Abbott's red-letter day for enterprise

It was an amazing night as the Coalition explained what they are planning for Australia. The briefing showed the stark choice Australians face at the next election because if the Coalition wins they are planning a once in a generation culture change for the nation. It’s never been attempted before.

And so while the government prepared for its second big tax hike in a month (car FBT and now cigarettes) the coalition was explaining how it would raise $1 billion a year by reducing the cost of bureaucracy, red tape and regulations.

The Productivity Commission has estimated that there is $12 billion to be harvested so the Coalition target is not ambitious but it requires a public service culture change. But that culture change will also extended to the private sector – especially large corporations.

Meanwhile there is also another $1 billion to $2 billion to be raised (after initial outlays) by reducing the size of the public service by voluntary redundancies. The public service has risen by 20,000 in the Gillard/Rudd years. There are 9000 public servants in education and health and they run no schools or hospitals. A large chunk of them duplicate state activity.

But last night the Coalition went much further and explained how it planned to completely change the anti-small enterprise culture of both large corporations and the tax office/treasury.

It asked accountants in the room to help it in the drive to change the tax office and treasury culture, which would not only save government outlays but would start the process of restoring the 400,000 small enterprise jobs that have been lost over six years, partly because both the Rudd and Gillard governments targeted small business.

The Coalition’s problem is that it is one thing to have these policies and another to market them happen. In my view Tony Abbott concentrates far too much on refugees and headline-grabbing blasts at the government instead of what the election should be about – what the Coalition is going to do.

Last night while Tony Abbott was blasting Kevin Rudd somewhere in the country it was shadow small business minister Bruce Billson and Senator Scott Ryan who were explaining what was going to happen. Even the Independent Contractors Association, who arranged the briefing, was staggered. If the Coalition wins (and there is no certainty) Billson will be elevated to the inner cabinet and with treasurer Joe Hockey will set about changing the way both the tax office and treasury works. It will not be that hard because professional public servants get the message very quickly.  

Almost overnight it will be easy to get an Australian Business Number and register a business. The tax office will be split into two divisions – prosecution of tax breaches and normal collection. The current tax agenda to persecute small enterprises and independent contractors, which sometimes sees tax officials breaking the law in their zeal, will be totally reversed.

But large companies are in for just as big a shock as the tax office, treasury and the rest of the public service. The Coalition policy of extending the fair consumer contracts legislation to small enterprise means that large companies must review almost every contract with smaller enterprise suppliers that they have drawn up. Normally their lawyers insert “unfair” provisions that try to take advantage of the large organisation’s power. Government contracts will be subject to the same review. Large companies will fund the parental leave scheme. And there will be no major changes to the industrial relations legislation in the first term.

But given what’s about to happen to mining investment and employment, Coalition policy is going to be about creating jobs in the area where most jobs exist – smaller enterprises. In the private sector small enterprises employ around 7.5 million people (including the owners) or about 65 per cent of the work force. The public service and large corporations each employ about 1.5 million. If enterprises employing up to 100 people are included in the small sector, the small enterprise employment rises beyond 75 per cent.

If larger companies want to be more efficient in their labour force they need to look at the army of local people who can sub-contact for them. The human resources departments of large enterprises will need to be turned upside down and start to think about productivity and not industrial relations laws. It’s all about the Australian culture change if the coalition wins.