A burning issue behind AWU smoke

Behind the fog of the AWU scandal are many policy issues key to the electoral success of the major parties. When, or if, the scandal is settled, voters might just notice Labor's concerted grab for the SME constituency.

There will be new claims and counter-claims over the Gillard/AWU scandal again today. The appearance of a section of the transcript of her interview by senior partners at law firm Slater & Gordon is, at last, new material of substance.

In previous days, Prime Minister Gillard has looked self-assured, batting away media questions, for the simple reason that there was nothing of substance to add to the implied allegations against her.

We will see later today what she says in response to the new evidence – that she did more than fill in a few forms for then-boyfriend Bruce Wilson. Reports today suggest she did, in fact, write to the WA Corporate Affairs Commission to assure the commission that the association she was helping Wilson set up was 'not a union'.

Wilson presumably thought he was doing his former partner a favour by appearing on the ABC's 7.30 program on Tuesday.

In fact, that appeared to convince former Slater & Gordon partner Nick Styant-Browne that client privilege had been lifted on the new extract of the interview transcript. And the new material appears, at first blush, to raise serious questions for Gillard – unlike the politically fanned rehashing of old questions that characterised the past week's interrogations.

Despite fairly steady opinion polling – so far at least – the daily political fortunes of Labor have come and gone like a tide. One moment bursting with confidence, the next sinking away.

Just three days ago, Gillard was putting her shoulder to the wheel of a big gun – a rhetorical attack that would (and mostly likely still will) be central to Labor's 2013 election campaign.

Here's the full line, rolled out in Monday's extended media conference in Parliament House's Blue Room:

"... Australians might be thinking to themselves that they'd like to exercise a vote for John Howard-style Liberals.

"I've got news for those Australians; there are no John Howard-style Liberals anymore. The political party known as the Liberal Party in this parliament is an entirely different creature from the political party led by John Howard.

"John Howard believed in proper costings of policies. John Howard could speak with sophistication about the Australian economy. John Howard, whilst I didn't agree with many of his ideas, had ideas for the nation's future."

She was, of course, contrasting this list with her take on Abbott's qualities.

It is a powerful message, especially if there are any hiccups in Joe Hockey's plan to have Coalition policies costed by the new Parliamentary Budget Office rather than by the Departments of Finance and Treasury.

Hockey has promised to run most policies through the PBO, though some will be subjected to "another process that will be as robust as anyone has ever seen."

That probably means a private accounting firm, though one with a better track record in this area than WHK Horwath, which was found to have breached professional standards in the work it did costing the Coalition's 2010 election promises.

But that's not the only place the 'not John Howard's party' gun will be aimed.

Abbott does indeed have a poor record of speaking on the economy – others such as Joe Hockey, Andrew Robb and Malcolm Turnbull sound much more convincing when general economic themes are being debated.

And in question time, daily now, Labor MPs at the dispatch box repeat that mantra that Abbott has "no plan for Australia".

At this stage of the electoral cycle, that's a pretty cheap line – no opposition lays its plans out to be picked apart nine months before an election.

If Abbott is smart, he not only has policies read to take to the people 'whenever', as he claimed earlier this week, but he will also have room within that 'plan for the nation' to respond to economic changes between now and next September – at this stage the most likely date for an election.

One area where he may have to respond very quickly indeed, is in the policies he's offering to small businesses.

Harvery Norman founder Gerry Harvey warned on Tuesday that retailers are facing the worst trading conditions for 50 years, and that there will be many business collapses in 2013. Retailers might be only one slice of the SME space, but if Harvey is right, many SMEs in their supply chains will also suffer.

A 2013 with accelerating business failures will turn SME owners' eyes to both Labor and Coaltion policies, looking for relief. We already know the main thrust of Labor's SME assistance package:

– Instant asset write-offs for an unlimited number of investment purchases, up to a value of $6500 each

– Loss carry back provisions, so that losses in these straightened times can be used to obtain tax refunds by offsetting previous years' profits

– A small business minister in cabinet – Brendan O'Connor, who Labor will rely heavily on to convince SME voters that the Liberal Party is no longer the 'natural party of small business'

– A $5,000 instant tax write-off for new vehicle purchases

– And a national small business commissioner – former Victorian small business commissioner Mark Brennan, who begins work in the new role in January.

This is putting a lot of noses out of joint on the Coalition side, where shadow small business minister Bruce Billson is working hard to update the extensive list of policy promises from 2010.

Billson thinks that even where Labor has 'copied' Coalition policies, the O'Connor push to win over the pivotal SME vote will be long on rhetoric and short on action. Billson points to the 'SME minister in cabinet' as one stolen policy, and the SME commissioner as another (though the ALP points out it was the Bracks Labor government that created the first state-level SME commissioner).

In reality, both sides of politics are consulting furiously to grant as many SME requests as possible before the 2013 election. The Coalition has promised to slash red tape for SMEs, and has released a discussion paper canvassing various ways to do this.

One proposal – vague at present, given that it's for discussion only – is to convert as many areas of regulation as possible from mandatory paper-work reporting, to a spot-auditing model.

This would see businesses simply having to comply with a regulation, but not report they'd complied with it. Spot audits would police each regulation, with strong penalties for non-compliance.

This is directly analogous to the kind of tax reporting self-employed workers currently do – the ATO wants a statement of your earnings and expenses, but won't look through your shoe box of receipts unless you come up on their audit radar.

All these ideas are being debated by industry groups ACCI, AiG, the Council of Small Business Organisations, and the Independent Contractors Association.

With the summer recess almost upon us, they will have plenty of time to debate before parliament returns in early February.

But the important point here is that there really is something to debate. Labor has been shrewd in giving so much attention to consulting with SMEs – Brendan O'Connor is pulling out every stop to prove Labor 'gets it' in the small business space.

In many respects, the space for this to happen was created by Tony Abbott's anti-carbon tax campaign that so filled the news cycle through late 2011 and early 2012. Some quarters of the Coalition clearly thought that abolishing a 'great big new tax on everything' would be enough to win back the hearts of wavering small business owners.

But both the small business minister and his shadow knew it was much more complex than that. Whatever SME policies the Coalition reveals next year, the landscape has changed.

Labor's well resourced push in the SME space means that the SME constituency is clearly in play.

Of course this, and so many other policy areas, won't really get a look in until the AWU slush fund scandal abates – we may get some clues about how that will be achieved when the prime minister fronts cameras, or parliament, later today.

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