Parliamentary Speeches
Regional Jobs (06/05/2009)
Mr DONALD PAGE (Ballina) [6.40 p.m.]: I welcome the opportunity to participate in the debate on the matter of public importance on jobs in New South Wales because nothing is more important than maintaining and growing employment and jobs in this State. According to the Australian Bureau of Statistics New South Wales is losing 360 jobs per day under this Government and the unemployment rate in New South Wales is the highest of any State in Australia at 6.9 per cent. Job losses are occurring in both the public sector and the private sector. As the shadow Minister for Small Business I will concentrate my remarks on the small business area. However, I make the point in passing that in the public sector in my region the North Coast Area Health Service is currently in the process of shedding 400 jobs: 110 of those jobs have already gone, 165 have been identified to go, and the remaining jobs will go in the next few months. This Government is part of the problem in terms of increasing the level of unemployment.
The small business sector is the engine room of the economy. I know it is a cliché but it is also true. I will provide the House with a few facts that should be of concern to members on the other side of the House. Fact number one: 56 per cent of business liquidations across Australia are occurring in New South Wales. In other words, more liquidations are occurring in New South Wales than in all the rest of Australia put together. Fact number two: The Reserve Bank tells us that the level of bad loans in the business sector is six times higher than the rate of bad loans in the home mortgage sector. Fact number three: Recent Australian Bureau of Statistics figures show that over 22,000 people left New South Wales last year and the great bulk of them went to Queensland. Many of them are small business people. They went to Queensland because that State offers a much more business friendly economic environment.
Fact number four: The Independent Pricing and Regulatory Tribunal has recently recommended a 20 per cent price increase in electricity, which obviously small and medium businesses cannot afford. Last year KPMG compiled a report that showed that on average regional businesses are paying 51 per cent more for their electricity than their city counterparts. Obviously, any increase in electricity prices will be especially bad for regional businesses. Fact number five: According to a Sensis business survey the New South Wales Government is regarded as the least business friendly government in Australia and it has the lowest level of confidence by the business sector of any State government.
A profitable small business sector is absolutely vital to maintaining and growing jobs. According to the Department of State and Regional Development there are 443,000 small businesses in New South Wales—which constitutes 97 per cent of all businesses in this State—and they employ well over one million people. I ask the House to contemplate that if each small business employed one more person we would have 443,000 extra jobs. So Government needs to do much more to help small business. What problems do small businesses have? Several organisations have surveyed the small business sector in recent times, including the Institute of Public Affairs, the Sensis Business Index, and the New South Wales Business Chamber. As a general comment they say that the surveys reveal that doing business in New South Wales is too expensive compared with in other States. They say that there is too much red tape.
Kevin MacDonald, the Chief Executive Officer of the New South Wales Business Chamber, said that a survey found that 70 per cent of businesses have been significantly or moderately impacted by red tape, with one in five businesses spending more than 20 hours a week on compliance. Westpac also did a survey last year which indicated that Queensland businesses spend, on average, five hours less per week on government administration than their New South Wales counterparts. Even the New South Wales Labor Government admits there is a problem with red tape. The Minister for Regulatory Reform, Joe Tripodi, said in the Annual Update Removing Red Tape in New South Wales in October 2008, "The outcomes of the New South Wales Government's new approach are, in the main, yet to be seen." In other words, nothing is happening; we are hoping for something to happen in the future.
The New South Wales Business Chamber says that focusing on individual or single pieces of legislation is not solving the problem of increasing regulation. Rather, the Business Chamber, in its paper entitled "Reducing the Cost of Doing Business in NSW" at page 4 says that the Government's commitment to reducing red tape and regulatory burden needs to be more comprehensive, detailed and much more ambitious.
The second main problem identified in the surveys is that taxes are too high, which makes it very difficult for businesses to be competitive. For example, compare payroll tax in New South Wales and Queensland. In New South Wales payroll tax is 5.75 per cent, whereas in Queensland it is 4.89 per cent. In New South Wales the threshold is $625,000, which means that if a business employs about 11 or 12 people it will start to pay payroll tax. In Queensland the threshold is $1 million, which means the business does not start paying payroll tax until it employs about 20 people. That is why the Coalition is advocating a 15 per cent payroll tax cut immediately to make this State competitive with Queensland. That single policy initiative alone will save 16,000 jobs.
So what is required? The member for Maitland said the Coalition does not have any alternative policies. I suggest to him that, firstly, the Government needs to commit to specific targets for reducing red tape, as the Victorian Government has done. Importantly, the Government needs to be made to report to the Parliament, in a transparent way, as to whether those targets are being met. Secondly, I suggest that the Government needs to have a policy of reducing regulation by introducing a one-for-two policy. In other words, for every regulation the Government introduces it removes two. That would be a real way of reducing the amount of red tape and regulation that binds the business sector.
Thirdly, the Government needs to immediately rule out the 20 per cent increase in electricity prices. This can be done. Ministers are shareholders in the energy providing companies, and the Government has the power to say to the Independent Pricing and Regulatory Tribunal that it will not accept the proposed increase of 20 per cent. Fourthly, the Government needs to reduce the number of taxes and the rate of taxation to make New South Wales competitive with other States. That includes an immediate reduction in payroll tax by 15 per cent.
Fifthly, the Government needs to guarantee that government agencies will pay their bills within 30 days of receiving their invoice, and that if they do not do so interest on outstanding bills will apply. Sixthly, the Government needs to reduce the time taken to deliver infrastructure projects. That is why the Coalition has employed Max Moore-Wilton to advise on reducing the time it takes to deliver infrastructure projects. Many small businesses are subcontractors in large infrastructure projects.
