Malcolm Turnbull warns of Labor lack of business experience

Malcolm Turnbull has warned that Labor MPs do not have the necessary life experience to understand small business issues.

Malcolm Turnbull. Picture: Kym Smith.

Malcolm Turnbull has warned that Labor MPs do not have the necessary life experience to understand small business issues, arguing the Opposition is run by former trade union officials and political apparatchiks.

The Prime Minister said the lack of business experience on the Labor benches was one of the reasons why the Rudd government had “mishandled” the global financial crisis and warned the party had only drifted further to the Left under Mr Shorten’s leadership.

By contrast, Mr Turnbull said the Coalition party room was composed of people from a range of different backgrounds adding that it was difficult to think of “any profession or occupation that isn’t represented.”

“The Labor Party is increasingly made up of a very homogeneous mix of trade union officials and political apparatchiks. And so they don’t have that business experience,” he said. “I thought it was a big problem with the previous Labor government. I thought that was one of the reasons they mishandled the global financial crisis so badly – because they didn’t have any business background in their cabinet.”

Mr Turnbull said it was important to understand the “scale of the threat that Bill Shorten represents to our nation and to our economy and to the opportunities for young Australians.”

“He is running now on the most Left wing platform we have seen from the Labor Party in generations. He wants to increase taxes on small and medium business while we are reducing them.”

“He wants to increase taxes on family businesses. He wants to increase taxes on property. He wants to increase taxes on investment all the while saying that he’s trying to do something about inequality.”

“You don’t build a strong economy by pulling people down. What you’ve got to do is make sure you’ve got equality of opportunity.”

Mr Turnbull accused Labor of doing nothing to encourage enterprise or investment, saying Mr Shorten did not have “one policy to encourage one business to invest one dollar or hire one employee.”

Mr Turnbull was responding to The Australian’s analysis this morning revealing that only three Labor frontbenchers had listed their prior experience working in small business in their previous work history.

He said there was a vast gulf between Labor’s “anti-business, anti-aspiration policy of higher taxes” and the position adopted by the Coalition which was to back enterprise and growth.

Shorten defends trust tax plan

Earlier, Mr Shorten attempted to mend Labor’s fractured relationship with small business arguing that a controversial plan to hit discretionary trusts with higher taxes is “not an attack on small business.”

In an address to COSBOA’s National Small Business Summit, the Labor leader defended the party from growing attacks a Labor government would set the sector back.

“I don’t have a view that for workers to do well that employers have to badly,” Mr Shorten said.

The address came in the wake of reports the opposition’s front bench lacks “real world experience” with just three members with experience in small businesses, and growing attacks on Labor’s plan to crack down on individuals and small business owners using discretionary trusts to cut their tax bill.

In response to the reports, Mr Shorten reflected on his own experience with business, first watching his father graduate from a marine engineer working on the docks to a manager and then his own career history starting as a paperboy and working in a butcher before joining the union movement as a negotiator.

“I don’t come here today claiming to be an expert on small business. I’ve tried to explain where I come from and how I think … but the best contribution I can make for small business is to enable them to pursue their own opportunities.”

But his strongest comments were reserved to defend a Labor plan to slap trust distributions with a 30 per cent tax rate, which is predicted to affect more than 200,000 small businesses.

Labor has said the plan will raise $17 billion in a decade and will only affect 98 per cent of tax payers. However, Mr Shorten has admitted that small businesses make up two-thirds of trusts affected by the change.

“This is costing the budget tens of thousands of dollars in each case. that income splitting loophole we think now is the time to bring an end to,” he said.

“We need to make hard choices about keeping items of the pharmaceutical benefits schedule or hard decisions about increasing the costs of country kids to go to uni, and then when you look at these discretionary trusts being used in this way, I have to say in the priorities game, this is where we have chosen to look.”

Mr Shorten emphasised the policy would not affect a small business’ ability to use trust structures for asset protection, nor would it disadvantage small businesses operating as a trust who employ family members who genuinely work in the business.

But the policy was necessary to mend a near half-a-trillion dollar gross national debt, he said.

The leader also sought to appeal to the crowd with promises to crackdown on phoenix companies and black economy operators, and a tax cut on businesses turning over less than $2 million.

A Labor government will also assess government procurement policies and consider beefing a quota of contracts to be allocated to the SME sector, he said, in addition to providing more support for families and businesses struggling with NBN implementation costs.

Ahead of today’s COAG Energy Council meeting, Mr Shorten again pressed the need or a national clean energy target to lower power bills for households and businesses.

“You cannot be fair dinkum about lowering energy prices in this country unless you have a clean energy target,” he said.