Eden-Monaro Small Business Forum, Catalina Country Club, Batemans Bay
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Thank you all for inviting me along tonight and for all contributing to your local community and the economy. A warm welcome to various Chambers of Commerce Presidents who have come along tonight. I know you do your jobs for all the glamour they attract, but seriously it’s a really important role and a huge commitment of time and I thank you.
I say it for a number of reasons. My electorate is on the Mornington Peninsula down in Victoria and I live in the Riviera capital of Frankston. I was too short to be a hood so had to choose another career and ended up in public life.
It’s interesting, my electorate is 40 kilometres out of Melbourne and small business and family enterprises are our economy. If it wasn’t for courageous people like you, our communities wouldn’t be full of opportunities and livelihoods and there wouldn’t be much economic activity down in my part of the world.
Now I’ve had a go at running a small business but I’m not here to tell you what the answers are cause my wife and I, we failed and I have an enormous mortgage to show for my enterprise.
I understand the joy of pillow talk of cash flow at night, about making payroll, about the $4667 monthly rental costs that we used to pay.
So I don’t profess to be the messiah of all things small business but what I can offer you is an authenticity about being on that journey and knowing what it’s like.
I know how hard it can be to get finance from banks, the way big and powerful business partners use contracts to give small business a hard time which leads me to unfair contract terms and competition laws. I bring an understanding of these issues to the table.
What’s important here is that the Prime Minister has seen how crucial small businesses and family enterprises are to the economy, so my role isn’t at the kids table, it’s at the adults table, in Cabinet. Whenever there is a discussion, like today about policy settings and plans for the future, I can make sure small businesses and family enterprises are front of mind, not an afterthought.
Those opportunities are embedded in our thinking and we’ve even moved the small business policy area out of the Industry portfolio, which has got an awful lot to do with big industry sectors. You’ve heard what’s happening in the car industry, in the metals industry, hydrocarbons, gas and mining spaces. Small business is really crying out to be heard in that space and in my view, not being heard well enough.
We’ve moved the small business policy area into the Treasury portfolio. For those that follow Government, Treasury is one of the three central agencies which have a big influence right across the Commonwealth. As Treasury was doing it’s analysis on what’s happening in the economy, our future prospects, our trajectory as a nation – small business considerations were front of mind for them.
We were concerned that too often there would be a discussion of ‘the economy is growing at trend growth’. Well that might be right, but that belies what is really sitting beneath the macro figures. If you’ve got the mining industry powering along, that can lift that overall economic performance. But it can also mask what’s been going on in the small business part of the economy.
Now over the last six years there were 412,000 jobs lost in small business. 412,000. That’s about 1300 every week. Now why didn’t that get the attention it deserves? Well mainly because it was two jobs here, three over there or it was ‘only’ a family business that now has one fewer staff members.
It might be the journey my wife and I went on where it got to the point where after feeding our business for so long and accumulating so much red ink, we had to say to our team it’s done. We had to admit failure. We had to say to those suppliers that relied on us as their channel to marketplace and our team that we can’t keep doing this.
That doesn’t hit the headlines, but that’s the challenge and that’s the journey that many small businesses have been on, yet it’s been masked by the buoyancy of the mining industry. The mining industry is changing and it’s not so much about construction of new mines where jobs flow, its about operating those mines.
You know there’s a huge difference in the amount of people employed in a mine through out its different phases, so our economy is actually transitioning as well. What we have been saying is while we have been comforted by the strength from the mining industry, other changes have been taking place.
Too often, as I travel around the country, its young people who are often your kids saying I don’t know what I want to do with my life but I’ve seen how hard Mum and Dad work and I don’t want it to be that.
Instead, its people looking for a salary based position where someone else worries about paying the bills, where someone else is focused on what those investment opportunities are looking like, where someone else is putting their house on the line to get access to finance.
What we’ve been saying is we need to be more in tune to that challenging process and that enterprise that has driven and grown our economy for ages. Yet right now it’s been under great pressure.
So at the last election we said well 412,000 jobs have been lost with barely a whimper from the previous government. My view – they tended not to be union jobs.
There was a change in the opportunity for private sector work. When the Howard Government left office 53 per cent of every job in the private sector was in a small business. Small business was the major employer. But over the last six years that’s changed and it’s now down to 43 per cent.
Our task is to arrest that decline, not only because it is the right thing to do but to improve local economies and build livelihoods. If the engine of smaller enterprises is having a cylinder taken out of it, then the opportunities for livelihoods is going nowhere.
That’s why we’ve said what we need to do is arrest that decline and frankly try to nurture a renaissance in enterprise so that those people with that enterprising outlook are prepared to take a chance, are inclined to employ someone else, to reduce headwinds, to save the red-tape burden that has grown out of proportion and is gumming up the economy and eating more and more into the precious time that enterprising people have. That’s what we have been focusing our energies on.
We went to the last election with a comprehensive plan and at the heart of it was trying to remove those impediments. We can’t make every small business successful but we can and must pull the head winds out of the way, get rid of the obstacles, take away the things that are gumming up your opportunity to succeed and prosper and through your enterprise, creating livelihoods for yourselves and others.
We saw that with getting rid of the carbon tax. We are beavering away on that because it’s an $8 billion hit on the economy, it damages consumer confidence and it adds to the cost of doing business.
In smaller businesses particularly where there is no compensation or carve out and that’s why we want to get rid of it. The mining tax might not mean anything to some but you probably don’t realise that those gas operations off the North West Shelf in Western Australia, where those courageous men and women go out on those pilot boats, well those boats are made in my electorate of Mornington. It couldn’t be further away from the North West Shelf but is a good example of how mining services and the opportunity to win that chance to invest in the mining industry.
The red-tape burden-21,000 new and amended regulations were introduced in the last six years. It was like no problem couldn’t be solved without more red-tape. Yet where was the rigour to say does this problem actually need that kind of solution?
There is a cost to compliance and red-tape which lands most heavily on small businesses. When there is a discussion about a regulatory measure, why is it big government talking to big business and big unions when 96 per cent of our enterprises are small businesses?
Where is the cost benefit analysis? Where is the decision that that impost is justified rather than just doing it because it looks like government is doing something?
We went from 68th to 128th in the world in terms of government regulation which has had a dramatic affect on our economy. The rest of the world is saying ‘should we invest in Australia?’ Geez that’s a lot of lead in the saddlebag.
Small businesses are saying that they’ve been through this margin free time of a challenging economy, where we couldn’t push our prices up because consumers didn’t want to pay more yet we had these pressures in our business, including the cost of compliance obligations. That’s why we are taking $1 billion of red-tape out of the economy with $730 million of this being progressed through the Parliament at present. The $730 million includes straight forward, common sense things like if you are an employer and one of your team takes maternity leave, why do you have to be the pay clerk for the government’s scheme?
Fourteen separate transactions And a $30,000 fine if you get it wrong. There is no benefit to business handling that, it’s just an impost. That’s just one of many examples that we are winding back and changing.
I also look after the ACCC where the Government has started an inquiry into competition because the current laws were conceived 22 years ago. Big supermarket chains back then had about a 40 percent share of the market and now it’s 80 percent.
The economy has changed including the way business tactics are rolled out, the impact of technology, the fact that the law in someway hasn’t behaved the way the parliament thought it would – which is why it is now timely to make sure that competition toolkit is right. So that when there is competition between a big and a small business, success is based on merit, not on muscle where efficient businesses big and small have a chance to thrive and prosper.
It extends into the unfair contracts protections. I know when we were setting up our small business and I went into the telco saying we would like some services and they said ‘here it, is-take it or leave it. These are the terms and conditions and we reserve the right to vary them.’ As an individual consumer if those provisions are unfair you can seek relief from them through the ACCC.
But as a small business you can’t. You have no more market power as a small business person than a consumer, yet the protections against you are being exploited. These are areas where we think change is needed.
We recently announced a suite of changes to the franchising code to stop any unilateral changes to the relationship between the franchisee and the franchisor. These are practical measures along with government procurement and many others.
I’ve had deep and meaningful chats with the Tax Office and ASIC to ensure they can be more supportive rather than having just a compliance and enforcement focus.
I’m really thrilled to be here tonight because I love what I do – it’s a rare privilege and a great opportunity.
In my community the livelihoods that my citizens look for come from people just like you. They count on others to take the risks, display the courage, mortgage their house and their first born and have a go.
Our view is if people in this country are prepared to have a go, the Commonwealth should be there to make it as painless as it can be, supportive when we reasonably can be. And above all lets not see businesses fail because the policy is bad. If it’s because the competition is stiff but it’s fair, that’s business.
But where there is lead in your saddle bag for no good reason it’s our job to get rid of it. I’m keen to hear about your field evidence so please send it my way. Thank you for having me.