Parliamentary Speeches
Small Business (01/09/2009)
Mr DONALD PAGE (Ballina) [3.40 p.m.]: I welcome the opportunity to speak on the important subject of small business. At the outset I move:
That the motion be amended by leaving out all words after "That" with a view to inserting instead:
this House calls on the Government to be more proactive in supporting small business by cutting taxation including payroll tax, paying bills on time, reducing the delivery time on major projects and cutting red tape.
The viability of small business is very much linked to the general welfare and strength of the economy. A more buoyant economy means that, generally speaking, small businesses will thrive. What is the situation with the economy in New South Wales? We have one of the lowest growth rates of any State in Australia. We have the highest unemployment rate of any State or Territory in Australia at 6.5 per cent. After 20 successive quarters the lowest level of confidence in government—State or Territory or Federal—was that of the business community in the New South Wales Government. The Sensis business survey results predate the world financial crisis; they go back five years. For five years, in each successive quarter, the business community—small business in particular—has been saying that it has less confidence in the New South Wales Government than it has of any other government in Australia in relation to small business policy settings.
New South Wales has the highest level of taxation of any State in Australia, so New South Wales businesses cannot be competitive with businesses in other States that are operating on a lower tax regime. A good example is payroll tax. The member for Wyong said that payroll taxes will come down to 5.75 per cent and then to 5.65 per cent. Payroll tax in Queensland is 4.89 per cent and the threshold in Queensland is not $638,000, which it is in New South Wales, but over $1 million. You do not even pay payroll tax in Queensland until you have a payroll of over $1 million. When you do pay it you pay a much lower rate of taxation than applies in New South Wales. This is one of the key reasons the New South Wales Liberal Party and The Nationals have introduced a policy of an immediate cut of 15 per cent, and potentially 20 per cent in those areas having high unemployment, in the payroll tax rate so that we can be competitive with States such as Queensland.
It is not just in relation to payroll tax that we are not competitive. Workers compensation premiums for many industries in this State are roughly twice what they are in Queensland. We have a lot of work to do to make our tax regime competitive and give our small businesses a chance of competing on an even footing with other small businesses across the nation. Of the total amount of insurance premiums that businesses pay, 38 per cent is State Government taxation. There is a lot of room for the State Government to help small business and the sort of stuff that the member for Wyong went on about today frankly is just window-dressing. We need fundamental taxation reform, a business community with confidence in the Government's policy settings and unemployment that is not the highest of any State in the country. According to Australian Bureau of Statistics figures, last year 22,000 people left New South Wales and went to Queensland. Not all of those people would be small business people, but quite a few of them would. Queensland is a much more attractive State to do business in. We are losing expertise and skilled workers.
I am very concerned that this State's small business liquidation rate is the highest in the nation. In the small business area, 56 per cent of all liquidations occur in New South Wales, which means New South Wales has more small business liquidations than all the rest of the country. If that does not provide a wake-up call for the Government I do not know what does. According to the Reserve Bank the level of bad loans in the small business sector in this State is six-times higher than it is for the home mortgage sector. Whilst people have been doing it tough in the home mortgage area—and there is no doubt about that, although they have been supported to some extent by interest rates coming down over the past 18 months or so—the number of bad loans in the small business sector is six times those in the home mortgage market.
What do we need to do? First, we need to make ourselves competitive with other States. As I have indicated, we need to reduce taxes. We must reduce payroll taxes. Secondly, we have to get the Government to pay its bills on time. It should be mandatory for government agencies to pay their small business clients within 30 days. That is the generally accepted position, yet some departments—notably the Department of Health—string these people out for 60, 90 or 120 days. Figures gained under freedom of information legislation showed that 75,000 invoices were outstanding in the Department of Health for well over 60 days. That is totally unfair to small business people who rely on the Government to pay its bills. A Coalition government will pay its bills within 30 days of receiving the invoice. It will also cut delivery times on major projects. Many small businesses subcontract on major projects—roads, hospitals, whatever—and if we can cut the planning time by half, which is our objective and we have employed Max Moore-Wilton to advise us how to do that precisely, we will get those projects on line a lot faster and give economic stimulus to the small business sector.
We must also implement a transparent system of reducing red tape. The Victorian Government has a very good policy in relation to reducing red tape. We should look at red tape reduction from the end user's perspective rather than the Government's perspective. There is a lot the Government can do and what it is doing is totally unsatisfactory. That is why we have moved the amendment.
