Fantastic or forlorn? Business owners divided on Coalition win, but wage growth concerns trump all
With Scott Morrison clinching a surprise election victory, the feelings of Australian small-business owners range from ecstatic to despondent.
With Scott Morrison and the Coalition clinching a surprise election victory on Saturday night, the feelings of Australian small-business owners range from ecstatic to despondent.
Prior to the election, SMEs faced a tough decision. Labor espoused broad and bold changes to cornerstone areas of Australia’s economy, such as tax, climate policy and wage growth, but an uncharismatic leader and unpopular business policies failed to capture the SME vote.
And while the Coalition was scant in ways of new policy, the commitments they’d already passed for small businesses, coupled with the overall perception of the party as strong economic managers, placed it as a far more attractive offering for business owners.
The government is currently looking like it will hold a majority in the lower house with about 77 seats, but may face a fight to get policy through the Senate with Labor, the Greens and Centre Alliance looking like a potential allied group with an ability to sway the agenda.
With these numbers forming, it seems as if we’re almost back to where we were at the end of the 2016 federal election, and indeed much of the sentiment among SMEs is business as usual.
A number of small-business owners contacted by SmartCompany this morning said they had no strong feelings either way about the election result, with most just wanting to get on with the job as they always have.
A “mandate to keep burning coal”
However, some had serious concerns about Australia’s future under a Coalition government. Kate Morris, founder of online beauty retailer Adore Beauty, told SmartCompany she was worried what the Coalition’s win would mean for climate change policy in Australia.
“The outcome took everyone by surprise, and whoever’s doing the polling needs to take another look at their methodology. I don’t think we can say that anyone can accurately predict elections anymore,” she says.
“My biggest concern about the Coalition’s win is that it will be taken as a mandate to keep burning coal and keep doing nothing about climate change.”
“As a business owner, a Labor win may have made things more challenging for us from a business sense, but I would have been willing to trade that off for someone who would have taken real action on climate change.”
Morris says she’s now focused on making her voice heard to government, saying that if the Coalition wants to pitch itself as a party for business, it needs to address the concerns of business owners worried about climate change.
And while it might mean good things for Adore Beauty in the “immediate financial sense”, Morris dismisses that benefit, saying Labor’s plan for wage growth would have been more of a boon for retailers, as it would have led to more money in the pockets of consumers.
“As much as they say they are, I’m not convinced the Liberals are better economic managers than Labor. I also hope we can see the Coalition move away from the right-wing nationalist part of their party. It’s not what our country is about, and it’s important we stand up to that,” she says.
Coalition win “fantastic”
However, for other business owners, the government’s re-election is music to their ears.
Ray Graetz, owner of transport company Coastal Transport Services, tells SmartCompany the Coalition win is “fantastic”, and something he’d been predicting all along.
“I was in the pub with a few mates on Thursday night saying Morrison would win. I’ve never believed the polls and I didn’t believe Australians could be so stupid to vote for the Labor Party,” he says.
“Their policies would have been disastrous for our economy, and I was pretty concerned about the changes to franking credits.”
Graetz says he’s “not a huge believer” in climate change, but thinks Morrison has the right idea with keeping Australia’s policies in pace with the rest of the world, and says the win gives him a bit more confidence around the future of his business.
“I’m always pretty confident in business, but this certainly gives me more confidence knowing we’ve got a good government in place,” he says.
“Most of our workers were supporting the government rather than the opposition, as most of them don’t believe that people are getting underpaid and all that bullshit.”
Wages the kicker for small business
It’s these concerns about Labor’s promises of wage reform which seemed to cut deep into the small-business psyche all over the country. For SMEs barely breaking even, the prospect of higher wage costs was one many couldn’t stomach.
Labor’s proposal ran on the line that wage growth would “flow back into the tills of small business”.
Tenth-generation small-business owner Stephanie Oley told SmartCompany last week, she believed SME owners were stuck between a rock and a hard place with the two major parties, and speaking today in wake of the election result, she believes a lack of vision around everything from Labor’s environmental policies to their tax reforms was problematic.
But for many small businesses, the issues around wages made for a particularly decisive “thanks but no thanks”.
She says many members of business communities in inner Sydney were already concerned about higher wages, using the example of a pub owner paying their bar staff $34 an hour due to “complex” wage arrangements, meaning those with more drink-making skills are entitled to a higher rate, despite the bar not necessarily requiring those more complex skills.
“They are already paying more than they technically need to. What would mandatory wage rises do in such a setting? It would probably result in people being laid off, and the existing crew becoming stretched,” she said.
“Fighting for wage rises in an era of practically flat inflation isn’t the answer because if businesses can’t afford to pay those increased wages, then everyone suffers.”
A prominent Hunter Valley winemaker who’s been operating in the region for more than 20 years echoed these concerns to SmartCompany, believing Labor’s promise to revert penalty rates would have been dire.
“When we still had to pay double-time-and-a-half on public holidays, we had to close the cellar door as it wasn’t worth our while. You’d be paying $52 per hour for an eight-hour day, more than $400 all up plus super, yet total sales for the day might be $470,” he said.
“Many restaurants in the Hunter suffered the same problem, and simply closed for the day.
“Currently we’re paying double-time and sometimes still make a loss if it’s a slow day. But there’s no way we’d be open for business if the conditions went back to double-and-a-half. Same goes for hundreds of small businesses across the Hunter.”
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