Ladies and gentlemen, it’s a great pleasure to be here with you this morning.
I would like to start by acknowledging the traditional owners of the land on which we meet and also acknowledge the passing of Galarrwuy Yunupingu, one of our nation’s finest Indigenous leaders. We were up in East Arnhem Land only a couple of months ago, and his legacy, the work that he’s done particularly with children in education, in health, is quite remarkable and that work will be continued by many, but he’ll be missed by all.
I also acknowledge this morning, Minister Suleyman. Thank you very much Grant, from CBA and to all of the sponsors here. It is indeed a pleasure to be here at the National Business Summit.
I want to thank the team at COSBOA firstly for the engagement with us. As a party, with my senior colleagues, and of course across the aisle in Parliament.
Small business runs through the blood of the Liberal Party and it certainly runs through my blood.
My Dad was a self-employed bricklayer and builder who grew up in the suburbs. My Mum ran a small family day care business taking kids in before-and after-school. My parents – like many of those in small business – worked extremely hard.
It was their small business which ultimately paid for the upbringing and education of me and my four siblings.
It was a constant discussion around the kitchen table.
It was a period of high interest rates and unemployment.
And it’s fair to say that my parents – actually like many in the Labor Party now – were never fans of Paul Keating.
From grade seven until I started university, I worked in a butcher shop after school. And I saw that business go through good and bad times.
It all inspired me to start my own small business; first with a building and development arm, and then ultimately in childcare where I employed about 40 staff before coming into politics.
We’ve been through overdrafts to the limit, valuations and LVR’s; and good and bad bank managers.
Many within our ranks also come from a small business background as well.
But, interestingly, no one on Labor’s frontbench economic team has done anything other than university life, work in a union, for an MP or Senator’s office, and then into public office themselves.
The Liberal Party sees small business as an economic powerhouse, driving jobs and economic prosperity for our country.
We see people who are risk takers and sacrifice for the sake of their families.
We see people who risk their own capital and enterprise and provide employment, which in turn, helps those workers support their families and provide for their own future.
Many within Labor view small business owners with suspicions, exploiters of workers – as people taking advantage of their workforce. It’s why their industrial relations policy is so draconian, and, by design, drags many small businesses unnecessarily into the union net.
It was a similar concept demonstrated at the business Roundtable after the government won the election in May.
COSBOA was there in good faith, along with many other business groups.
But in the end, we saw a predetermined outcome rolled out and it wasn’t to the advantage of small business.
In their first budget – and since then – the government has broken multiple promises, including an attack on self-managed super funds.
In contrast, over COVID, the Coalition didn’t build overpriced school halls and install pink batts to keep the economy going through a shock.
We provided $252 billion dollars in COVID economic support.
We provided Instant Asset Write-Off to small businesses to help them get through to the next stage.
Jobkeeper kept around 1 million businesses in business and helped almost 3.8 million Australians.
It saved 700,000 jobs.
Now the government’s talking a lot about debt at the moment, and Liberal Party debt. Fair enough in terms of the COVID debt that we left to the Labor Party. But when we came into government in 2013, the debt was to reach a projected $667 billion dollars.
At the time, the Labor Party supported all of our COVID spending and proposed another $81 billion dollars. And now, as I say, they complain about the debt. If the debt continues to go up, spending continues to increase, then inflation will remain high with that extra pressure.
Since being elected Leader of our Party and the Opposition 10 months ago, I’ve travelled to many places around the country, obviously.
I’ve seen some incredible small businesses and many of them are concerned about their (inaudible) life.
Last August, I met with a variety of manufacturers at a hub in Penrith, in New South Wales.
One manufacturer told me that he had budgeted $70,000 dollars for their quarterly electricity bill.
The actual cost came in at more than $200,000 – a 185 per cent increase.
We were in Central Queensland in October.
I met Adrian and Michelle who own a café, a hairdressing salon, and a shop that sells agricultural, farming and machinery supplies.
They don’t know how they’re going to continue to meet the increasing costs of input costs into their business.
In November, we were in Fairfield in Western Sydney at a café owned by a beautiful couple. They’ve been there three decades.
They’ve now taken the decision for the first time to stop running air conditioning in their business because they can’t afford the bill.
In February we were in Perth and visited an IGA there that had been set up by Greg in 1986 and his two kids now are fully involved in the business. But the cost of stock continues to increase. His sales are down. All of their input costs are going up and it is becoming increasingly difficult.
His is a story told across the country.
In March, I was here in Melbourne, in Bayswater. I met with managers and apprentices from New Touch Industries. It’s a metal laser cutting fabrication business.
In government, we provided about $100,000 to support them with automation of some of the machinery. Yet, just like other businesses around the country, New Touch is also feeling the pinch of increased power prices.
Now, a lot of media focus has been understandably, rightly on mortgage rates, but for many small businesses, they are already paying double digit interest rates for their overdrafts.
Insurance premiums continue to go up.
Their own mortgage payments, rental costs, petrol, it is all going up.
In part, as I say, it’s because of economic decisions that have been made by the government that have fuelled inflation, not seen it abate.
Since the Labor Party came to office, the interest rates have gone up nine out of nine times and when we were in government, the Reserve Bank met 96 occasions, interest rates went up once.
Now, the Reserve Bank will meet again today and I hope that Governor Philip Lowe is able to find a period of pause, particularly for homeowners and for small businesses.
But it is going to be tough for a prolonged period because inflation is projected to be sticky and it is unlikely to come back to the RBA reserve range anytime soon.
One of the most important debates in our country, as I say, is energy policy.
We’ve supported much of what the Albanese Government has done in relation to their investment in renewable technologies, but the first step that they took was to price fix, which doesn’t work here and it’s not worked anywhere around the world.
We know that power prices aren’t coming down.
On the contrary, they’re set to rise by 20 per cent or more on the 1st of July for almost 250,000 businesses and 1.6 million households.
The government also continues to undermine reliable and affordable baseload power at every turn.
In government, we put in place significant support for renewables, resulting in the highest uptake of solar per capita in the world.
We started Snowy Hydro 2.0.
We invested billions of dollars in new battery technologies, hydrogen and other prospective firming technologies.
But the reality is that we need reliable baseload power to keep the fridges running at the IGA and keep the air conditioning running in small businesses around the country.
If there is a disruption to supply, manufacturing will take its capital offshore and that is an untenable position for business to be put into.
Gas in our country is in huge demand and the government now decides to limit supply, which of course drives up prices even further. And they are now talking about new projects being stopped altogether. That will only increase power prices further.
Hydrogen isn’t yet a commercial reality as a firming technology and the battery technology is not sufficiently advanced.
As you know, AGL has just invested something like $200 million in the latest battery technology in South Australia.
The battery lasts for between one and two hours.
Now, that’s not enough to get us through the hours of darkness when solar is not working or through inclement weather when solar panels aren’t at their peak and the wind is not blowing.
I worry that the government’s energy policy will see the systems which provide around 65 per cent of our power today, turn off before the other system is ready.
We need to have a mature discussion about this in our country.
In terms of the government’s renewable plan, by 2030 it needs to build 40 wind turbines every month and construct 22,000 solar panels every day.
It also needs to roll out 28,000 kilometres of transmission lines by 2050, costing at least $100 billion in today’s dollars.
It also has a huge environmental footprint as the poles and wires traverse through prime farming land and national parks.
To be honest, it’s just not realistic and there is certainly no regard to the cost – $100 billion is not going to be absorbed by companies or by the government – it’s going to be passed on to you as consumers.
So we need to have a realistic discussion in our judgement about the use of small modular reactor nuclear technology.
Now, the government has just signed up to nuclear submarines, the latest technology. When that submarine arrives in Australia the reactor will be fuelled and remain intact for 30 years. It has the ability for that submarine to traverse the globe for 30 years and not be refuelled.
The waste will need to be dealt with and the government’s signed up to a commitment now, to the US and the UK to dispose of nuclear reactors on the boat as well as the waste.
As we’ve seen in many other countries around the world, including in Canada and France, they don’t have the ability to meet their emissions reductions targets without the use of nuclear technology.
The idea is not of a Homer Simpson style plant somewhere in a suburb near you. Nobody is talking about a plant of that scale.
But the latest technology allows for firming up of renewables into the system. It allows reliability in our power and that is one of the significant inputs required for a successful business to operate.
It’s required because people need to reduce input costs, not increase them.
And at least we should be able to have a discussion as a country in relation to this, particularly given the cost differential, the advantage of the cost differential as demonstrated in France, in Canada and in many other countries.
Now, our time in Opposition, given that we’re 10 months in, is not to announce every policy that we’re working on at the moment.
But it is fair to say that we have significant work underway in relation to the way that we treat small business in the taxation system, the way that there is disparity between, and a power imbalance, between small and bigger businesses.
We need to work on reducing costs, not increasing those costs at a very difficult time for small business.
We need to make sure that we examine again, policies like Instant Asset Write-Off, which have been of a significant benefit, not only to small businesses, but to general economic activity in our country.
We need to make sure that we support small business during what is going to be a very difficult time over the next 12 months as the industrial relations landscape changes very significantly back to a period akin to a pre Keating-Hawke time.
We need to make sure that we work on policies that help businesses in the tax sphere, particularly around capital gains.
The government at the moment is proposing a tax on unrealised capital gains, which would be a significant blow to people’s cash flow.
They’re also talking – as the Treasurer has pointed out – about the prospect of a capital gains tax on housing.
Now, it was quickly hosed down, but the Treasurer was very adamant in his advocacy of that and we should be prepared to have that debate.
If that’s the government’s agenda, they should take it to the election.
But it won’t be our policy.
We will continue to provide support to small businesses, particularly microbusinesses.
We want to do more to get women into businesses, particularly in a post-COVID environment.
When we were in government over the period 2013 to 2022, 60 per cent of 1.9 million jobs created were women.
Under Labor, the gender pay gap was at 17.4 per cent and reduced to 13.8 per cent on our watch.
So we are in for a difficult 12 months by most economists’ judgement.
The government needs to be helping, not hindering, small business and we need to bring ourselves to the table with policies that are going to support business come through the other side.
I want to thank COSBOA for the work that you do as I said in my opening remarks.
The advocacy is incredibly important in this forum, in Canberra, but around the country.
And if your voice is muted or if people are hesitant in speaking up, we won’t get the best possible outcome for small business.
Thank you very much.