Transcript – Interview with Harry Frost, Sky News Business
Subjects: Tax changes, competition, G20, small business
Harry Frost: Minister thank you for speaking with us today. Now some of the tax changes that you have announced today, is there a risk that they could be used rather than for changing competition but for using special interest pleading rather than promoting competition?
Minister Billson: The tax changes today were about helping some of our smallest businesses that are involved in tax reporting systems for which they need not be involved. So we’re simply saying if you are, without boring your viewers with the gory details, but if you have no need to report PAYG withholding tax contributions why are you part of that system? If you do not need to complete a BAS why are you obliged to do so? So it’s about right sizing those tax laws and the way they are administered and reported, providing some relief to some 370,000 of our smallest enterprises. So it’s a good step in the right direction, about a $56 million reduction of red-tape and a sensible measure.
Harry Frost: Now some small businesses are already struggling, particularly in the retail sector, now that’s as a result of low consumer confidence in part which many surveys indicate as a result of your governance budget. Would you agree that, or accept that’s the case?
Minister Billson: No I wouldn’t. I’ve seen some improvement in the last few days in consumer sentiment and I’ve seen strong sentiment for many operating small businesses who are looking for a stable and predictable, a sure footed action plan, to recover the budget and get our economy on track. So I think most people in small business know that if you’re starting to pay your overdraft fees on your visa card, you can’t do that for too long and expect to stay afloat, yet that’s what the country’s been doing, borrowing a billion dollars a month just to service the Commonwealths debt. Now, the economic action strategy, the budget’s a key part of that. What I’m finding is the more people realise what’s in the budget rather than some of the shrill negative critique that you’re hearing from Labor and some of its fellow travellers, people are going, well hang on Labor is saying that pensions are cut. They’re not cut, pensions aren’t cut. They’re going to be increased twice yearly as they’ve always been. So, this is where information and factual evidence is important and I think that’s what the budget in fact now requires, getting the facts out there and why we need to make changes to get the budget, the economy and our opportunities for the future back on track.
Harry Frost: Now the fair work commission is looking at cutting penalty rates and what you say may boost business productivity by reducing costs. However, is this going to reduce incentives for employees to work in SMEs and therefore reduce productivity and hurt the consumer confidence more?
Minister Billson: Well, the key thing we’re doing to make sure a career in a small and medium size enterprise is attractive for all of our community is to see the paid parental leave scheme implemented. That’s going to make sure the kinds of paid parental leave benefits that are available in the public sector and in big corporates can also be available in the smaller employers and therefore open up that opportunity for those seeking to balance their livelihood ambitions and goals of having families. So that’s what we’re doing there.
In the area of fair work, as you know, the law says the fair work system and the commission is the educator of where penalty rates are set. That machinery is there. We saw the restaurant and caterers make a well evidenced, well-argued case that poor calibration of those penalty rates actually can lead people to lose an opportunity to work and in fact make businesses quite unviable. So they made that case and there are opportunities there for other industries to present factual evidence about where they believe the rate of penalty rates should be set so that employees are properly remunerated. We can open and have services that consumers want, businesses can look to have a profit, and that’s better for the economy, but that process exists, it’s existed under Labor laws, some industry groups are exercising that process with good evidence and others thinking about following the lead that the restaurant and caterers have taken.
Harry Frost: Now in your speech today you said we need to embrace the CSIRO, however, in the budget the CSIRO have seen job cuts, its seen funding cuts, is this not a contradiction?
Minister Billson: No absolutely not, one thing we have to get past is this siloing of effort in our country. Our scientists have great capacity, they make great insights, great revelations, they should be interacting as the normal course of action with the business community to see what we can do with those discoveries to turn insights into investment and into enterprise.
What I was talking about today was the need for a more collaborative response. Don’t have the entrepreneurs and the businesses in one room and the scientists and those with innovations in their minds somewhere else, get those parties together. That means the CSIRO also has to focus its efforts so that it engages with the business community not only to pursue pure science but to also recognise the commercialisation of their ideas and their insights is an important part of their charter.
Harry Frost: Now in the same vein now people in the tech industry, particular small start-up companies, have criticised the Government for not providing enough support to the tech industry. Now with R & D and tech set to be the next sector in our economy and increasingly important, will the Government be supporting tech, R & D and the tech sector more?
Minister Billson: Yeah, it was great to hear some of the feedback from my speech today where some of the most successful tech entrepreneurs, globally and in Australia, were saying they thought we were on track, getting the incentives right, employee share ownership schemes, getting those that can help build a business to have a stake in the business. We talked also about access to finance and crowd funding again was emphasised to me in the tech space. This is a really important avenue of getting access to equity. From large numbers of people with small investments getting on board and even peer to peer funding, so we’ve got to get that entrepreneurial ecosystem right that is supportive and encouraging of those businesses. We then need to get the regulatory framework right so access to finance, ideas, being able to bring talent to the task, and then see that our whole economy engages with ICT as a key critical strength for our economic future. So, that is what I was talking about today and the feedback was, we seem to be heading in the right direction, with work to do.
Harry Frost: Now a little while ago you released a report which showed that some government departments have really been falling behind in paying off small invoices and this is damaging to small businesses. You set new benchmarks for that. Are departments tracking to pick up their game when it comes to paying these small invoices?
Minister Billson: Over previous years, that timely payment of invoices to small business has improved but it fell off last year. What we’ve said to government departments and agencies, don’t improve the Commonwealth’s cash flow by harming those of our suppliers. So there’s a new discipline in place, pay those liabilities within 30 days or the general accrual interest rate that’s applicable to late tax liabilities for instance will be automatically paid and added to those accounts that haven’t been paid in a timely way to our small businesses. So we’re putting that infrastructure in place, the directive is there, agencies and departments have been told if you can’t pay your bills on time and you have to pay that penalty interest, you’re not going to have your budget supplemented, best thing to do is to pay on time, respect the cash flow challenges that small businesses face, don’t make it more difficult by being a slow payer and a bad customer as the Commonwealth Government. So, I’m optimistic that’s going to see a recovery from a declining timely payment we saw in the last report, and see that really picked up so that we’re a good, dependable, timely payer of our accounts where they’re involving small businesses.
Harry Frost: Bruce Billson, thank you for speaking to us today on Sky News Business.
Minister Billson: Thanks for having me.