The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of David Bradbury

David Bradbury

Assistant Treasurer, Minister Assisting for Financial Services & Superannuation and Minister for Competition Policy & Consumer Affairs

5 March 2012 - 18 September 2013

Transcript of 05/07/2012

NO.064

Interview with Andrew Robertson

ABC The Business

5 July 2012

SUBJECTS: Small business tax relief, ACCC carbon enforcement action

HOST:

David Bradbury, welcome to the program.

BRADBURY:

Good evening Andrew, good to be with you.

HOST:

Small business feels that it's been short-changed by the Government over the carbon tax in that households are getting compensated, big polluters are getting big compensation, but small business feels like it's getting nothing. What do you say to small business?

BRADBURY:

Look, we've always taken the view, and I should firstly say that a very large proportion of small businesses in this country are not incorporated, they are sole traders and partnerships. Now for those small business people, they will benefit every bit as much as every other taxpayer when it comes to the massive tax cuts that are being delivered when it comes to personal income tax cuts.

Let's just have a look at what that means. There are seven million working Australians, of which many of them would be small businesses which will get a tax cut. It'll start to flow through, from the first of July, and people will start to see that in their pay packets from here on.

Six million of those workers will get a tax cut of $300 or more for the year, so those small businesses that are not incorporated will certainly get the benefits of the tax cuts.

HOST:

Whether you're incorporated or not, you're going to see your energy costs go up and see your input costs go up and you may not have the market power to raise prices because you're a small player, so you're going to be worse off, aren't you?

BRADBURY:

For many businesses, they won't be feeling significant increases. And can I make the point about energy costs, COSBOA have provided information that would suggest that for the average small business, the average small retail business, energy costs as a proportion of total expenditure for that business is somewhere in the order of about two per cent.

HOST:

The Australian Chamber of Commerce and Industry though believes that small business profits will be cut by about 10 to 20 per cent because of the carbon tax, and if that comes true that's a lot of votes, isn't it?

BRADBURY:

Well, can I tell you that today, two suppliers of solar panels were pulled up by the ACCC and they've provided voluntary undertakings because they were found to have provided information that the ACCC found was to be misleading customers. And the information they were providing was suggesting that power prices would go up by 20 per cent. Now, can I point out to you that the reason those businesses had indicated that the increase was to be 20 per cent was because they had relied upon a newspaper advertisement that was put together by a peak body, an organisation of which ACCI happens to be a member, this was the Trade and Industry Alliance, the Australian Trade and Industry Alliance, who put out a political advertisement – that's what it was – saying that electricity prices would go up by 20 per cent as a result of the carbon price. Now, these two businesses out there have relied upon the information that was put in that advertisement and as a consequence of that they've now found themselves on the wrong side of the law.

So there is a lot being said, a lot of claims being made out there in the political debate, but people have to be careful, particularly those that are engaging in trade and commerce, businesspeople, they have to be careful to try and put all of the political rhetoric to one side, and there's a lot of that, a lot of misleading claims being made. Mr Abbott's been making many of them. They've got to put all of that to one side, but frankly, the sorts of claims we see being made by some of the vested interests and Mr Abbott, they're actually confusing businesspeople and potentially making it more likely that businesses like the two that got into trouble that were announced by the ACCC today that will end up falling on the wrong side of the law.

HOST:

Just on that, you mentioned the ACCC. The ACCC is warning business to be careful if they do put their prices up because the ACCC is watching and may prosecute them, but the Government is saying to business, well pass on increased costs. Isn't that a mixed message?

BRADBURY:

Let me be really clear about this. The first point is, if your prices, if your costs are going up as a result of the carbon price then there's nothing unfair, unreasonable, unjust about you increasing your prices by a commensurate level that reflects an increase in your costs. But where there is a problem is if you mislead your consumers. If you come out and you jack your prices up and the increase in those prices has nothing to do with the carbon price and you're out there telling customers that you've only increased your prices because of the carbon price. Now that's a rip off. It's a rip off in any man's language and it actually doesn't matter whether it relates to the carbon price or any other matter. The message to business out there in our community is: we understand that this can be confusing but be very careful about the representations you make.

HOST:

Alright David Bradbury, thank you very much for your time, we have to leave it there.

BRADBURY:

Good to be with you Andrew.