Opposition Leader Malcolm Turnbull has used his official reply to the federal budget to call for help for struggling small businesses, proposing measures to improve cashflow and help businesses restructure after insolvency.
Turnbull said many of his ideas to help SMEs came after a listening tour he conducted with businesses around Australia.
“All of them have a modest cost – proving you don’t need to borrow recklessly to do the right thing by small business,” he told Parliament last night.
The centerpiece of the Coalition’s small business policy is a proposal to allow SMEs to “carry back” tax losses. Turnbull argues that if a business makes an operating loss this year, they should be able to carry them back against previous year’s profits and recover a refund of up to $100,000 against taxes paid over the past three years. Similar rules have been introduced in the US to help small businesses whether the downturn.
But Turnbull threw in a surprise into this budget reply by calling for reform in Australia’s insolvency laws.
“Australia’s insolvency laws do not encourage the reconstruction and rehabilitation of businesses that hit hard times. Too many jobs and too much value is lost when viable businesses are wound up or their assets sold in fire sales.”
In recent months a number of insolvency experts, including Restructuring Works director Cliff Sanderson, have called for changes to insolvency laws to give companies a better chance to turn their situation around. He suggests Australia should consider moving towards the British model under which banks are unable to appoint receivers to a company.
While Turnbull did not detail the changes he would like to see, his says the Coalition would “support a change to our laws which will emphasise reconstruction of these businesses”.
“Reform in this area, in these times especially, could save thousands of jobs that would otherwise be lost.”
Turnbull also suggested re-targeting existing support for apprenticeships to ensure that those businesses that take on apprentices receive most funding in the first two years of the apprenticeship.
Turnbull also used the reply to lash the size of the budget deficit and the Government’s prediction that Australia’s net debt will hit $188 billion over the next four years.
He has also urged the Government to scrap its plan to cut private health care rebates for people earning more than $75,000. Instead, Turnbull has suggested increasing tobacco taxes.
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.
