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ALP begs small business for forgiveness.

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Embargoed until 12.30 am Thursday 17 September 1998






Labor will today launch their small business policy.


Labor must think the small business community suffers from collective amnesia.


Small business remember what Labor did to them when in government. Labor deliberately jacked up interest rates to record high levels. This was Paul Keating’s recession that we had to have. Under Labor interest rates reached 20.5 per cent.


Now contrast that with the Coalition record — five interest rate cuts and the lowest small business interest rates for 33 years.


And what was Labor’s record on fair trading reform? Labor had 17 reviews in 13 years on fair trading issues — but nothing was actually done! In contrast we instituted the Fair Trading Inquiry (the Reid Committee) and have implemented in our first term — note the key word implemented — its key findings, including a trade practices provision that enhances small business protection against unconscionable business conduct.


We have also delivered reforms to the $81 billion franchising industry. Once again Labor sat on its hands on that issue. The then Small Business Minister in 1994 commissioned a report recommending a mandatory code of conduct for the franchising industry. They chose to ignore their own report and kept the voluntary code in place. The voluntary code ground to a halt. Once again the Coalition took up the policy challenge. We have implemented a mandatory code for the sector commencing 1 July 1998. That code has the full weight of the Trade Practices Act.


Labor of course say they have eaten lots of humble pie and now seek forgiveness.


Well let’s look at Labor’s most recent track record with respect to small business issues:


·  They rejected our unfair dismissal exemption for small business. Our measure recognised that small businesses are reluctant to take on new employees for fear of being hit with Labor’s unfair dismissal provisions. By Labor rejecting our exemption in the Senate, Rob Bastian, the head of a key small business organisation COSBOA, maintains that measure has cost 50,000 jobs. And Labor has the hide to say it is pro jobs.


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·  Earlier this year we attempted to implement the Reid (Fair Trading) Committee recommendation regarding representative actions. This would have allowed the ACCC to take on cases on behalf of small business. Labor said it supported the Reid Committee report lock stock and barrel. But when the Maritime Union of Australia claimed our representative action matter was an attempt to get at the union, the ALP showed its true colours once again. They followed the union line and rejected this amendment. Once again trade union interests were put ahead of small business needs.


·  During our first term we introduced a capital gains tax (CGT) exemption ($500,000 exemption) on the sale of a small business for retirement. We argue small business deserve to be rewarded for building up their businesses. Unlike many employees, they do not have superannuation coverage. Their businesses represent their super nest egg. Guess which party fought our measure all the way? — that’s right Kim and the team.


Small business be warned - you are well and truly in Labor’s sights — not for your vote but for your revenue!


Labor’s latest CGT measure contained in their tax announcement is a retrospectiv e tax grab.


Under Labor’s tax grab, all pre-CGT assets (ie before 20 September 1985) must now be valued as at 1 January 1999. This is what they say about their own measure: “It is not possible to provide a rigorous costing estimate for this change….nevertheless there are billions of dollars of pre CGT assets….over time significant revenue will be generated from this initiative”.


A spokesman for the Australian Society of Certified Practicing Accountants described those asset valuations Labor proposes as immense and impossible” . The spokesman then went on to say, “...the valuation people are cracking open the Bollinger tonight”. Clearly they expect to do well out of Labor’s compliance requirements. Too bad for small business.


So what is in Labor’s small business policy? We’ll see shortly. But based on their small business policy issued in Hobart at the ALP Policy Conference, they haven’t put a lot of thought into it. Their early draft talked about “passive assistance” for smal l business — whatever that means. They quickly dropped that description. They then included statements in their policy like:


- “The dynamism of small business cannot be underestimated and should not be hampered”

- ".... . the sector should be as free as p ossible from restriction and interference provided that firms meet their social and industrial relations obligations...”


So no specifics — just vague touchy feely statements.


Labor just doesn’t understand small business. They plan to hit small business w ith fresh taxes to fund their election promises. Clearly that is not the way to encourage small businesses to grow and to take on new staff. They hope small business have forgotten that it was Labor that brought the sector to its knees.