SMALL BUSINESS

Thursday 07 July, 2016

Mr TARZIA (Hartley) (11:31): I move:

That this house notes—

1. (a) small business is the lifeblood of the economy and employment in South Australia;

(b) the process for establishing a start-up small business in South Australia is restrictive, riddled with senseless regulations and is ultimately a disincentive for current and prospective small business owners.

Mr TARZIA (Hartley) (11:31): I move:

That this house notes—

1. (a) small business is the lifeblood of the economy and employment in South Australia;

(b) the process for establishing a start-up small business in South Australia is restrictive, riddled with senseless regulations and is ultimately a disincentive for current and prospective small business owners.

2. Condemns the government—

(a) for its failure to support start-up small businesses throughout its tenure in office;

(b) for imposing the highest taxes, most burdensome regulations and worst conditions for the start-up small business sector;

(c) for being directly responsible for the loss of thousands of jobs in South Australia in the start-up small business sector and the severe financial and personal hardship these people have suffered as a result of the government's regressive policies; and

3. Calls on honourable members to foster policies which will benefit the small business sector and its employees in South Australia.

We are a great state, but we are being let down by a poor government. We know that we are a state that was built on great ideas and the creativity of those who have gone before us. With a global economy that is changing, some areas of traditional manufacturing are in decline. We do have many great challenges ahead of us as a state. We also need a government which supports the business ecosystem and which allows people in our state to pursue ideas. It was welcome recently to see our new Prime Minister, Malcolm Turnbull, move innovation into the centre of public debate—and rightly so. What this government should have been doing was following through and complementing what the Prime Minister was doing.

South Australians should not be afraid to be entrepreneurs in this state. The South Australian government should be encouraging people to become entrepreneurs, to allow people to pursue their ideas, to take a risk and be prepared, if they do fail, to try again. The future of our South Australian economy in maintaining our ever so high standard of living in our First World country depends on our progressing innovation and relevant technologies.

We all know that start-ups drive employment growth; in fact, from 2006 to 2011, it was said that they added 1.44 million jobs to the economy. We have also been told in the past that businesses that do innovate and are innovative are twice as likely to report productivity increases than businesses that do not innovate. There is also some PricewaterhouseCoopers (PwC) modelling which actually shows that an economy that is innovation-focused certainly has the potential to raise GDP substantially—in fact, by $37 billion in 2024, with a longer contribution to GDP as high as $136 billion in 2034, which would create close to 540,000 jobs.

This government should be helping South Australians unlock the potential in this area. The South Australian government should be complementing what the current federal government has started doing. The federal government has recently launched a range of initiatives and continues to stimulate a range of areas. For example, have a look at the R&D tax incentive, which helped 13,000 companies with $2.4 billion in tax support for eligible R&D investment in 2015 alone.

The government should know that innovation is critical to South Australia, but we are being let down by this state government. The current state government thinks the answer to the state's economic challenges is to increase taxes. We all know about the 100,000 jobs promise that was created by the state government many years ago. Where are they now, you might ask, Deputy Speaker? They are nowhere near that promise.

There were good programs and systems in place a few years ago, such as Playford Capital. What did the current minister and previous ministers of this government do? They got rid of Playford Capital, and that is not the only thing they have got rid of. We find ourselves in 2016 with the highest unemployment rate in the nation and a government that is more focused on activity, on satisfying the media cycle of the day, rather than being outcome driven.

If they were outcome driven, we would have those 100,000 new jobs which was the mantra of the Labor government back then that we do not have now, but they are focused only on activity, not outcomes. We need a government that is focused on outcomes in this area. They will be judged on their outcomes, not only in this area but also across other areas. Certainly, in the small business space and in the start-up space, they have let South Australians down dramatically.

A StartUp Muster statement was put out earlier in 2016. The report, which highlights the performance of the previous year, actually paints a very poor picture for South Australia. We saw that South Australian start-ups comprised just under 3 per cent of all nationwide start-ups, and the report actually places South Australia second to last on a state-by-state basis and last of all the mainland cities listed, including the Gold Coast.

To make things worse, there was a Sensis Business Index rating for the December quarter, which showed that business confidence in South Australia was languishing at plus 16, which is less than half the national average. No policy idea should be off the table if it will stimulate small business and stimulate start-ups. We know that start-ups are the foundation of our next generation of small businesses, and the start-ups of today's generation could well be the ASX-listed companies of tomorrow.

Small business is our largest employer and the biggest creator of new jobs. We certainly must restore small business confidence through lower taxes and lower regulation to help small businesses get ahead and thrive. The current government has actually created a culture within government of anti-innovation, a culture of regulation and a culture of high tax. That culture must end immediately. We know that, if you want to stimulate the economy, you need to tax less, and the government should be ruling out any new taxes.

We have fantastic opportunities in South Australia. Start-ups must be given a fair go to develop. Entrepreneurs must feel confident that they are able to take advantage of the incredible resources available in our state. Time and time again, our shadow minister for employment has done a good job of highlighting the flaws in the government's current economic policies. We saw that, for 17 months in a row or even more, South Australia has had the highest employment rate in the nation on trend figures.

Not only have we had high unemployment, we have also had a sustained fall in full-time employment in South Australia with the loss of many thousands of full-time positions since 2015. In fact, there are currently fewer South Australians in full-time employment than in April 2013. We would hate to see the state become a part-time employment state and we see many examples where the stats are not favourable.

I made mention of the fact that the government is obsessed with activity and not outcomes. If they were obsessed with outcomes then we would see the delivery of the 100,000 jobs promise. Let me give you an example of activity that has not resulted in a favourable outcome. We saw recently, as highlighted by the shadow treasurer, the Hon. Rob Lucas in the other place, how the Premier and his department had spent $13.6 million on staff to distribute $15 million in grants. We would say that this is an obscene waste of money that has been spent on staff to distribute a similar amount of money in grants.

Evidence to the Budget and Finance Committee recently revealed that the Weatherill Labor government spent $4.9 million dollars this year on 30 staff in the new Investment Attraction agency to administer $5 million of grants to businesses. Next year, the government is proposing to spend $8.3 million on 40 staff to administer $10 million in grants to businesses. So, over a two-year period you will see this current government spending $13.6 million to distribute $15 million. With policies like that, policies that are focused on activities but not outcomes, it is not surprising that South Australia continues to have the highest unemployment rate in the nation.

As an example, this agency was announced with great publicity. I tell you what—one thing that this government does well is glossy coloured brochures. They do some of the best, nice and easy so that members on the other side can understand them—more pictures, fewer words, just so that they can understand them. We need more than activity; we need outcomes. This is a very serious issue.

Mr Pengilly interjecting:

The DEPUTY SPEAKER: Is that the member for Finniss I hear?

Mr Pengilly: No.

Mr TARZIA: Probably.

Mr Pengilly: I don't know that he's here, ma'am.

The DEPUTY SPEAKER: I can't see him but I definitely hear him, and I shouldn't be hearing him.

Mr Pederick: It's an echo in the chamber.

The DEPUTY SPEAKER: It sounds like a very Finnissian echo.

Mr TARZIA: There was a recent Global Startup Ecosystem Ranking for 2015, released by Compass, a key resource that measures and ranks business start-ups. It did not even mention South Australia or even Adelaide. In addition, the 2014-15 Venture Capital and Later Stage Private Equity figures for South Australia released by the ABS were not even reported because the number of venture capital deals was too small. What we see here are regressive policies of the current government. Unfortunately, if this government does not get its act in order South Australia will be the laughing stock in this area, and we cannot allow that to happen. That is why we are here today shining a light on these issues.

We need to make sure that South Australia's reputation for fostering business start-ups is much higher. We need to make sure that we deliver in this area. The Premier in the past has said that innovation is certainly key to transforming the state's economy and that his vision is to position South Australia globally as a start-up destination, but have a look at tangible examples of how the government has, for example, handled Uber. Give us a break! What has happened with the driverless cars concept? Where is it? I would say that we not only have driverless cars but also a driverless government at the moment.

The government is obsessed with activity, as I said, not outcomes. If you are focused on outcomes then the delivery achieves an outcome, and at the moment that is not being done. Unfortunately, we have all seen, as embarrassing as it is, how South Australia continues to have the highest unemployment rate of the nation. Every state has issues with the fall of mineral prices, every state has issues with the decline of traditional manufacturing, every state has issues associated with the low Australian dollar at times, every state deals with these macro-economic factors; however, when we look interstate, we see job growth. Why do we not see that job growth here in South Australia?

This government has had long enough now to do something about it; it will be judged on its record in this area. The government may today have some sweeteners in regard to the economy. We would welcome hearing more debate about the economy, just as we like it, because we know that this government does not have an innovation bone in its body. We know that this government does not have any credibility when it comes to running an economy and we know that this government does not have any credibility when it comes to supporting small business, which is the lifeblood of the South Australian economy. I am sure my colleagues will elaborate on this fact today, but we ask the government to have a good hard look at itself in regard to this area. We need to be doing more to stimulate small business and also the start-up sector as well.

We have already seen a decision by the government to unnecessarily jack up the solid waste levy, slug South Australians another $64 million in tax, which will certainly hurt households. It seems that this government just does not quite get it. Increasing taxes does not stimulate the economy. You need to reduce taxes. You need to make sure that people go out and spend more money to stimulate the economy. That is how you get economic growth; that is how you get economic activity. With those few words, I commend this motion to the house and look forward to the debate.