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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-04-29 Daily Xml
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Question Time

SMALL BUSINESS

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:22): I seek leave to make a brief explanation before asking the Minister for Small Business a question about small business closures.

Leave granted.

The Hon. D.W. RIDGWAY: On studying the government's State Strategic Plan I noted a number of targets, including targets T1.5, T4.7 and T4.11. Target T1.5 states:

Business investment: exceed Australia's ratio of business investment as a percentage of the economy by 2014.

T4.7 states:

Business innovation: the proportion of South Australian businesses innovating to exceed 50 per cent in 2010 and 60 per cent in 2014.

T4.11 states:

Business expenditure: increase business expenditure on research and development to 1.5 per cent of GSP in 2010 and increase to 1.9 per cent by 2014.

We know that in the past decade this state has seen significant economic prosperity and employment growth. This government will claim that it is the result of its doing, but even it would be stretched to say that. It was under the stewardship of the former Howard government that we had such a wonderful economy—and, indeed, the whole world economy grew excessively.

The PRESIDENT: Order! The honourable member will refrain from opinion in his question.

The Hon. D.W. RIDGWAY: It is a very good opinion, I would think. However, on coming to office, the Labor government abandoned our food export program and it has not resourced the overseas trade offices, as was done under the former Liberal government. In fact, it closed a number of offices. In a Sunday Mail article of 8 March, Mr Max Baldock, President of the Small Retailers Association, quoted some interesting figures. The article states that small business, in respect of the small retail sector, employs some 235,000 people and provides services often in competition with big business; it provides a wonderful service across our state. One of the alarming statistics is that Mr Baldock is quoted as saying that 26,000 small businesses operating in 2003 were not around in 2005. The article states:

…there are now fears this attrition rate could double, with 42,000 shutting up shop between now and 2011.

My question is: will the minister explain why, given the best of economic times, record low interest rates and strong population growth, under the Labor government's watch 26,000 businesses ceased to exist in the first four years of this government?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:25): It will probably take me some time, but, first, I need to correct much of the misinformation in the preamble to the honourable member's question. I am pleased the honourable member has been reading the Strategic Plan, and I hope members opposite will be converts to the idea of having a plan which sets out the goals for the government. The honourable member talked about research and development. I note that in the statement released by the Economic Development Board in its recent report it emphasised the need to strengthen our effort in that regard. Yesterday, the Premier responded in a ministerial statement tabled in this chamber.

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: Indeed, the seven years under this government has seen a strengthening and diversification of the economy in this state. We have seen the mining industry grow from $40 million a year in exploration with four mines to over $350 million a year with 11 mines and a number of others opening.

There has been a big expansion in our defence industry and we have diversified our economy. Against that we have, over the course of the past seven years in this state, been in the worst drought that this country has every recorded. One of the worst performing sectors of our economy in the past few years has been the rural economy, and the reason for that is simply the drought. When the irrigation industry, in particular, at the moment is down to 18 per cent of water allocations, clearly that has a huge impact on productivity in the rural economy. We can only hope that the rain that we have received in the past few days is a return to normal rainfall and that that sector of our economy, which inevitably has been performing badly because of the drought, will recover.

In his preamble the honourable member also claimed that we cut food export programs. During my time as minister for industry and trade we implemented a whole new—

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: I will come to that in a minute because you are wrong on that as well. We actually increased trade through the Market Access Program (MAP), which has been helpful in assisting the economy in terms of exports. I know about those because I was in the portfolio at the time.

The honourable member claimed that we closed offices. Instead of spending, I think, $500,000 a year on the Hong Kong office, we were able to reach an agreement with Austrade whereby we could have an officer dedicated to South Australia within that organisation. Also, we added an office in Chennai in India, a rapidly growing market where this state had no representation. So, during that period of time we had additional representation in India, but we saved money in the process because we had done it by arrangement with Austrade.

Last week the Treasurer was in Vietnam. Vietnam recently joined the World Trade Organisation. It is one of the most rapidly growing economies and a country with great potential. We have a significant population of Vietnamese speaking people within our state, so the potential is great to develop our relations there and also in Chile. They were two extensions announced by the Deputy Premier and Minister for Industry and Trade last week.

So much of the preamble of the honourable member's question is completely incorrect. Small business is an important sector of the economy, and from time to time there will always be a significant downturn, particularly in the retail sector. I was at the function where Mr Brownsea made those comments and I was able, as I am sure the Leader of the Opposition was, to talk to many of the people from the retail trade group in relation to the current situation.

What we can say is that all the indicators are that this state is performing as well as, if not better, than other states in Australia and, indeed, most of the world. However, with a global crisis of this dimension, to pretend that somehow or other we could be immune from that—

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: Well, you need to look at the net impact on small business. We know that a lot of people perhaps retire and go into a small retail business, and they find that it is not for them and they move on. However, what is important is the overall health of the sector, and we know that all of the statistics—whether you are looking at bankruptcies or a whole range of ABS statistics—indicate that business in this state is performing well.

There is no doubt that the global financial crisis is biting; we all know that unemployment is rising; and we all know that small business will face an increasingly difficult time in coming months. However, all those statistics also indicate that this state is performing as well, if not better, than other parts of Australia and, indeed, most of the world. To try to pretend, as the Leader of the Opposition in the other place does, that somehow or other we can be immune from the financial crisis is just nonsense.

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