21 August 2017
Speech - #2017021, 2017

Address to the Lebanese Chamber of Commerce, Sydney

Check against delivery

Our economic story in Australia is fundamentally an immigration story and a small business story.

The success our small business community has enjoyed and the prosperity it has generated for Australians, is in large part due to our country’s enrichment from immigration.

The migration of ideas, innovation and ingenuity, not just people.

It is a story of sacrifice, hard work and a commendable willingness to ‘have a go’ in the land of the fair go.

This has always enabled our newest citizens to not just survive in their new country, but thrive, whether they came over 200 years ago or have just arrived.

And all Australians have been the beneficiaries, as it has positioned our economy for growth and prosperity.

Around 30 per cent of Australia’s workforce were born overseas, a figure that has been gradually increasing since the early 1990s.

One in 50 businesses in Australia are owned by immigrants who arrived on our shores from the Middle East and North Africa.

Lebanese Australians have one of the highest rates of self employment of any ethnic group in the country.

Having picked up their lives - starting again some 15,000 kilometres from their birthplace - they firmly believed a new start in a new country would bring new opportunities, and they have.

This is a room full of Australians who understand the economics of opportunity.

This is a room who understands that seizing your opportunities in Australia is all about the contribution you can make, rather than the contribution you can take from others,

Who understand that fairness is all about ‘a fair go for those who have a go’.

When people have an iron will to succeed and make something of their lives, in the face of early hardships and the unfamiliarity of culture and language

The story of Lebanese business success in Australia is exactly what we need to showcase to inspire the next generation; to encourage young Australians to think big and start small. To look beyond the circumstances of the present and set out on the pathway to achieve something of significance.

To see the better days ahead and seize them.

This is the economics of opportunity that the Turnbull Government firmly believes in. It is also what the vast majority of hardworking Lebanese Australian families have practiced and preached to their children since they first came to Australia in the mid 1800s.

Let me show you why.

I’m told Joseph Kairouz remembers the order like it was yesterday.

“Three lambs and a quarter cut of beef.”

Humble beginnings.

This was the day Joseph would finally realise his dream conceived watching his father work his butcher’s shop, idolising both his passion and his craftsmanship.

Joseph was in business. His fledgling butcher’s shop in suburban Melbourne had its first customer.

This barely a few years after fleeing war-torn Lebanon and being thrown headlong into a strange country with an unfamiliar language, and being sent out on the street to support the family.

In 1988, four years after opening his first shop, Joseph set his sights abroad, exporting Australian meat into such countries as Saudi Arabia, Egypt, and Indonesia.

Three decades from his cultural upheaval, from that meagre order of lamb and beef, and Joseph’s thriving Cedar Meats company is selling upwards of 37,000 animals per week from a business that has grown from an empty shop to a $160 million operation.

This is a business that went from one employee doing everything from cutting the meat to balancing the books, to 400 direct employees. Joseph had a go, and we are all the beneficiaries.

This is what the econom of opportunity produces.

The passage of trades and traditions from one generation to the next - from father to son, from mother to daughter - is an endearing feature of the Lebanese way of life.

If dad was a butcher, fair chance you would one day pick up a cleaver. If your family raised livestock, you better be comfortable around animals.

This was also Salem Sukkar’s story.

As a boy, he tore around the foothills of the mountains that towered over his town of Becharri, helping his parents herd the 400 goats that were their living, breathing livelihood. Just like they were for his grand parents, and their parents, in a way of life for the Sukkar’s that spanned four centuries.

Salem arrived in Australia as a wide-eyed 18-year-old in 1969, plonking himself in Sydney’s heaving western suburbs and working 15 years as a welder without much enjoyment, without much reward.

Till the lure of the land could no longer be ignored.

So he went out and bought some goats. And, a five acre hobby farm to match, and put his hand to an ancient trade that was already flowing in his veins.

Pleased with the yogurt he was churning out, he took a sample down to the local grocers for a taste test, and by the time he had returned home, there was a message waiting.

“Bring some more.”

He made $4000 in his first year, in 1985.

As things go in Sydney’s wonderful ethnic communities, when a taste of the homeland is found, word spreads rapidly, and suddenly Salem and his wife were working 16 hours a day - milking by hand, pasteurising the milk, making the cheese and yogurt and doing the deliveries.

Green Valley Dairy now employs around 20 workers, has a place on the shelves at Coles, and boasts a multi-million dollar turnover.

Salem says it right when talking about what success means now: “I’m not worried about how much I make now. I want to run the company successfully and expand.”

This is what the eoncomics opportunity produces.

Sometimes seizing an opportunity requires a second knock at the door.

Therese Bechara knows this notion intimately.

She had spied a vacant lot in Cammeray and a dream took hold. Chock full of confidence and backed by accounts that proved her savings prowess, Therese took her plans to a bank.

They said ‘no way’; told her she could only get a $500,000 loan to purchase and develop the land if her husband went guarantor.

I guess the bank didn’t know Therese very well.

She politely declined and found another way, making an ingenious pitch to The Gas Company to secure the loan, on the condition she used their gas on the property.

After developing the land into apartments, she sold the property for $3.1 million and Landia Constructions was born.

As in many cases of migrant achievement, Therese’s success was birthed from adversity.

Life in the suburbia of Ryde was far from ideal for a kid who grew up in the mountain ranges of her Lebanese homeland.

When the Australian economy plunged into a recession in the mid 70s under the Whitlam Government, Therese made a difficult decision that she would never regret - sacrificing her teenage freedom and education in order to get a job to help her family survive.

Her start was the bottom rung in a real estate agency.

Today, her resume is on display for all to see; dotted across Sydney’s skyline, from the the Ritz and Waldorf apartments in Cremorne to myriad high rises in the city’s west.

What does success mean for Therese Bechara? Well, it has nothing to do with her own bank account.

In accepting her award at the Ethnic Business Awards, Therese put it rather succinctly and selflessly.

“My biggest contribution to Australia is literally the fact we have created hundreds of jobs.”

This is what the economics of opportunity produces.

When small businesses are championed; when they are encouraged to grow and embrace new opportunities and innovate, Australians share the benefits.

We benefit by the creation of jobs, and we benefit by seeing real, sustained growth in wages.

This is what Joseph, Salem and Therese focus on. That is what the Turnbull Government is unapologetically focussed on as well. It is the pillar of so many of our policies, and the pivot point we always come back to.

Because growth is the only answer.

You don’t grow the economy by taxing Australia out of business.

You don’t grow the economy by penalising those who want to achieve something with their lives.

You don’t grow the economy by sucking the life out of small business and removing any incentive for our innovators, our entrepreneurs, our big thinkers to propel this nation forward.

You grow the economy by backing in the economics of opportunity and by backing in small bnusiness.

Our commitment to small business is perhaps best displayed in our approach to cutting taxes.

This government has lowered tax for small and medium-sized business, with 3.2 million businesses now enjoying lower tax rates. Not a promise, but an outcome - an outcome that leaves $29.8 billion over ten years in the tills of small businesses which they can use to create new jobs, lift wages and drive their business forward.

And there is more to come. By 2026-27, incorporated small and medium-sized businesses with active turnover under $50 million, will have a tax rate of 25 per cent.

The Turnbull Government recognised that a company tax rate of 30 per cent was an anchor that was not only holding businesses back and destroying their competitive edge up against their global peers, but it was undermining growth in the economy.

Our major trading partners got up and left behind such uncompetitive tax rates long ago. The UK company tax rate is heading to 17 per cent, France is heading to 28 per cent and if Donald Trump has his way, companies in the US will soon face a tax rate of 15 per cent.

We have also increased the turnover threshold to access the unincorporated small business tax discount to $5 million and the discount rate will be increased to reach 16 per cent by 2026-27.

And by increasing the small business annual turnover threshold to $10 million, we opened up the door for over 90,000 more businesses to access tax concessions such as the $20,000 instant asset write-off, other simplified depreciation rules and a simplified method of paying PAYG instalments.

These are measures the Labor party rejected.

And not just rejected, but committed to reverse; denying the chance for businesses to be competitive with their global peers.

In addition, Labor will also increase capital gains tax on investment in shops, factories, warehouses and businesses by 50 per cent and cut off our fastest growing sources of domestic investors - self managed super funds - from borrowing money to invest more in our economy.

It is sometimes said never get between a Premier and a bucket of money. You could say the same thing about a investment or business opportunity and a Lebanese Australian entrepreneur.

We want to make it easier for small businesses to simply get on with things, and focus on what they do best. That doesn’t just help them, it helps the economy through a boost in productivity.

As I travel around the nation talking to small business owners, they tell me two things. They are thankful of the tax cut because they know just how important it will be in growing their business and hiring more staff. And for some small businesses, it’s a genuine life saver that will keep their doors open.

But they also tell me to keep slashing red tape to allow them to operate freely without the burden of endless paperwork and hoop-jumping.

In the past four years we have cut more than $5.8 billion in business regulation red tape and compliance costs. That is a solid accomplishment, but there is more to be done.

In the Budget I announced $300 million to reward States and Territories who do the right thing, and cut red tape in their jurisdictions.

That’s $300 million, straight into their back pockets - to spend on infrastructure, health, education, whatever they wish - if they can prove they are reducing red tape and regulatory headaches for small business; changes that actually make a difference on the shop floor.

These are critical actions we need to take so we can boost the productivity of small businesses.

Once again this has been opposed by Labor.

In amidst the day to day issues in Canberra that enthralled journalists and social media no end over the last week, an important piece of legislation passed through the parliament.

Yet another genuine win for small and medium-sized businesses.

The Turnbull Government delivered stronger competition law by giving small businesses greater protections against big companies who misuse their market power and stifle competition.

This will target anti-competitive behaviour that seeks to take advantage of the small player, levelling the playing field for family businesses and emerging enterprises that are trying to make their way in the world.

The Australian Small Business and Family Enterprise Ombudsman said the law will “enhance fairness and effective competition.’’

Jos de Bruin, the CEO of Master Grocers Australia hailed the powers “a great triumph” for small business, and said the voices of small businesses are being heard.

Typically, the Labor party was left almost alone in opposing these important reforms.

In addition to encouraging businesses to expand, create new jobs and be free from the burden of regulation, we must also encourage them to innovate.

Innovation is the key to sustained, broad-based growth, because it unlocks productivity and provides a catalyst for new earnings for our economy.

That’s where wage growth comes from; that’s where the growth in export earnings comes from. When we get innovation right.

While as a whole wage growth remains subdued in Australia, the sectors that are experiencing the highest growth have been human services and health sectors, where there is a lot of innovation and research and development taking place, and where start-ups are booming and multiplying.

The Turnbull Government has long championed innovation and encouraged businesses to become more agile. And we’ve certainly put our money where our mouth is.

We have provided tax incentives for early-stage investors, including a 20 per cent non-refundable tax offset on investment and a 10 year capital gains tax exemption for angel investors who invest in eligible innovation companies.

We have provided a 10 per cent non-refundable tax offset on investments made through the Early Stage Venture Capital Limited Partnerships.

And we are allowing small businesses to change their legal structure without attracting capital gains tax liabilities when active assets are transferred from one entity to another.

I am also deeply passionate about our commitment to FinTech and the expanded regulatory sandbox that is a test bed for businesses to develop a wider range of new financial products and services, without the need for licensing. Should they be successful, these products and services may provide small businesses with better financial and business services that suit them better and increase competition in the banking sector.

This is the nursery of great ideas that I believe will support innovation and drive economic growth in emerging sectors of our economy.

Now of course we understand that it has been some time since Australians received a decent pay rise.

There is no way to sugar coat it.

And it is not just a problem we are facing in isolation; wage growth has been weak in virtually every developed economy in the world, as the global economy transitions out of the post GFC funk that has lingered longer than most had predicted.

We have two choices, we can engage in the politics of envy, as Labor have done or we can continue to embrace the economics of opportunity.

To punish businesses and wage earners who already account for the overwhelming majority of tax paid in this country may tickle the ears of those who think you can pay the bills with envy, but at the end of the day it ends up making us all poorer.

The top ten per cent of income earners already pay fifty per cent of tax. And some forty per cent of Australian households pay no tax net after benefits.

We have a progressive tax system and generous social safety net that is designed to protect against inequality.

I am proud of the fact that as a Treasurer and as a Government we have improved the integrity of our tax and welfare system, cracking down on those who would abuse it and working to make it fairer and more affordable, but at the same time cutting taxes for those creating value in our economy.

This is what I love about small business, they always back the economic of opportunity. It’s why I am committed to giving them a fair go, and backing them to lead the economy back to stronger growth.

In the three years to the September quarter last year company profits had been falling on average by 0.2 per cent every quarter.

At the same time, businesses were still keeping millions of Australians in their jobs.

It was the small business owners who dipped into their own pockets; carrying their own employees through what has been a difficult time.

This is why we are backing them to lead the economy to stronger growth, to create more and better paid jobs. Because iwhen they do well, their workers do well.

And we are already beginning to see the fruits of this growth-first approach.

In the past year, 240,000 Australians went out to find a job, and got one.

In the last six months over 210,000 full-time jobs have been created - the largest six-month gain in full-time jobs in 40 years, since they first started collecting labour force data.

The Turnbull Government equals jobs.

That is not a slogan, that is a fact.

Business conditions are now at their highest level since the GFC, while in July, we saw the strongest result in business confidence since early 2010.

So there is a growing momentum we are beginning to see in the economy, that gives us great confidence that the better days I talked about in the budget, are ahead.

Conclusion

Small business owners have never had a clearer picture of who politically is in their corner.

It is the Turnbull Government that remains wholly committed to being a small business booster, not a buster.

And the evidence is our actions, not just what we say.

We are implementing our comprehensive plan to drive economic growth.

A plan to back business, encourage investment and job creation, and spur on innovation.

As a government, we have done exactly what Australians have asked of us and exactly what small business owners have asked of us: Get on with it.

And that is exactly what we will continue to do.