Speech: Eastern Suburbs Business Enterprise Centre & local Chambers of Commerce luncheon with the Hon Malcolm Turnbull MP, Bondi Junction
*****Check against delivery*****
Well it’s a genuine thrill to be here today. I know I’m a Melbourne Storm fan in Roosters territory which makes me a courageous individual, but seriously, it’s great to be here with my friend and Cabinet colleague Malcolm Turnbull.
To her worship the Mayor, thank you for inviting me into the municipality of Waverley. Congratulations on all you are doing, particularly to establish an Economic Development Unit within Waverley Council.
A warm welcome also to all Councillors here today.
Thank you to John and all you do through the business Enterprise Centre.
To Mary Anne, the President of the Chamber of Commerce, and her staff for all their help organising today’s event.
Is anyone here not a member of their local Chamber of Commerce? If not you should join. Our Government is very keen to improve the communication with the small business community and it’s sometimes hard.
The Chamber movement, I rely heavily for advice about what’s happening at the coal face, for insights and for wise council. Joining your Chamber is money well spent.
But to each and every one of you I want to thank you for coming along today. I know you are very busy but I do want to convey my respect and admiration for all that you do.
I do that because I don’t think our nation does that enough. The courage to mortgage your house and your first born, to create opportunities for yourself and others in your community is something that should be admired and celebrated.
I say that for a couple of reasons, I was once amongst you. My wife and I had a small business but I’m different from you in that we failed, we didn’t succeed with our enterprise. In fact, only half of my mortgage relates to my accommodation, the other half relates to my enterprise.
I know what it’s like to be a small business person, every waking moment you are thinking how can I make this business operate better? What opportunities may be within my reach if I could get my business strategy right?
I admire that greatly and that’s why I am honoured and privileged to be the Minister for Small Business in the Abbott Government. Not because I’m a success story that needs emulation, quite the opposite.
My wife and I, we didn’t succeed, we failed. That published declaration that we had a go but didn’t succeed was a profound moment in my life and in Kate’s life.
And I suppose it weathers me for the role that I have now, to have experienced the sorts of pressures, challenges, the market conduct, the emerging trends in terms of technology – well we’ve lived that dream.
And you know what? I wouldn’t have changed a thing but I do bring with me the scars and weathering amongst you.
To this day I can still remember the $4,667 we paid in rent each month.
But I don’t think there is enough who realise that it takes great courage. The risks you take to provide livelihoods for yourselves, others and the community, that deserves greater celebration than it receives.
As Malcolm and I travel around, we meet many young people about to finish school who are not interested in being an entrepreneur.
More worryingly for me, the next generation of entrepreneurs are the sons and daughters of all of you who have that in their gene pool.
But as I travel around I hear too many people saying I don’t know what I want to do with my life, but I know it’s not what Mum and Dad do because they sense it is too hard, too challenging, it’s disconnected to their sense of their own personal ambition.
As they think about writing their chapters of their lives, I wish emulating their parents was part of that but too often it’s not.
This is why we have at the heart of our Economic Action Strategy, the need to energise enterprise.
We need a renaissance in entrepreneurship in our country. Not only because it is the right thing to do but because small business and family enterprise makes that crucial economic contribution and provides livelihoods for citizens right across this vast continent.
It’s also, I think, an essential economic fundamental about the challenges we face in the future.
You know in the 70s there were seven and a half people working for every person in retirement. Today there are five people working for every retiree.
By mid-century there are less than three people working for every retiree in our economy.
So if we are to generate the wealth, the economic growth and the vitality to generate the income to sustain our quality of life and carry forward our ambitions for the future, we are going to have to be spectacularly productive, in a way we have not been for half a century.
When you think about objectives and what we hope for, for this nation into the future, there is no scenario that just sees small business as not only the engine room of the economy, but the innovators, the ones that are showing the way, how to create that wealth and opportunity and those productivity improvements.
Yet we see some of the biggest economies in the world talking about it. The G20 is talking about it. I was in China the other week and APEC is talking about this.
Realising that the renaissance in enterprise would be so much in your hands, and the gift of opportunity would be so much determined by your preparedness to continue your enterprise and that risk taking.
Now governments can’t make all businesses succeed, but we can and we must work to make that economic eco-system that you operate within more supportive than it has been.
We need to remove the headwinds and the obstacles so that you can spend more time working on your business rather than in it, responding to compliance burdens imposed by Government.
This idea of red-tape reduction, it’s not just a convenient line, it is a fundamental precondition to enable you to achieve all that’s possible in your business, and others who are thinking about following in your footsteps.
Do you know when the Howard Government left office; we were 86th in the world in terms of the Government compliance burden gumming up our economy, according to the World Economic Forum.
Six years later we are 128th. There are only 127 economies competing for the opportunities that we want and need to earn to make our own, that are less gummed up than our economy.
How does that prepare us? Well, that’s like saying to Billy Slater get amongst it, but we aren’t going to put lead in your shoes and see if you run any faster.
It’s an incoherence that we need to tackle and that’s why Malcolm and our team are working so hard to achieve those red-tape reductions.
We need to save $1 billion per year and I’ll let you in on a secret, my portfolio, Treasury, needs find a quarter of $1 billion in red-tape savings.
We’ll get there this year and the Prime Minister reminds us in Cabinet that it’s $1 billion each year. So we need to double our efforts time and time again to reduce that very impediment that gums up our economy.
If we are to succeed and achieve all that we can to support your enterprise, we need to get that out of the road. That’s why your red-tape reduction ideas are so important.
That’s why the Carbon Tax abolition was so important. You know for those competing for markets against off-shore competitors, the Carbon Tax acted as a reverse tariff. It was a cost, an imposition that made that contest harder than it needed to be. It wasn’t doing much for the environment but jeez it was making it harder for us to compete.
It landed no where more heavily than small business. You were told that you weren’t going to get anywhere near the compensation, the carve outs or the hush money – you can suck it up or pass it onto your customers.
This came at a time when margins were already so thin, when pencils were sharp, when there were no sloppy profits to be found in our economy there was still a further imposition the sector could have done without.
The Mining Tax, its abolition was crucial. We are attractive as a resources investment destination but not if the rules keep changing.
The pilot boats that go out into the North West Shelf seas that have to keep people alive are made in my electorate, but that contract has to be won every time there is a new tender.
And every time an investment doesn’t proceed because we’ve made it less attractive through some middle of the night mining tax, we miss that opportunity.
And…telecommunications…Malcolm can help you with that. So I guess what I am trying to say is this is a contested space for opportunity, employment, economic growth and increased living standards and all of you are at the front line of it.
That’s why we want to cut red tape, that’s why I am in Cabinet so any decision that is made amongst the 20 people governing the country – I can ask what about the implications for those people that have mortgaged their house to start a small business?
That’s why my portfolio is in Treasury. Its not in the Industry portfolio where it used to be because our entrepreneurial ecosystem, those policy settings about taxes that encourage you to employ, to invest, to way the Competition Laws operate, APRA’s conduct in terms of the availability of finance, ASIC’s position, the Economic Action Strategy the Government implemented, the Debt Strategy – that sees us as a Government, crowding out your opportunities for finance, while we pay $1 billion per month in interest and don’t have much to show for it.
All those decisions are shaped within Treasury. That is the main economic game and that’s why small businesses and family enterprises need to be in Treasury.
That ecosystem can be harsh. We’ve seen some very dominant market players having an influence on competition in our economy. That’s why there is an inquiry into our competition laws and policy.
Our competition laws were conceived 22 years ago and so much has changed in the marketplace since then. But we need to ask the question are they properly supporting businesses big and small to thrive and prosper? Is the contest on merit or its economic muscle? Have the Courts interpreted the laws differently to what the Parliament anticipated?
That’s why this is such an important piece of work, it’s designed to make sure our environment is supportive of small and big businesses.
Unfair contract terms – we have made a courageous decision to examine them and are leading the world in that work. I know when I went and asked my telco provider to hook up our business, I had no choice with the terms, and I had no capacity to negotiate. It was pretty much ‘Bruce and Kate you want that? Then there is the deal.’
Now if it’s individual consumers you were greeted with a take it or leave it contract that had unfair contract terms in it and remedies and relief were available to you. In a small business you don’t have those remedies, yet did I as a small business have any more market power than a consumer? Of course not yet I was denied those remedies and this is an area we want to change.
We are also working on reforms to the Franchising sector. You would have seen the Food and Grocery Code which tries to deal with deal with pressures that are occurring in supermarkets, the way shopper dockets have distorted the marketplace and we are seeking to ensure that’s dialled back so that the smaller businesses have as much of an opportunity to thrive, just like the big guys.
This isn’t easy stuff. This is the stuff Malcolm was alluding to earlier where Government is so much easier if you only talk to the big end of town. The big end of town isn’t where the momentum will come from for our future economic prosperity.
Over the six years of the previous Labor Government, 519,000 jobs were lost in small business. They were a corner store here, an enterprise down the road that had to let go of a couple of staff. It didn’t attract the media attention because there was no BBQ out the front with Union flags waving.
So we have an awful lot to do – getting the budget right, getting a predictable, forward looking agenda that takes pressure off debt and taxes so we can invest in infrastructure.
We need to seize new opportunities and new markets through innovation and Free Trade Agreements because we know small businesses represent a wonderful opportunity. It’s not always easy and that’s why we have had to change the Export Market Development Program, why Andrew Robb and I are working on Export Finance and Insurance Corporation (EFIC) to make sure it meets your needs.
We are working to streamline processes so the bureaucratic convenience of Government is not an impediment to you getting information and the services that you need. But it is and so we are looking at what we can do through our Single Business Service, our Small Business and Family Enterprise Ombudsman.
This is where our Business Enterprise Centres, our Small Business Advisory Service, trying to make sure that support is available and people can find it cause its one of the best kept secrets.
So we have an awful lot to do but we are passionate about the belief it needs to be done and incredibly respectful of all that you do.
To celebrate your enterprise and say to others we want you to follow in the footsteps of these pathfinders.
There is much going on and together we can overcome the economic challenges that make the potential out there our own.
I’m up for that job and I give you this commitment. I will be working as hard for you everyday for your success as you are.
I will know my work is done when Australia is the best place in the world to start and grow a business.
We aren’t there yet, but we are having a red hot crack at getting there. I’m grateful for a few minutes of your time today. Thank you very much.