PM) —Last sitting fortnight I was 15 minutes into a 20-minute contribution on the Bankruptcy Legislation Amendment Bill 2001. Members of the House will recall that the honourable member for Barton, the shadow Attorney-General, had moved a second reading amendment highlighting the government's failure to introduce the GST in a sensible and practical way that would be acceptable to the small business community—thereby significantly forcing up small business bankruptcies in this country. I understand that the member for Barton may also be moving some amendments in the consideration in detail stage of this bill.

In the short time available to me, I should say that it is in a sense fortuitous that the House did not get the opportunity to complete debate on this bill last time we were in session, because much has changed in the Australian economy in the last two weeks, in particular with respect to the small business sector. The first and most obvious change is the tragic collapse of the Ansett airline company. The second change is that prices in the US will have ramifications not only in human terms but also in economic terms. Those economic ramifications will reverberate right around the globe, including here in Australia, where they will flow on to the small business sector. That will require a response from the government, particularly in the tourism sector, 85 per cent of which is made up of small businesses.

Another thing that has occurred since this bill was last debated is the release of a report only this morning by CPA Australia. The CPA tells us that, as a result of the GST, cash flow has significantly declined for small businesses in the last 12 months. You do not have to hold a masters of business administration to understand that cash flow is a critical issue for small business and that, without that sort of liquidity, small businesses cannot survive.

The GST has starved small businesses of cash flow. It has done so in a number of ways, including the fact that small firms have been forced to absorb the price impact of the GST. There are two reasons for this. The first is that the government of the day has been waving a big stick at them, threatening fines of up to $10 million for those who dared to seek to capitalise on the new GST system. So many small businesses took a cautious approach and, rather than run the risk of a fine after action commenced by the ACCC, decided it was safer to absorb the price impact. The second reason is that the GST, as every member of this House well knows, falls most heavily on small firms. The compliance cost burden is of a much greater proportion for a small firm than it is for a large firm.

The CPA survey has confirmed for us today what we have known for some time now—that is, the GST has bitten well into small business cash flow. As the Dun and Bradstreet survey which I made reference to during the last sitting fortnight when this debate commenced indicated quite clearly, that cash flow crisis has had an impact on small firms and has led to a rise in bankruptcies. It is fortuitous that the debate on this bill was not completed in the last sitting fortnight, because we have had the opportunity to gather more evidence that the GST has been a significant issue for small business with respect to cash flow, which has caused a rise in small business bankruptcies in this country. The other thing that has occurred since the last debate is the release of a report called Business priorities 2001 released by Australian Business Ltd, who I understand are in Canberra today, tonight and maybe tomorrow. They point out what the small business minister's leaked cabinet submission pointed out: that the GST is still biting in the Australian community and that much more needs to be done.

I want to reaffirm the Labor Party's commitment on this issue. As I said, there is no shortage of evidence that the GST has bitten within the small business community—not all small businesses; I am always happy to concede that. I have always said that the impact will fall unevenly across small firms, but the issues are out there and the opposition does not accept for one moment that more cannot be done to ease the compliance cost burden on small business. As far as roll-back is concerned, for small business roll-back means rolling back that compliance cost burden and the complexity as it falls upon small firms. It is time that the Minister for Small Business stopped apologising to small business people and started to talk about ways of addressing that issue, as he did in his leaked submission. However, in the same submission he failed to put forward any initiatives whatsoever to address those issues.

This is a crisis for small business in the tourism sector, particularly for those in the regions. Ansett had about 64 per cent of market share in the airline industry in regional Australia, so a real void has opened up there and a real threat exists for the tourism sector in regional Australia. I should mention the fact that the Tourism Task Force is having an industry leaders conference in Canberra in this building tomorrow, and I welcome the representatives attending that conference. Let us hope that throughout the day the government will show a preparedness to talk to the industry about the enormous challenges facing the sector. They include not only the GST itself but also the fall in the Australian dollar and what that has done to the purchasing power of the Australian Tourist Commission, new and growing international competition, the very tragic crisis in the US and now the demise of Ansett.

I take this opportunity, as I did not have an opportunity in the condolence debate moved by the Prime Minister, to extend my very sincere sympathy to the families and friends of all those who have lost their lives in that great tragedy and to all of those who are sitting at home or in the workplace still awaiting news of the fate of their families and friends.