Happy New Year Bruce Billson, many thanks for your time.
Great to be back with you Ross and best wishes to all those enterprising listeners that appreciate your program.
You would accept that it is very, very difficult for many businesses, it’s not necessarily the conditions are bad – it’s more that the mood is not so great.
Yeah, it is a mixture of things Ross. I think the mood is quite patchy and I think bits of the economy are also showing patchiness and I think that feeds into a sense of vulnerability.
I take particular interest in what is happening with confidence measures. We know from some of the payment providers that when there is negativity and pessimism around they see a drop off in activity but there are green shoots as well.
Jobs growth is more than triple what it was in 2014 compared to 2013. Job advertisements are the highest they have been for a couple of years. Fuel prices are taking some cost pressures out, along with the abolition of the carbon tax. We see some encouraging signs in retail, and strong building approvals.
So it is patchy, but there are some green shoots and that is why we have to keep working to implement the Economic Action Strategy to provide that solid foundation to build confidence and to build enterprise and see the jobs growth that we need.
Of course our Prime Minister has been out there doing it in the past few days, talking on media, trying to get the message out there to reinvigorate it. But the polls quite clearly are not good; it is not a great sign.
You as the first Small Business Minister, inside Cabinet, it was a real save for small business.
Does it worry you maybe that some of the advancements that you have made in getting rid of green tape and red tape, getting rid of a lot of the statutes off the book to try and help business – are you concerned in some ways that the state of the polls, the mood of the electorate, could mean that some of these initiatives you have embarked upon could be wasted at the polls if the mood remains the same?
It reminds me of the need to just keep working as hard for the success of small business people as they do for themselves. We have to keep going. The do-nothing-sleep-walk into the economic future, it is no future for our country so we have to keep working on our Economic Action Strategy, trying to create the conditions for business formation and business growth and we are getting there.
We saw the highest number of businesses formed in 2014 than we have seen for many years. This is an encouraging sign.
There is no easy, sloppy profit out there, which I am sure your listeners would know, yet there is no substitute for customers and that is why we need customers that are confident and prepared to spend and invest.
That is also why some of these Free Trade Agreement measures are so important for our small businesses.
New markets, hundreds of millions of new prospective customers, but we still need to win those opportunities – they are not gifted for us, they are not reserved for Australia.
I think that is the conversation I will be more vigorously putting out in the coming year-the case for change and how it is a bit like cricket in the 70’s: pure, natural talent alone used to see us win and then the rest of the world realised training methods, developing their talents… we can’t just win on natural talent alone.
We have got to be our very best to win in cricket as we need to win in commerce and that is the focus for me for this year.
Alright, I will take one example of this. For example this week the Productivity Commission has announced a wide sweeping review of industrial relations laws, including penalty rates, a variety of different enterprise bargaining agreements and the role of Fair Work Australia. The minimum wage is another one.
These are things that many small businesses have cried out for a long time, but it is really very damaging potentially to the electoral chances of the Government.
Is this an example of trying to do what is seen to be the right thing for the economy overall and ultimately if that makes you popular or not popular then so be it?
Well we do have to get this right. I will give you some examples. In the 70’s there were seven people in the workforce for every one retiree. Now there are five people in the workforce for every one retiree and by the middle of this century which frankly is not that far away, it will be less than three people in the workforce for every retiree.
We need to get the industrial relations regime there to optimise our productivity, to support the participation of as many Australians who are happy to and able to contribute as we can. And getting these policy settings in the workplace regime are incredibly important.
You touched on some of the concerns that small businesses have raised but this review is an election commitment we took- it was announced five months before the election.
We have had input from everybody including the union movement, employer organisations, policy wonks, everyone has had a say on the terms of reference.
Now we have asked the Productivity Commission, who we trusted to look at disability services, and who came up with the National Disability Insurance Scheme – an economically robust and socially sensible measure – to do important analytical work on our workplace relations regime.
Is it supporting our national goals? Are these policy settings in the workplace regime encouraging not only people to contribute and see a reward for their effort and their enterprise but actually encouraging and supporting new jobs growth, not just for those that have a job now and are getting a good return and salary and income for their enterprise, but for those looking for work – does the system support that?
One last point, what about the more than one million Australians who are self-employed? Who create their own opportunities as independent contractors or self-employed people? They often find themselves stumbling over different laws, different requirements. Are they an employee? Are they an employer?
Well, they are self-employed and they make an incredible contribution to our economy. Many of them are your listeners and we need to make sure the regime supports their efforts as well.
Just briefly, is the same attitude the one that you take to having had the Board of Taxation look at the features of the tax system that are hindering or preventing small business from reaching their commercial goals?
Exactly the same outlook. Our small business men and women know for many of them they need to be world class every day if they are competing for opportunities overseas, or there is an importer wanting a piece of their action here.
We need to make sure our policy settings and our regulatory framework also meet that same goal and we knew there were problems with the way the tax system was being implemented, some of the policy settings acted as an impediment to small business and enterprising people.
That is what the Board of Taxation review was about. Great field evidence, input and real life experience from suburban accountants and small businesses that have had an experience that was not the one that was encouraging them to be their best and to contribute to the economy.
That is what we tasked the Board of Taxation to do. They have come back with some short term measures; they are already being implemented through the ATO.
There are longer term policy changes, some of which we can move on now but some of which need to be part of the broader tax reform debate. That is about getting these policy settings right so we can all be our very best and the economy can be its very best for the years ahead.
Bruce Billson, the Minister for Small Business for Australia, our first guest on the program this year and Bruce we appreciate your time.
Great to speak with you and thanks for your ongoing interest in small business Ross.