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Thursday, 27 March 1980
Page: 1115


Senator RYAN (Australian Capital Territory) - The Opposition does not oppose the Pay-roll Tax (Territories) Assessment Amendment Bill 1 980. As far as it goes, it is a welcome measure because it will give some relief to small businesses in the Australian Capital Territory. The Bill will raise the level of the general exemptions from payroll tax applicable in the Australian Capital Territory. The exemption, in fact, is to be raised from $66,000 to $72,000 per annum. The higher level will apply from 1 January 1980, thus providing an exemption for 1 979-80 of $69,000; that is, on a full year basis.

As I said, this is a small measure to ameliorate the plight of small business in the Australian Capital Territory, and, for that reason, it is not opposed by the Federal Opposition. However, I must point out that the measure really allows for only roughly the inflation rate to be applied to the payroll tax exemption level, and in that sense it does not really provide a new gift to small employers in the Australian Capital Territory but simply keeps their situation much as it has been. Every time there is an amendment made to payroll tax legislation, that amendment seems to take about six months to filter through to the Australian Capital Territory. Employers in the Australian Capital Territory are lagging behind employers in the States with respect to adjustments in this regard.

The debate on this Bill, however, gives me the opportunity to draw the attention of the Senate to the plight of small business in the Australian Capital Territory. It is a plight which is in no serious way ameliorated by the legislation before us. Small business in the Australian Capital Territory is in a very poor state indeed. Many small businesses have closed during the period of the Fraser Government. More will be forced out of business, and many are operating simply by employing members of the family in order to keep a roof over their heads.


Senator Rae - Plenty of them closed during the previous Government's period too.


Senator RYAN -If Senator Raewould like to check the figures, which I do not have with me for the purposes of this debate, he will find that those relating to closures of small businesses in the Australian Capital Territory have increased dramatically since the election of the Fraser Government, although, of course, there were problems beforehand.


Senator Cavanagh - They have, Australiawide.


Senator Rae - I did not mean to be political; it is simply a continuing situation.


Senator RYAN - It is a continuing situation and it is a worsening situation. As Senator Cavanagh interjects, there is a serious plight facing small business Australia-wide. I agree that there is. But what concerns me as a senator for the Australian Capital Territory is that the situation here is directly the creation of the Fraser Government. There is no State government here which can take the blame for failing to support small business. There is no local government with powers that can bring income into the way of small business. We have a situation which is the direct responsibility of the Federal Government. In that sense, the Federal Government must accept directly the criticisms coming from the small business sector, and ought to take steps to do something about it.

I suggest- it is appropriate to mention this in this debate- that there is a case for the total abolition of payroll tax in the Australian Capital Territory. The view I hold has been expressed in editorial columns of the Canberra Times. I understand that Senator Knight is participating in this debate, so I would like to draw his attention to what was said in the editorial of the Canberra Times on 1 7 March this year. I would be interested to hear his response to it. The Canberra Times points out that there is a case for the complete abolition of payroll tax in the Australian Capital Territory, and that a strong attack can be mounted for abolition of the tax across Australia on both employment and antiinflationary grounds. The editorial states:

Back in 1970-71 when the Federal Government handed the tax over to the States it was generating about $300 million a year. In 1979-80 it is expected to yield $1,700 million. In the same period in the ACT revenue from the tax probably has doubled, like the rate which now stands at 5 per cent a year, in spite of exemptions, and this year is estimated to yield $ 1 7 million to the Government, $ I million more than it did last year. That is $17 million that could be left in the Canberra economy at a cost of less than $17 million to the revenue. To the extent that it improves profitability it will increase company income tax revenue; to the extent it is paid out in dividends it will be taxed again; to the extent that it is used to employ people it would be partially recouped in the form of personal income taxation and a lower unemployment benefit payout in the ACT region.

Not all of the $17 million would be spent on increased wages, but an examination of payroll-tax returns published by the Commissioner for Taxation in 1 977-78 suggests that a substantial part of it could be: something like 1 ,600 returns a month were made that year, by far the majority of them from service industry such as the wholesale and retail trade; the finance, insurance, real estate and business service groups; the transport group; and the restaurant and hotel group. These, incidentally, are the industries which tend to recruit most heavily among the young. The proposal warrants serious consideration both by the Federal Government and the local business community including, of course, Queanbeyan . . .

It goes on to say that the situation in Queanbeyan is the responsibility of the Wran Government in New South Wales. I endorse the suggestions made in the Canberra Times editorial, and I would like to see some sort of positive reaction by the Government to these suggestions if the Government is seriously concerned about the plight of small business in the Australian Capital Territory.

The Prime Minister (Mr Malcolm Fraser), I might point out, has recently been attracting a lot of media attention to himself by championing the cause of small business on a national level. He has taken up, with a great deal of strong rhetoric, the case of Mr Leon Laidely, who has been characterised by the Prime Minister and by some parts of the media as a small businessman who is the ham in the sandwich between the big oil companies and the big unions. If the Prime Minister is serious- I must admit I doubt it- about his interest in the cause of small business, he need only look at the situation prevailing in the Australian Capital Territory.

Why is it that small business is having such a bad time in the Australian Capital Territory? There are a number of reasons. One of the reasons is the exploitation of small business by big business. The particular way in which small business is exploited by big business in the Australian Capital Territory is by way of rentals. Most small business premises in the Australian Capital Territory are owned and operated by big business, and big business has shown itself to be a very severe and demanding landlord indeed. In many cases where small business people are being required to pay harsh and unconscionable rent increases- often they simply cannot afford to pay- they have shut up shop and moved out. This happens day in and day out in the Australian Capital Territory. Honourable senators need only visit Civic Centre or the Belconnen Mall or Woden Valley retailing centres, not to mention the smaller suburban retailing centres, to see that what I am saying is quite factual.

A particular incident which is being reported in the local media at the moment involves a small businessman, Mr Gus Petersilka, who has rented and operated a coffee shop in Civic Centre and who was gaoled today because of his stand against the rent increases imposed by big business. What we need in the Australian Capital Territory is some sort of fair rent legislation which will allow the owners of properties to increase the rents in a way which is fair and which will prevent harsh and unconscionable rent increases being imposed on small operators who have no recourse to proper appeal procedures.

That is one of the major problems of small business in the Australian Capital Territory. Another, of course, stems from the planning problems of the Australian Capital Territory. Until the election of the Fraser Government, Canberra was a growth centre. In fact it is the most successful growth centre in Australia's history. On the basis of growth predictions, the National Capital Development Commission, the planning body for the Australian Capital Territory, had planned for an expansion of retailing in the Australian Capital Territory. Now that we have been faced with a no-growth or a restriction of growth policy by the Fraser Government, there is a drastic oversupply of retailing space in the Australian Capital Territory.


Senator Rae - Rational growth would be a better word, wouldn 't it?


Senator RYAN - It is not rational growth, as Senator Rae has interjected. I do not think it is rational growth when one has a drastic oversupply of retailing, when there are schools which do not have an adequate student population to sustain their services, when there are large areas of serviced land but no case now for going ahead and building housing there. This is not a rational picture. It certainly is not rational in terms of the expectations of small business in the Australian Capital Territory. We have an irrational situation. Some parts of the Australian Capital Territory, as I have said, are desperately oversupplied with retailing. We have other parts where there is still a need for services such as pharmacists and so on. It is not a rational picture and it will not be a rational picture until the Government can give us some real indication of sustainable growth for the future,


Senator Rae - Is the property market not indicating at the moment that, after a period of lull, it is now picking up on a stabilised basis?


Senator RYAN - There has been an improvement in the real estate market in the last six months. There certainly has been an improvement but it followed a real crash in the market. People were being forced to leave Canberra because they had lost their jobs. They had to put their houses on the market and they could not even get enough money for them to cover what it cost to set them up. So we are coming from a trough, from a really bad situation, to a situation -


Senator Rae - From a boom to a trough to a rationalised growth.


Senator RYAN - We went from a boom to a trough but I do not think there are enough indications that we are going into a period of stable growth. I am happy to see some improvement in the real estate market but it is not a trend which at this stage we can happily characterise as stable and rational growth. I wish we could. The other problem, of course, is the widespread unemployment in the Australian Capital Territory. It is fairly obvious that when we have, as we do in Canberra, one of the highest levels of youth unemployment in the country, one of the highest levels of female unemployment in the country and a problem of adult unemployment- the male breadwinner with dependants being out of work- on a serious scale, we do not have a situation that is healthy for small business. If people do not have money to spend the shopkeepers cannot sell. The very serious situation of unemployment in the Australian Capital Territory is probably at the root of the problems facing small business.

The last Australian Bureau of Statistics survey on unemployment showed a very unhappy picture for Canberra indeed. I see Senator Knight grabbing his pen to make notes to respond to me. He will probably say that again there was an improvement. Certainly it is a fact that the February figures showed a decline in the number of people seeking either full time or part time employment. That decline was from 8,400 in January to 8,200 in February. I hope that decline of 200- and the maintenance of a figure of something in excess of 8,000 people registered as seeking jobs in the Australian Capital Territorywill not be hailed by Senator Knight as an economic boom. In terms of percentages the decline translated into a decline of from 7.9 per cent to 7.7 per cent of unemployed people. That is still higher than the national figure. The number of people seeking full time work declined from 8.2 per cent to 6.4 per cent of the full time work force. From the figures supplied it seems that the number of people seeking part time work has risen from something like 5 per cent of the part time work force to 14.4 per cent. That is more than double the national part time unemployment rate of 6.9 per cent. The unemployment rate amongst Australian Capital Territory adolescents in February remained the worst in the country. Although it declined from 34.4 per cent to 30 per cent between January and February, at 30 per cent it was half as high again as the national average, which was 20.2 per cent in February. It may be safely inferred that the unemployment rate among male adolescents is slightly less than the average rate and that the unemployment rate among female adolescents is higher, which would put the unemployment rate amongst Canberra's 15-year-old to 19-year-old women at 30 per cent plus.

In the face of those figures and in the face of the relationship between those figures and the Fraser Government policies for the Australian Capital Teritory there is absolutely no cause for saying that the economy in the Australian Capital Territory is on the mend and that we are experiencing a boom or even a mini-boom, although those phrases have become increasingly popular on the lips of Mr Haslem, the honourable member for Canberra. I understand that Senator Knight also has been speaking in positive terms about the local economy.

I do not want to be put in the position of characterising the local economy as being any worse than it actually is but it is in a serious situation. It is a situation which has, more than in any other place in Australia, a direct relationship to Government policy. The Fraser Government imposed staff ceilings on the Australian Capital Territory and thus created a great deal of unemployment. The Fraser Government has cut back and slowed down the NCDC capital expenditure program, which again has had ramifications in terms of unemployment in the building industry and associated industries. The Fraser Government has failed to legislate for proper rent control of commercial premises in the Australian Capital Territory. So we can see very clearly that the Fraser Government should look at the situation of small business and unemployment in the Australian Capital Territory. It should introduce policies and practices to ameliorate that situation. It has failed to do so.

The legislation before us at this stage, the Payroll Tax (Territories) Assessment Amendment Bill, is simply a technical procedure whereby the level of exemption from payroll tax for small business has been increased to keep up with the inflation rate. The Opposition is not opposing this legislation. In conclusion I say that if the

Prime Minister and the Fraser Government really want to pose as the champions of small business with any credibility in this Territory they need to act very fast with respect to staff ceilings, protection of small business and, of course, improving the funds available to the NCDC for capital expenditure.







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