Page 3996 - Week 13 - Tuesday, 25 November 2014
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the government to create wealth, wealth that can be taxed—at a reasonable rate, one would hope—and help address some of the budget problems the ACT faces. But we currently suffer from the fact that we account for only 1.2 per cent of small businesses when we account for 1.6 per cent of the population. It is that relativity that would show we could easily grow the small business sector if the conditions were right.
Part of the problem with this is that we have a government that, for instance, through their land tax hikes have addressed the issue of what they saw was a distortion where most of the land tax was being paid by single dwellings so now they have hit the other side—unit properties. We have seen this government go after the general employer exemption, saying they were avoiding paying payroll tax. But they did no analysis as to whether or not the exemption was contributing to the growth of small businesses in the ACT. If you simply take the narrow view that there is a tax that we want to apply broadly without taking into consideration what having a genuine employer exemption might have done in terms of the creation of new businesses in the ACT, then business is clearly being sold short by this government and the population is being sold short by this government.
In the case of the general employer exemption to payroll tax, it was done because people needed to be part of a group that had access to the government panels. The government did not do any of this work. I asked in the briefing whether they had done the analysis and the answer was no. What we have is a knee-jerk reaction—“The budget’s in a bad state. We’ll just up payroll tax”—instead of asking how we can address long term the dilemma of the number of businesses relative to the total population and increase our revenue base and how we can make business more successful in the ACT so that we can tax it—at a reasonable rate, of course—to ensure that we can pay for those services. But no, we have a government that is very short-sighted, and a government that until the last couple of years—probably just before the last election—had failed to acknowledge the importance of the small business sector in the ACT, and that is a shame.
We know from the ASDReports that family businesses, in particular small business, create wealth. If we are creating wealth, we are creating a future, and we need to create the industries that allow us to have that future. In the ACT—you can see it from those stats I started with—it is in the service industries and the creative industries that we have the greatest potential. Unless there is a big goldmine waiting to be discovered out there somewhere in the ACT, mining is not going to be a big driver of the ACT economy and neither is agriculture, forestry and fishing. Indeed, because of the tyranny of distance much of Australia suffers from, beyond local consumption or high end products that one might export—for instance, the wine market that is growing around the world with its insatiable thirst for Australian wines, particularly cool climate wines from the Canberra region—manufacturing is not going to be a big driver of business either in the ACT.
Mr Barr: Wine is more agriculture.
MR SMYTH: I know it is more agriculture, but neither manufacturing nor agriculture is going to be a big driver. They will be boutique and they will add to our reputation and they should be encouraged, but it is in that service industry. It is
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