Dr Chris Back - Liberal Senator for Western Australia

BILLS - Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017, Second Reading

May 11, 2017

Senator BACK (Western Australia) (11:17): Before addressing myself to the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017, I propose to spend some moments on the importance of the Native Title Amendment (Indigenous Land Use Agreements) Bill 2017. Also, I foreshadow that I will be responding to what I believe to have been a highly inaccurate and cowardly statement by Senator Dastyari about Chevron and its now managing director, Mr Hearne. I think it is a disgrace that a person under parliamentary privilege would come in and make the statements that he has made. But I will get onto that in a few moments, because he is wrong. This chamber and those listening need to know just how wrong and how dastardly Senator Dastyari has been in that attack on Chevron.

Let me go, if I may, because it is directly relevant to the opportunities in small business access, to that associated with the native title amendment bill that is before us. I have to urge everybody in this chamber that, before we rise and return to our home states and territories, we have to address this anomaly. It comes about as a result of the fact of a decision of a justice in McGlade in the Federal Court in Perth recently in which he overturned what had been the decision of a justice in Bygrave previously in relation to native title claims, particularly the percentage of native title claimants associated with them. In Bygrave, the justice had the view that so long as there was greater than 51 per cent of native title claimants then it was possible to proceed with what is known as an Indigenous Land Use Agreement. Where the McGlade case has caused the change and has caused the ruction, is McGlade has effectively required 100 per cent of claimants to be in agreement before anything can proceed.

Yes, it has something to do with Adani mine. But, by Jove, that is one of the very few. I learned from my very good colleague Senator Scullion that there are some 126 agreements around Australia associated with native title that are affected by this decision. They are going to affect the benefits to native title claimants associated with those Indigenous Land Use Agreements. These land use agreements are themselves, of course, voluntary. They are providing an opportunity for native title groups to use those rights in beneficial ways, particularly in relation to economic development to provide certainty for all parties doing business on native title land. And if Senator Dastyari and his colleagues, and indeed everyone in this chamber, is genuinely interested in ensuring the continued benefit to native title recipients under those ILUAs then it will be in their greatest interests to make sure we do not rise from this place until we deal with it.

There is a bill before the chamber. It will address the concerns that McGlade has raised, and it is incumbent on all of us. If we fail to, each one of us must go back to those native title groups, including those in the Indigenous areas as well as the companies with whom they deal, and explain to them why there is now no certainty. I know on a personal basis a colleague who, only this week and next week, is associated with some negotiations on native title. This particular person is in the eastern states this week representing the interests of Aboriginal people, and next week in the North of Australia he will be representing the interests of a mining company. He is an absolutely eminent man of great integrity, but I know that this negotiation is now on hold whilst we deal with this issue.

It is the case that a grant that is made under an invalid Indigenous Land Use Agreement will itself be invalid against native title—that is in my state with the Noongar people for whom this particular judgment was made in the Federal Court by Justice McGlade. It will have application right around Australia and, I dare say, the islands adjacent to us. This is of critical importance and, if people really want to do something in the small business space to continue to encourage Aboriginal people under these ILUAs, to continue to encourage other companies to deal with, to participate in and to work for the improvement of people in those communities, it is essential that we deal with this native title amendment Indigenous land act.

I appreciate the fact that Senator Dastyari has remained in the chamber—I thank you for that. Senator Dastyari made the comment a few moments ago—and, if Hansard proves I am wrong, I am willing to be corrected—through you, Acting Deputy President, that Chevron had paid no corporate tax in the last couple of years. I can tell you that—perhaps wrongly—I used a mobile phone in the chamber to check only in the last few minutes with the senior executive of Chevron of Australia, who assured me that in the last four to five years that company has paid no less than $4 billion of tax. If you listen to Senator Dastyari, you would be invited to draw the conclusion that company had paid no tax. Those were the words that were used: no corporate tax paid. They were your words—through you, Acting Deputy President. Senator Dastyari should know about the petroleum resource rent tax. It is a super profits tax after you have met and have reimbursed certain costs. He is making the comment that, in the projects with which Chevron is associated, they have paid no PRRT. For heavens' sake, the project at Gorgon on Barrow Island has only got two of three new LNG trains up and running. The project at Wheatstone has not yet commissioned its first one. How in heavens' name would a person who pretends to have the economic knowledge that Senator Dastyari pretends to understand and believe and stand up in this place and draw the inference that this company has paid no PRRT when indeed they have not yet got to the stage of making a profit? What Senator Dastyari failed to say was that this company, Chevron, which he is so keen to run down, has invested no less than—

Senator Dastyari: They paid no corporate tax last year. Are you claiming they paid corporate tax last year?

Senator BACK: Isn't it amazing? Did I interrupt Senator Dastyari when he was attacking a fine company investing billions of dollars in my home state? No, I offered him the courtesy of silence. But the words that I am saying are resonating with Senator Dastyari, because he is trying to close me down.

Senator Dastyari: You are lying.

The ACTING DEPUTY PRESIDENT ( Senator Marshall ): Senator Dastyari, you will not use those words in this place, and you will withdraw them.

Senator Dastyari: Sorry, Mr Acting Deputy President—which words? I am not quite sure what you want me to withdraw.

The ACTING DEPUTY PRESIDENT: You do know which words you have to withdraw, and you will withdraw them.

Senator Dastyari: Sorry, I withdraw any comment. I genuinely did not mean offence.

Senator BACK: I assure you, Senator Dastyari, no offence was taken. I do want to place on the record the fact that this company, in two major projects—at Gorgon and Wheatstone—are investing US$130 billion. To put it into perspective, in today's dollars, that is a project 15 times the size of the Snowy Mountains Scheme—US$130 billion. They will employ 19,000 people in construction. Over the 40-year life of those two projects they will contribute trillions of dollars to the Australian economy, over 100,000 jobs, billions of dollars in taxes and royalties, and, yes, a petroleum resource rent tax. They have invested billions of dollars with local small businesses in Western Australia, around Dampier, Onslow and the other ports. They have effectively developed the town of Onslow. Whilst comments were made by Senator Dastyari—about a person who cannot defend himself and on projects outside of Australia—I can relate to this chamber, as I have done in the past, the very fine occupational health, safety and welfare record of that company.

Finally, in passing, before I go back to addressing the subject of this discussion today, I should say to those who have any concerns about Chevron in the environmental space that Chevron's Gorgon project on Barrow Island is, in fact, in an A-class reserve. It is by far and away, as a result directly of Chevron's investment and care for the natural environment of Barrow Island, the best managed A-class reserve anywhere, not only on mainland Australia but around the Australian coastline. I reject, totally and thoroughly, the assertions made by Senator Dastyari.

I now turn, if I may, to the bill that is before us. I say very proudly that the coalition government always has and always will back small business. We will back it like a Melbourne Cup winner: up the straight, all the way, past the finishing line and through to the parade area. I will tell you why—because it is the engine room of the Australian economy. It employs nearly five million Australians in rural regions, in remote areas of Australia and in suburbs. It employs people at the lower end of the skills level as well as through to highly skilled people. It is the most versatile of all of the employment groups in this country. I am very proud to say that, in the budget of only the last couple of days, we announced a further tax cut for small business and, of course, we will see the company tax rate reduced to some 25 per cent. For those who quite rightly say that an enormous number of small businesses are not companies, it is important to record that there is also a five per cent tax discount for unincorporated companies, for sole operators and partnerships. These are the real issues that help small businesses and encourage further employment of young people and older people in our economy. There is the tax deduction of being able to write off in the one year $20,000 for assets purchased, and multiples of them—not just one. As a restaurant and cafe owner said to me when we first introduced this, 'I can now bring forward by four months the start of my new business because I can purchase different equipment to make that operation run—each one up to $20,000—and I can write it off fully in the first year.' That restaurant is up and running with 14 or 15 staff already.

I am very proud to say what the coalition government is doing and will continue to do. Having run small and medium sized businesses and still assisting constituents where I am able to, in terms of their obligations under the BAS, PAYG, superannuation et cetera, I can say it is the small-business person who really does the work for the Tax Commissioner. They fill out the BAS at the end of every quarter, make sure that the superannuation commitments are met and paid and ensure, of course, that workers compensation insurance and public liability insurance are paid. It is no wonder it is so difficult to make a quid in small business. But this government has cut red tape by $4½ billion, simplifying those processes that I was just speaking about, and removing many small businesses—up to half a million of them—from the PAYG system.

A scheme which I am very minded towards and I think needs enormous support from the parliament is the employee share scheme. If we can get employees to actually own shares in the business in which they are employed, then of course they have that greater incentive, because they themselves are part of the ownership. I, for one, will be watching that aspect of it very, very closely.

We have seen in recent times the opening up of the China-Australia, the Korea-Australia and the Japan-Australia free trade agreements. The best example of all, of course, is the cherry producer in Tasmania who has taken his cherry exports from a very small proportion to being a very significant exporter of that horticultural product into the Chinese market with significant improvement in employment, as I understand it—perhaps Senator McKim would be more familiar than I am and might know—

Senator McKim: I used to work for him.

Senator BACK: There you go: we have proof here of the evidence of not only the quality of the product but also, hopefully, the quality of his staff—through you, Deputy President, to Senator McKim.

These are the initiatives being taken by this coalition government in the services sector and the commodities sector to encourage small business even more. An ombudsman being appointed—and reference is made to the ombudsman in the bill being proposed by the Labor Party, and I will speak some more about the ombudsman's position. It is proposed in the bill to enable the ombudsman to provide assistance, as I understand it, with advising a private litigant on the arguments that might be made and the evidence needed to satisfy a court to grant a no adverse costs order. That of itself sounds all right. The only problem is: to what extent might it compromise an ombudsman who afterwards may have been seen to have given advice to an applicant or to a private litigant only to find out that that advice is now the subject of a challenge? We cannot really have a circumstance in which the ombudsman could themselves be the subject of a court action as a result of incorrect or inadequate advice given to a litigant. So there are, I think, difficulties associated with that particular element.

I applaud the Labor Party for putting this bill before the chamber. It recognises that they do have an understanding of some of the challenges associated with the issues of small business in Australia—expanding small business.

For those of us who have been in business all our lives, we actually do not like the term 'small business' all that much. It suggests that you want to remain small. Of course you do not want to remain small; the whole objective of business is to grow that business and move, perhaps, towards medium business and, in so doing, to employ more people.

I come back to the employee share scheme: imagine the scenario as long-trusted employees are part of an opportunity to expand a business and then indeed the next step—not always the best step for a business in my own experience—to move into export markets and be able to develop both your services and/or commodities along those lines.

Mention is made in this legislation—and I come to the decision of the coalition government in accepting the recommendations of the Harper review on the repeal of section 46 of the Competition and Consumer Act and replacing it with a provision that prevents firms with substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition. I join with Senator Dastyari in the concept of the capacity of a larger company to be able to use its market power, market strength, to be able to dominate a small business. I have no difficulty with that argument; he just chose the wrong example in my humble opinion.

I will give you an example of some of the big retailers who will proudly announce to the retail market that they are going to undertake a huge discount of some product, only then to go back to the farmer, the supplier or the horticulturalist and say, 'Oh, by the way, we're undertaking a big discount on milk'—or a big discount on chicken or a big discount on some other product, be it almonds or whatever—'and, by the way, we're going to pay for most of it by reducing the payment to you in that scenario.' That is abuse of market power. It places the small business in a situation where they cannot negotiate their way out of that, as they are locked into supply and of course they have no alternative. So there are definitely circumstances where we have to ensure that big business does not have that unfair competitive advantage.

Legislation that we have introduced in this space, the Fair Work Amendment (Small Business—Penalty Rates Exemption) Bill—which we introduced into this parliament in 2015—is directed at protecting the interests of small business and indeed protecting the interests of employees in small business. We have also of course seen the involvement of the ACCC. In November of last year they released their report going to the whole concept of unfair trading relationships between large and small business, particularly where small businesses are, in a sense, forced to sign contracts or are at least influenced to sign contracts. Under the provisions of the ACCC, which the government accepted, we now know that a small business can challenge a term in a standard form contract, which is also a small business contract, on the basis that it is unfair. Big business were not happy with us, and they lobbied very, very hard against us. But the decision was taken to ensure the protection of small business.

As we all know, most small business people are their own accountant, their own person associated with marketing and they are their own person associated with sales. As I said earlier, at the end of every quarter they are the person sitting down trying to work out the BAS, trying to work out revenue and expenditure and trying to make sure they get superannuation liabilities paid et cetera. They are not the sorts of organisations that have huge teams of lawyers, accountants and others.

The coalition will continue to support small business by way of entrepreneurship, by way of innovation and by way of start-up and particularly by protecting small business when it comes to competition with big business and indeed with big unions. Whilst the Labor Party's bill is there to be debated, it does miss most of the elements important to small business.

Contact Chris Back

PHONE: (08) 9414 7288

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