I am becoming very bullish about the medium term future of non-mining Australia. I don’t think the nation fully appreciates the depth of the dramatic change that is about to take place in the business community assuming the Coalition win the election. And it is change for the better.
Combine this with what is happening with cloud computing and we are set for beneficial developments at an unprecedented rate. Unless China falls over or there is some other world crisis, that change will see a resurgence in small business activity and employment, which will drive the nation forward in the medium term. The stock market already senses the forward momentum that is ahead post the election.
The Coalition has now publicly confirmed the content of their earlier exclusive briefings to Business Spectator about what was ahead (Abbott’s red-letter day for enterprise, August 1), so I will start with the effect of the cloud developments on Australian small and medium sized business.
Yesterday I was yarning with Tim Reed, CEO of MYOB, who explained that cloud computing enables small enterprises to run their ledgers simultaneously with their bank account – no need to do the books separately at the end of each quarter. Moreover, accountants can now log into their small business client’s daily updated ledger and give them real time advice instead of advice that is three to six months old. This will cut down business failures because it makes it that much easier to run a small enterprise, albeit still hard. (MYOB offer that cloud service at the moment and I am sure there are others).
Combine that boost with the Coalition plan and we are looking at a massive improvement in the landscape for the groups that employ most of our labour.
The Coalition are at last announcing to the nation what they intend to do. I have selected eleven items from the press release issued by Tony Abbott and small business minister Bruce Billson.
I have attached a comment to each policy.
“Cut $1 billion in red and green tape costs every year”. COMMENT: That’s a monumental and nation changing task, to which we will hold the Coalition accountable. However I know that they have done an enormous amount of detailed work in this area. Every time a regulation goes so does a public servant or two and small enterprise morale goes up.
“Undertake an independent ‘root and branch’ review of the competition framework”. COMMENT: Not specific enough. May get snowed.
“Extend unfair contract protections for small business”. COMMENT: This was a 2007 Rudd campaign promise which he by-passed. It is an enormous boost for small and medium sized enterprises but means almost every large organisation must re-look at all its smaller enterprise contracts. Most will fail the “fair” test.
“Defer by two years the increase in compulsory employer-funded superannuation”. COMMENT: Hopefully the Coalition will stick to its word and the deferral will only be two years.
“Help small business attract good workers by providing their employees with access to the Coalition’s landmark paid parental leave scheme”. COMMENT: That’s a huge boost to small enterprise.
“Remove from small business the requirement to administer the government’s paid parental leave scheme”. COMMENT: This was a stupid administrative burden imposed by the ALP, which really hit small business confidence. If the Coalition makes this change quickly it will be a big boost to small enterprise confidence in an Abbott government.
“Protect the rights of independent contractors and the self-employed”. COMMENT: This is how small (and large) business can overcome some of the burdens of the industrial relations laws. The ALP government encouraged the tax office to ignore the nation’s independent contracting rules and attack independent contractors in a way that was not legal. It was a national scandal. Some tax officials may need to retire, although in fairness to the public servants, the government has been encouraging the tax department and other regulators to break the law in their interpretations.
“Improve small business access to government contracts”. COMMENT: Easy to say but hard to do. The public service culture is so different to small business that they are lost in dealing with them. It will require a modern day equivalent of a public service kneecapping to change the culture, which the Coalition appears ready to do if required.
“Ensure government agencies pay all small business bills within 30 days”. COMMENT: The public servants can do this but will give a million reasons why it can’t be done. Treasury will lead the pack. If the Coalition is to change the culture of the nation, as they plan to do, any public servant who causes problems on this front needs to look for another job. It will be a huge boost to the economy.
“Reduce the company tax rate by 1.5 per cent to a new rate of 28.5 per cent”. COMMENT: Actually that helps medium sized business rather than small business. Smaller enterprises are actually tied to personal tax rates because they pay themselves salaries and/or interest on loans.
“Reject Labor’s $1.8 billion FBT hit on cars”. COMMENT: That’s an important help although the biggest users of the FBT concession are government organisation employees and charity workers.
There are many more policies but these are the main ones. The only question is whether Tony Abbott will allow Bruce Billson t carry out the task. I think he will. But of course the Coalition must win the election.