Labor’s decision to release only a bare-bones small business policy statement – consisting of previously-announced Henry Review tax policies and an R&D tax credit scheme announced in May 2009 – is as baffling as it is disappointing. While Labor has introduced some solid SME policies while in government – including the introduction of a super clearing house, simplified reporting standards and the excellent investment allowance which was part of its GFC stimulus measures – the lack of an election platform suggests it has run out of ideas. All the Government can point to for SMEs is the cut in the company tax rate – although two-thirds of small businesses won’t benefit.
The Coalition on the other hand has presented a reasonable package. The promise to engage with regulators to find ways of improving small business access to funding (by changing banking laws to make it more attractive for banks to lend to SMEs where property is used as security) highlights some fresh thinking.
Less exciting are promises on attacking red tape (which should be taken with a grain of salt – every government promises this) and a promise to introduce unfair contract protections for small business which will need to be carefully thought out. The Coalition’s promise to scrap the Enterprise Connect program is also disappointing, although some doubts have been expressed about the scheme’s usefulness.
It is also positive to see the Coalition has ruled out changes to independent contractor tax rules; Labor’s statements that changes are not current policy have been less than equivocal.
The Coalition’s promise to put the small business minister in cabinet is long overdue and it is hard to understand why Labor hasn’t matched this. Small Business Minister Craig Emerson says he already has enough of a voice in Government, but surely this Labor could send an important signal to the SME community.
The Coalition has also promised to create an office of the Small Business and Family Enterprise Ombudsman. While the Liberals say they will consult with the business community and sections of government before deciding the ombudsman’s precise role, the office will be designed to act as an advocate for SMEs within government, and a single point of access for small business programs. The plan is clearly still in its infancy, but the idea is good.
Labor says it has improved small business representation through the appointment of a small business commissioner at the ACCC (the excellent Michael Schaper) and the establishment of the Small Business Advisory Committee, although this group will only meet annually.
The nation’s fixation with boat people is difficult to understand, given the tiny size of the problem, and this obsession has allowed the two political parties to effectively avoid a debate on population.
However, both parties appear to be moving towards a “small Australia”, with Tony Abbott brazenly setting an immigration cap (which Labor has said it isn’t likely to breach). From a business point of view, this is worrying – skills shortages will get worse, and immigration will be an important part of the solution.
Promises to turn back boats and set up processing facilities on Nauru or East Timor have created a smokescreen around what is an important debate.
There has been nothing new from either side in the areas of innovation and research and development, which is extremely disappointing.
The Coalition has released a 15-point policy agenda for innovation and science, but sadly it lacks much in the way of vision and actually includes some hefty cost cuts.
There are rather vague promises to improve assistance to the automotive industry, the TCF sector and the venture capital sector, plus a commitment to “refocus” the current flagship innovation program, Commercialisation Australia, to make it look more like the Commercial Ready scheme Labor axed in 2008.
Most worryingly, there is a promise to “streamline” industry assistance programs into a new body called Business Assist, which will combine bits of AusIndustry and the Labor Government’s Enterprise Connect scheme. But incredibly, the Coalition says services from this new body will be offered on a “fee-for-service” basis.
Labor’s key policy is its still-yet-to-be-introduced R&D tax credit scheme, which was announced in May 2009. However, there has been sharp criticism from several industry groups and experts about the complexity and narrowness of the scheme. The Coalition wants to retain the current scheme, although it has promised to review it.
One saving grace for Labor is its NBN plan – this will at least assist fast-growing companies bring new products to market.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
