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Thursday, 18 November 1993
Page: 3138

Senator CHRIS EVANS —My question is directed to the Minister for Science and Small Business. I refer the minister to an article that appeared recently in the Bulletin entitled `Business turns a blind corner'. The author, businessman Mr John Gilmour, refers to his personal experience and concludes that small business is experiencing a boom. Would the minister comment on Mr Gilmour's observations, especially his assertion that the reduction in the corporate tax rate from 39 per cent to 33 per cent in the current year is almost a boom for many enterprises.

Senator SCHACHT —I am aware of the article written by Mr Gilmour in the Bulletin of late October. I also point out that Mr Gilmour is a member of the Small Business Council of Australia. In that article to which Senator Chris Evans refers, Mr Gilmour uses the description that small business is experiencing a boom. Those are his words; it is not a government description. He then goes on to give anecdotal evidence of his own small business as to why he believes the boom, as he calls it, is happening in small business in Australia, and I think it is very instructive.

  For example, Mr Gilmour said that he wanted some printing done but the printer said he was too busy to take the extra work; Mr Gilmour wanted some radio advertising done but he noticed that a couple of free spots for advertisers was no longer on offer. Other people in the small business area have confided to him—and this is in the article—that business trade at the moment is very good. I inform Senator Ian Macdonald that when Mr Gilmour asked a cabinet-maker—another small business person—to quote for a job, he was told that it would take at least three months. He asked: what is going on? Despite all the doom and the pessimism which most members of the opposition are only too happy to talk about all the time to talk the Australian economy down, Mr Gilmour asked why the boom was starting to occur.

  First of all, Mr Gilmour believes the official statistics are always one or two quarters behind what the real experience is. After discussions with his colleagues in small business, Mr Gilmour said the reason for this boom—and `boom' is the word he used, not what the government has used—is that costs are down sharply, wage costs are being contained, financing costs are collapsing as interest rates on borrowed funds are running at a third of the level of three years ago, occupancy costs are down and space is available for expansion, rentals are half those of 1989 and even tax is being reduced. The reduction in the corporate tax rate from 39 per cent to 33 per cent in the current year is almost the equivalent of a boom for many enterprises.

  So Mr Gilmour has identified a number of areas where small business is really starting to kick along. I think it ought to be taken as a matter of great interest by all members of the Senate. As we have said before, we recognise that small business will be leading this economy into new growth and creating new jobs and, for the rest of the decade, that is where the action will be in the economy. Unfortunately, most members opposite do not wish to recognise that. Whenever we talk about small business we get catcalls and hisses from the other side. I want to draw the attention of the members opposite to the article by Mr Gilmour in the Bulletin and, in particular, to his final conclusion in that article when he said:

When the taxation data for the year to June 1994 emerge . . . they will prove what many small businesses know already . . . there's a boom.