Transcript by The Hon Brendan O’Connor MP

Small business and the mining boom, carbon price, housing affordability – Doorstop, The Haircutters, Gladstone

Location: Gladstone, Queensland

BRENDAN O’CONNOR: Well look, firstly, it’s fantastic to be in Gladstone and it’s great to be at this very successful business, Haircutters. I’ve been speaking with the proprietor, Sandy, about the growth in her business. I think she, in 12 months, has increased her employment from 14 staff to 20. That’s an indicator of the success of the mining boom.

But it’s also important that we provide support for small businesses that are not directly working within the mining sector. And for that reason we’ve introduced a number of policies, including the instant asset tax write-off which allows for people to purchase assets of up to $6,500 each, as many assets as they like, and get the full depreciation of the assets in one year instead of four. That improves cash flow and also removes depreciation schedules, which cuts down on paperwork. And the one thing small businesses hate is paperwork. So that’s an important initiative which will apply for Sandy.

And also we’ve got the instant – we’ve got the loss carry-back scheme which allows for people, if they find themselves in a loss position, to seek to have repaid to them some of the taxes they paid of profits in the previous year. And we know small businesses go through cycles where they might have a very profitable year and then, because of investment or other matters, they find themselves in a loss position. This new scheme allows them to get repaid taxes, and who doesn’t want to get their tax back.

So these two initiatives have come from the MRRT which allows us to spread the benefits of the mining boom to small businesses that are not directly in the mining sector.

But, as I’ve heard from Sandy, one of the reasons why she’s so successful, it’s not just the innovative way she approaches her work, it’s also because of the incoming people as a result of the mining investment. So, good to be here.

I should also say I’ve been looking at the NRAS scheme. That’s providing accommodation at lower than market rent value for people who can’t afford their housing any more. The one downside of the mining boom is that the rental prices are going up. Not everyone is getting the benefits of the mining boom because if you’re on a fixed income, like a pension, you cannot afford to pay these high, in some cases, astronomical rent increases. So we have invested in the construction of rental accommodation which allows people to afford to stay and not find themselves at risk of being homeless.

They’re the two reasons I’ve been here, and later on I’ll be talking to the councillors about housing matters.

QUESTION: You’re obviously here to speak to small businesses today. The mining boom has helped a lot. There are a lot of others who are struggling. Is the Federal Government going to provide any more funding or training to bringing more people here for the smaller businesses?

BRENDAN O’CONNOR: We are investing in training – in an historic way, we have invested more in training, because what we need is people to be skilled. The one thing that we don’t want to do, particularly in a boom, is not have sufficiently skilled employees in Gladstone and indeed communities around the country. So our investment is very strong. I am talking to small businesses about apprenticeships.

Also, they’re looking at what services they can get directly as a small business, what advice or what training they can get. Because sometimes people make the assumption that because they have a passion to run their own business they actually can do that, and I think they need to therefore avail themselves of the advisory services we provide to small businesses. And I’m looking at ways that we can provide more training for small businesses because I think it’s important they have the skills before they put at risk, you know, in some cases their house as they put it up for collateral to invest in their business.

QUESTION: You talk a lot about the – well, the Government talks a lot about the personal subsidies for people because of the carbon tax. What is the Federal Government doing for small businesses…

BRENDAN O’CONNOR: Well, what we certainly made sure we were doing for small businesses was not to have them pay any tax as a result of the carbon price reforms. Unlike the GST or any other tax reform, small business does not have to fill out one form, does not have to report to government on carbon emissions. They have no paperwork whatsoever and they have no direct taxes whatsoever. There is an increase to energy costs for households and businesses of about 10 per cent. What we do know is that electricity prices have been going up for a number of years excessively because of state instrumentalities putting up the prices to invest in infrastructure. That is not related to carbon.

What we have said though is that there will be an increase to electricity and what we have done is provided the money direct to householders. But we’ve also ensured that some of these small business tax initiatives like the instant asset write-off and indeed the loss carry-back will come from the revenue of the carbon price reforms.

QUESTION: The Federal Opposition Leader is visiting a lot of small businesses discussing concerns with the carbon tax. What concerns have been raised with you from your business discussions just like this one?

BRENDAN O’CONNOR: Well, I’m sorry, you said the Federal who?

QUESTION: The Federal Opposition Leader.

BRENDAN O’CONNOR: Well, I think the Federal Opposition Leader, Tony Abbott, has used business and workers as a prop as he goes around scaring every Australian about the absurdities of his claims in relation to carbon prices.

He said this community was going to be wiped off the face of the map. I mean, the hysterical claims by Tony Abbott of course have been found to be untrue. And just because he uses people with hard hats as a prop for his scare campaign doesn’t mean he actually cares about working people. He was part of a government that introduced WorkChoices and we all know what he wanted to do with workers then.

So let’s not have the sort of crocodile tears of Tony Abbott being explained in any other way other than a hysterical campaign which is not founded in fact and has been found not to be true.

What I’ve been doing as Minister for Small Business has been getting out and talking about the facts.

I understand that people do not necessarily agree with carbon price reform and I respect that. But I will tell them the facts. I won’t say there’s no impact. I explain the impact and I always invite people to ask me more questions.

I think the more information we get out to small businesses, the more they will understand that there are no significant burdens upon them, no red tape, no regulation, no paperwork, no direct taxes. That’s as a result of us being sensitive to the needs of small businesses.

And I don’t need to be lectured to by a Leader of the Opposition who, in fact, when in government and was the minister for small business, allowed small businesses to be impacted by the GST.

QUESTION: But, given it is the Opposition Leader that is going out to small businesses talking about this particular tax itself, shouldn’t it be the federal – you know, the Prime Minister that [indistinct] small businesses explaining…

BRENDAN O’CONNOR: Well see, you just made the mistake that others have made, and because Tony Abbott says the Prime Minister doesn’t meet with small businesses, it must be true. Well, you have to start thinking about and questioning some of the assertions he makes because, in fact, only two nights ago I was with the Prime Minister as we spoke with small businesses. She spoke with small businesses probably each and every day when she’s been in Queensland, and will continue to do so because they are a very important constituency.

In fact, small businesses are the largest employers. The mining sector is very important for Gladstone and other parts of Australia. But, you know, they employ a couple of hundred thousand people. Small businesses employ nearly five million Australians. And that’s why it’s really critical that we did not impose any unfair burdens upon them when we introduced carbon, and that’s why we didn’t ask them to actually take up their time to record or to fill in paperwork, and we didn’t tax them directly.

Now, Mr Abbott is asserting that they are being taxed. That’s just plainly a lie and it will be found to be a lie. And I’ll continue to tell the truth, as will the Prime Minister and the Government.

He will continue to try to scare people. But I think, in the end, you know, most people are pretty sensible and they know – they’ll see through those assertions and realise that they’re not true.

QUESTION: Getting back just to Gladstone and small business, sorry, what about the people – a lot of people come to Gladstone, obviously, for the industry, the big wages. What about the people who have the small businesses, who own a bookstore, who own JB Hi Fi? How are you going to help them get employees? A lot of them are being forced to close.

BRENDAN O’CONNOR: Well, that’s one of the real challenges for any economy that’s so strong. So, we see the upside, the benefits, you know, money coming in. You see the Haircutters business here, Sandy, doing so well. More people coming, more patrons. So you’re seeing investment in the town. But I think there are also challenges for businesses as well. And I think we need to make sure that we have sufficient labour.

So one of the issues will always be do we have – how do we stop the drain of labour out of other sectors of the economy, not just in Gladstone but other parts of the Australia.

We need to actually ensure therefore we have sufficiently skilled staff and we have to make sure that the wages are reasonable; reasonable for the employer and reasonable for employees, because if it’s not reasonable people will look to go elsewhere. And, in the end, it’s a free country, people should make decisions where they work. But employers do have to be mindful about what they’re paying their staff so that they can keep them, and I know that’s not easy.

QUESTION: And that’s one thing you’re obviously going to be talking to about with the chamber and the council, trying to figure out a solution?

BRENDAN O’CONNOR: Well, about attracting people here. I mean, I think what people have to understand is that with the benefits of the mining boom there are also real challenges, significant challenges.

One, as I said earlier, is housing affordability. The other is about maintaining your own labour.

And I think therefore people have to think innovatively about do we make sure that the other businesses are not affected.

Now what the Government can do, of course, is make sure we invest in training so that people are sufficiently skilled outside of the mining sector, and also provide tax relief in the form of the initiatives I’ve just mentioned so that we can provide support for small businesses.

In the end, people who are good employers tend to keep good staff. But we understand the challenges they face as a result of the boom.

QUESTION: What’s the Federal Government doing to address the cost of living pressures as a result of the wage disparity between resource workers and say public sector workers like teachers and hospital workers [indistinct]?

BRENDAN O’CONNOR: Well, that’s – obviously teachers are employed by the State Government. You might want to address specifically that answer to Campbell Newman.

But, look, in relation to all wages outside of the mining sector you’re feeling that pull.

And I don’t think it’s an easy thing to solve. I just think, as I say, in many cases employers are looking to ensure long-term security for employees. I think it’s important to say some people know they may benefit from the mining sector but it might be around – like the construction phase – only for a couple of years. So they choose not to leave their employment because they need to – you know, they need security beyond a two year period.

So there are ways that employers are already working to make sure that happens.

What we can do is provide investment for training of staff in non-sector areas, provide tax relief so that there are benefits flowing to small businesses and other businesses outside the mining sector, so that they can afford to pay reasonable wages and maintain their staff.

That’s why we’ve always said there are challenges. That’s why we brought in the Minerals Resource Rent Tax to spread the boom to other businesses, other sectors of the economy. Because at the moment the mining sector are making historic profits from resources that are owned by all Australians, we want the benefits to flow to all Australians including those in other sectors of our economy.

QUESTION: There’s a fair few Labor ministers in – Federal Labor ministers in Queensland at the moment. Is this blitz helping to win back voters?

BRENDAN O’CONNOR: Look, it’s always important to get out. I was at the Community Cabinet with the Prime Minister and many of my ministerial colleagues last night. I was up here last week as well. I’ve been to Queensland many times this year, as has the Prime Minister. But it’s fantastic to get us all together at a Community Cabinet and also then get around to as many places as we can.

When Parliament is not sitting we’re forever on the road. Now, I’ve been to Cairns and I’ve been to regional Queensland many times.

QUESTION: Just one more. Just still on the MRRT, the – you spoke about the benefits for public service workers. But the Queensland Government is opposed to it. It’s working with this legal challenge that Fortescue Metals has put up.. What are your thoughts there?

BRENDAN O’CONNOR: Well, the advice we have received is it’s very, very unlikely. We think it’s a stunt by the Queensland Government. It’s very unlikely to succeed.

This tax is definitely Constitutional. It’s one to ensure that all Queenslanders benefit from the mining boom, not just the mining sector themselves.

I think most people want to see all the benefits of the boom spread throughout this State and I’m surprised that Campbell Newman has really decided to join with the richest miners in Australia to take money, effectively, out of the pockets of working people and give it back to Gina Rinehart and Clive Palmer.