The guys in the engine room need clarity

Labor has never been as interested in small business – the engine of the economy – as over the last two years, while the Coalition intends to address some of the sector's biggest issues. But both urgently need to provide more certainty for small business people.

In this election campaign we have seen a greater focus on small business people than at any other election. Both of the main parties have made strong promises to address key issues around support services, red tape, competition policy and contract law. The only area which has been mainly ignored is workplace relations. While disappointing, it is something to focus on with the incoming government and opposition and those controlling the Senate.

Small business people are by their nature confident, optimistic and constructive; otherwise they wouldn’t go into business. The current issue for the small business community is a lack of confidence plus uncertainty about the future. This should be a concern for all the parties – we are after all the engine room of the economy.

So after the election we want small business people to get back the confidence they need to help focus on their business, to develop their plans, to improve their marketing and communications and develop new products and have continuous improvement in red tape relief. Then they can take advantage of what an incoming government should bring, particularly around certainty for the future.

To help comparisons The Council of Small Business Australia has a comparative spreadsheet of the major parties’ policies on our website. In previous years this spreadsheet would be small and easy to understand but, wonderfully, with the focus on small business in this election we have a busy and complicated spreadsheet that needs some commentary.

Let’s look at what the parties have to offer.

If elected into government the Coalition intends to address some of the biggest issues facing small business people: competition policy, contract law, compliance costs and representation of the small business community on key advisory and regulatory agencies. Interestingly many of these promises do not have any significant budget costs associated with them; they are straight policy changes that will hopefully take away the protections from competition enjoyed by the Coles-Woolies duopoly and remove the protection that big business, particularly landlords, have from litigation. Unfortunately as yet these are not promised changes, just reviews. We know that the Shopping Centre Council, the Franchise Council and the supermarket duopoly, along with their supporting billionaires and millionaires, will be fighting hard to keep their protections in place. The Coalition’s policy to remove small business from collecting superannuation is important and will benefit not just business people but also the members of funds and the funds themselves through decreased operating costs.

If re-elected Labor has a raft of policies around support for small business people, streamlining current processes and maintaining representation. We like their current policies introduced over the last two years that they intend to maintain. This includes the instant tax write-off, now increased to the $10,000 recommended in the Henry Review of Taxation, the loss carry back provisions and instant depreciation of $5000 for purchase of a car. The recently announced program of support for businesses in suburban areas is also welcomed, especially since it is based on the Melbourne Hub model of business support which is dynamic, focused on people and highly successful.

The truth is that policy and promises are one thing, the reality after an election is often another. Promises can change as budgets are reviewed, ministerial positions are jockeyed for and ideology rears its (very) ugly head. In the world of small business ideology rarely creates anything but confusion, complexity, emotions and a focus on big business and unions rather than on the needs of the majority.

So who do we have in the party rooms that will ensure the small business policies and changes are implemented?  A significant strength of the Liberal Party is Bruce Billson, the member for Dunkley. Billson is highly regarded and well respected by small business groups and supporters. He is disliked by the enemies of small business people, particularly the Shopping Centre Council and the Franchise Council. This is another sign of his pedigree as both those organisations prefer business models where they are protected from litigation and where they can use their power to protect their own interests at the expense of small business people. 

Billson is passionate about small business and understands the real issues that we face. He understands that we are people first and we know he has the ear of Tony Abbott and will present arguments and fight hard for our rights. Importantly he has ministerial experience and would also be sitting at any Coalition cabinet table. He gives us confidence that we will not revisit the Howard years, where promises were made to small business people but big business needs and influence won out.

An example of where we expect some fight from Billson is over the recent announcement by Joe Hockey that some of the good policies of the Rudd/Gillard government – the instant tax write-off, the vehicle depreciation and the loss carry back – would be removed by a Tony Abbott led government. The reason for this is that the MRRT will be scrapped and all the programs that were to be funded by the MRRT will also be scrapped.  We understand that savings need to be made but this move is counter-productive and a disincentive for small business to invest, adding to their confusion and lowering their confidence. If Tony Abbott becomes prime minister we hope he will reconsider this decision. We certainly expect Bruce Billson to fight to have the policies remain in place.

Under Julia Gillard the Labor Party changed its approach to small business. Our sector has never been as engaged by Labor as over the last two years. We are included in the most important forums and panels and there have been changes in the tax system that have been targeted at small business rather than all business, which is a nice change. The position of Minister for Small Business was moved into Cabinet and for the first time we have a Federal Small Business Commissioner. It has been disappointing, however, to experience Labor’s lack of consistency with constant changes to the position of small business minister and their inability to find a real small business champion like Bruce Billson (Brendon O’Connor did a very good job). But more worrying is the influence of the left faction of Labor. For example the current penalty rates are far too high; the lack of focus on retail domination by the supermarket duopoly needs to be explained; and for reasons I cannot fathom the unfairness of contract law is still ignored.  The changes in superannuation under the Labor policies around MySuper will hopefully make the superannuation payment process easier. But we have no confidence at all that the industry superannuation funds will ever understand small business needs while their boards are controlled by unions and big business associations. Simply put, we need to be removed from superannuation collection.

We have believed for some time that in the main the policies of the Coalition are the better policies for small business but the removal of the loss carry back, instant tax write-off and depreciation on vehicles is not useful, adds costs and worst of all creates confusion. In the end the Coalition has good policies around red tape removal, competition policy and contract law. The Labor Party is focused on making process easier, providing tax benefits and giving quality support to small business in the suburbs. 

Also, Bob Katter and Nick Xenophon are, and always have been, great supporters of small business people. They understand small business like Bruce Billson understands small business. More power to them. Meanwhile, the Greens have Senator Peter Whish-Wilson from Tasmania who has a wealth of experience in business, big and small, and runs his own family winery business. He seems to have focused his party more on business than previously thought possible.

Peter Strong is the executive director of The Council of Small Business Australia.

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