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Friday, 1 September 1989
Page: 819


Senator BOSWELL(2.01) -The Opposition has raised as a matter of public importance:

The damage caused to Australian small business by the anti-business policies of the Hawke Government.

We have done this because over the past seven years we have seen this Government completely ignore the importance of small business. It is becoming increasingly obvious to us that the Government is becoming more and more intolerant to the small business community as a whole. Only yesterday we saw an attack-I can only describe it as a vendetta-on the pharmacies of Australia. We have seen taxes increase by 105 per cent since the Federal election held seven years ago. We have seen sales tax increase and we have seen the industrial relations policies of the Government impacting on small business. In all, the Government's policies have been a total disaster.

That is probably understandable. I went to the Parliamentary Library today to find out details of the Australian Labor Party (ALP) platform on small business. The ALP believes small business is worthy of three paragraphs in its platform. That is all the response it could muster to small business. It reads in part:

Labor recognises the importance of maintaining a strong, viable and diverse small business sector. It accounts for 95% of all businesses in Australia, over 50% of private sector employment and 40% of value-added.

That is rhetoric; it does not do much for small business. When Senator Button responded to the Coles-Myer amalgamation which was to give those two companies tremendous market clout, he said that it was not in the best interests of Australian commerce. That is all Senator Button did regarding that amalgamation. The third point in the Labor platform on small business reads:

Improve the co-ordination between business regulatory agencies to minimise the administrative complexity and cost for industry of government regulations and procedures, particularly for small businesses.

The total response to more than 750,000 small businesses in Australia comprises three paragraphs of Labor Party policy. The small business sector employs 52 per cent of the private sector employees. There are over 50,000 small manufacturers and over 80,000 small businesses involved in providing services. These businesses are the major source of tax collections-sales tax, pay as you earn tax and child support payments.

I believe the Government is treating the small business area as a means through which to raise tax revenue. The Government is not giving sufficient recognition to the small business sector. Small business does not have the influence with this Government consistent with its importance. Apart from one lone voice on the Economic Planning Advisory Council there is very little representation on any Government instrumentality, council or organisation that represents the voice of small business. Big business is represented by the Business Council of Australia and the Confederation of Australian Industry. But the voice of small business is not very often heard. Apart from Peter Boyle, Director of the Australian Small Business Association, and Rob Bastian, from the Council of Small Business Organisations of Australia, there are very few organisations that represent this terribly important sector-small business. That needs to be remedied because the small business voice is not coming through to this Government. I want to refer to the attack on the pharmacies.


Senator Stone —And the attack on the tourism industry.


Senator BOSWELL —And the tourism industry. I will move through some of the other areas in which this Government has been totally negligent in its response to small business. As I said in my opening remarks, this Government seems to have some sort of vendetta against the pharmacists and the chemists of Australia. This vendetta has been running since January 1988, when the Government lowered the wholesale margin by 5 per cent for the chemists and the pharmacists.

In August 1988, the Government doubled the number of items per prescription and effectively halved the handling fee. Some expensive but essential drugs were then put on a hit list and doctors had to seek approval from the Department of Community Services and Health before prescribing the drugs and allowing patients access to these drugs. Due to public pressure and extensive complaints by a number of groups, particularly the pensioners, this was reversed. In January 1989 the Government attempted to further reduce the prescription fee to below $2.64. That has put pressure on the pharmacists.

No-one could have expected that the Pharmaceutical Benefits Remuneration Tribunal's report would have been accepted by the Government, but the Government accepted the recommendations to reduce the pharmacists' dispensing payments by $1.05 per item and abolish the pharmacists' 25 per cent mark-up. I do not know how any government can support a recommendation such as that. How can any business work without some type of mark-up? There are 5,000 chemists in Australia and, on present indications, about 1,000 of those would become bankrupt were the Government to implement those recommendations.

What is the Minister for Science, Customs and Small Business, Barry Jones, doing about that? I recognise Barry Jones's capabilities in many areas. He may be the Minister for Science, but he certainly has no expertise in small business. I would have thought that the Australian Labor Party could have come up with someone that could have given some representation to small business. We never hear Barry Jones speaking up on how government legislation will affect small business, what it will do to small business and whether small business has a capacity to pay. In effect, the Labor Party does not have anyone within its ranks that can truly represent small business. I do not believe there is one person in the Labor Party that has ever been in small business. I could be corrected but, as I look around the Senate today-there are not too many people here from the Labor side; there are many National Party members and many Liberal Party members-there is not one person on the other side who could represent small business. There is no-one here to listen to the pleadings of small business. The Minister, Mr Jones, should be more responsible for the actions affecting small business that this Government has taken.

What has small business had to put up with? We have seen cripplingly high interest rates. They are supposed to slow the economy down, but as Senator Stone quite correctly pointed out, it is a very vague and hollow way to slow down an economy because once it slows down where does one go from there? The present high interest rates are impacting directly on the building industry. Retail sales figures and figures for new car registrations have shown that consumer demand is still strong. But there is plenty of evidence to suggest that the present high interest rates are bankrupting small businesses. The Hawke Government has promised consistently and constantly that interest rates will come down. Interest rates for housing loans are now 18 per cent. In the small business community they can be as high as 23 per cent. What small business can afford to pay 23 per cent interest rates? Very few small businesses have the capacity to earn 23 per cent profit, let alone pay interest rates of 23 per cent. A string of bankruptcies is occurring throughout Australia.


Senator Stone —The Minister has just put out a video on bankruptcy to advise people how to go about their business.


Senator BOSWELL —Senator Stone says that the Government's answer to bankruptcies is to put out a video to handle the people who have gone bankrupt.


Senator Chaney —Do-it-yourself bankruptcy.


Senator BOSWELL —It is a do-it-yourself bankruptcy kit. I would prefer to look at the symptoms rather than the cause, but the bankruptcy video is an example of the completely convoluted way the Labor Party handles these types of issues. In 1982-83, there were 6,000 bankruptcies in Australia. That is not a good figure; it is not a figure to be proud of. In the Government's six years in office, the number of bankruptcies has gone up by 56 per cent. The major factor has been high interest rates.


Senator Stone —Wait until you see this year's.


Senator BOSWELL —This year's figures will be a total disaster. Of course, when one sits in this place and looks at the frontbench one sees the Minister for Justice, Senator Tate, who is a lawyer; Senator Cooney, who is a barrister; and trade union officials. They do not know what it does to people to have their businesses crash around them. The Government does not know what it does to their families, and their self-confidence. The Government is leaving a trail of disasters around Australia with its high interest rates and it does not care about the destruction it is causing: families splitting up, the destruction of people's self-confidence. Those are the sorts of things that one must consider.

I do not think that the Minister for Science, Customs and Small Business, Barry Jones, understands it. I am certain that no-one in the Senate understands the feelings of small business owners. Small business people get out there, on a very low capital base, and try to achieve. They are Australia's greatest battlers. I know; I have been one of them. For 16 years I worked my own small business. Under Labor, if one wants a small business one buys a big business and watches it get smaller. That is the only thing the Government can say it knows about small business-buy a big business and under Labor it will get smaller. The alternative to that is that one goes bankrupt, as the figures have indicated.


Senator Patterson —And you get the video.


Senator BOSWELL —Of course, there is the great light at the end of the tunnel, the light on the hill. When one goes bankrupt one applies to the Government and gets its bankruptcy video. That gives you great satisfaction of knowing that the Government is really looking after your interests.


Senator Chaney —One of your ideas, Tatey?


Senator BOSWELL —Whose idea was that?


Senator Stone —It was Senator Bolkus's idea.


Senator BOSWELL —It sounds like one of Senator Bolkus's ideas. Madam Acting Deputy President, I know that you understand small business because your husband was involved in small business before he entered politics. Let us consider the progressive taxation take from 1983 to 1990. This Government has extracted-pulled out like teeth-a 105 per cent tax increase. Total Commonwealth tax revenue has increased by 105 per cent. Total individual tax has gone up by 107 per cent. The Medicare levy has gone up; company tax has gone up by 162 per cent; sales tax has gone up by 156 per cent; Customs import duty has gone up by 73.9 per cent; and petroleum excise has gone up by 186.3 per cent. Yet this Government tells us that it has a Budget surplus. It claims that it is a wonderful economic manager and that it has a $9 billion surplus. Of course, it will have a $9 billion Budget surplus if it increases everything from sales tax and fuel excise to Customs duty and the Medicare levy. Every tax has increased, and the major impact has been felt by small business. The Government does not realise that when it increases petroleum excise by 186.3 per cent it is the small business sales representatives that pay most of it, as they travel in their cars to sell their products. These taxes are impacting on small business. It is no wonder that bankruptcies have increased by 56 per cent. I say to the Minister for Justice, who is a barrister and solicitor-and probably a very good one-that his Government needs to understand what it is doing to small business.

This Government has introduced a capital gains tax which has impacted on small businesses. Many small business want to expand by buying out other businesses. Farmers may wish to move from a smaller property to a bigger property. They have to pay a capital gains tax every time there is a roll-over. In the past, many small businesses, particularly newsagents, could afford to take a holiday only after they had sold their business. Many small business people cannot even afford to do that any more because of the capital gains tax.

This Government's tax regime has been a disaster for all small businesses. The capital gains tax, fringe benefits tax and other taxes have impacted heavily on small business. Small businesses account for much of Australia's wealth. They provide many jobs and much of the tax revenue, yet they do not receive a fair go from this Government. This Government treats the small business sector as an area from which to gather tax. This Government thinks in terms of how much sales tax it can collect from that sector, how much pay as you earn tax or capital gains tax small businesses can pay. Small businesses are the greatest milch cows that this Government has, yet it does not give small businesses one voice. It does not give small business any consideration. This Government does not have a Minister who can adequately represent the interest of small business in Cabinet, who can look at the impact of Government policy on small business. This Government's total contribution to the small business area comprises three paragraphs in its policy document. It is a shocking indictment of any government that an area which provides 52 per cent of employment, and probably most of Australia's taxation revenue, receives three paragraphs in the Australian Labor Party's policy document.

It is not good enough for the small business community. It is not good enough for Australia. I hope that this Government will look at the problem in its next six months in office, although I do not suppose there is much time left for it to do anything for small business. I suppose that the message that I can give to small business is, `Hang on by your fingernails. Help is coming. The coalition will be in government in six months time'.