There is going to be two key pieces of information that will come out this week. One of which is the Tax White Paper that comes out tomorrow. And that has big implications not only for individuals but also for business.
And on top of that also, and this is important for business - the Harper competition review will be handed down on Tuesday.
So Monday Tuesday two big pieces of parliamentary information will come out. And of course they will have implications for businesses large and small.
Let’s now go to the Small Business Minister Bruce Billson, who has been good enough to give up his Sunday for us. Good day Bruce, how you doing?
Great to talk with you and your listeners Ross!
That’s great, now New South Wales, let’s go straight there for starters.
Mike Baird has won four years in office, we spoke with Andrew Constance a little earlier and clearly in terms of the state of the states, in terms of retail spending, housing construction spending, all that type of thing. New South Wales has taken itself from the bottom of the pile to the top of the pile and that has got to be a good thing for the Australian economy as well.
Yes, the biggest economy of the states in Australia is New South Wales and when New South Wales is going well, the country generally is going well. That is a really impressive performance from the Baird Government to not only build the momentum of housing starts, retail sales, business formation… a clear plan that I think people responded to.
The agenda for infrastructure and jobs that the Baird Government has outlined that is great news for New South Wales and I hope it drags along some other states Ross.
Well that would be good. There’s some suggestion it would be even good to see if it dragged along the Federal Government as well. I mean a lot was said about Mike Baird’s pragmatism, the way in which he communicates - his style more than anything else.
Do you think there’s a message in this for other political leaders as well?
I think the electorate warmed to him and they saw a very measured, likable guy with a clear sense of what needs to be done and that is a great credit to him. He has not quite got our Senate so that is a bonus for him, but he has got an Upper House that I hope he can work with.
I think the idea of people seeing a clear plan for the future, some certainty and surefootedness about what governments are about and also being able to point to the benefits is a good template.
I think we are getting there federally; we have got three times the jobs formation in the first year of the Abbott Government compared to the last under Labor.
Three times the number of companies forming, so more enterprise is being created, a hallmark of our economy. Green shoots in a number of areas, the building starts are important.
I guess the other thing is that this is why we have been very keen to get infrastructure moving and it is a great jobs generator. It also soaks up a lot of the mining construction capacity that is coming off, and it also builds the potential for our cities and our regions to create the wealth and the opportunities that everyone is looking for.
So I am optimistic; I am encouraged by the results and all credit to Mike Baird and his team.
Okay. Could I now go to this week’s events and what will take place. The tax white paper that is released tomorrow, this was something that was promised late last year, now coming into it.
The Prime Minister has said previously and the Treasurer: There will be no change to any of the key taxes including even the GST before the next election. But there are suggested to be from July 1 this year tax cuts for small business, although I notice that others are calling for different options to that.
What is your gut feeling in terms of what this white paper will bring immediately, but then into the medium term?
There is a couple of moving parts there Ross.
The Prime Minister made it clear at his National Press Club speech that a real focus for this Budget will be families, dealing with the cost and the availability of child care and also a significant small business package. He identified a small business company tax cut as being the starting point.
You and I know two thirds of small businesses are not structured as companies- so clearly we know that and that is why we are looking more broadly about what kind of tax changes are affordable; what kind of incentives can we put in place for those enterprising men and women that mortgage their houses to have a go and create opportunities for themselves and others. But there is three parts to that work Ross.
One is the reward that people get for their enterprise, and that is where the tax cut comes in.
Another one is what can we do to activate investment and innovation so that our productive capacity is improved.
The last one is some of our ongoing work around red tape and compliance costs reduction, they actually come with a cost and we need to be able to bank roll that as well. So that is the three prongs.
Can I just pick up there on one of those prongs and that was the tax cut itself because as you’re aware there are some including the Council of Small Business but even some of your own politicians such as Craig Laundy who have indicated that maybe there might be a different way.
We spoke with Craig Laundy last week; here is what he had to say.
Because of the different ownership structures of small business, the problem with a tax cut is that about a third of the small businesses in Australia have a company sitting at the bank end of their trading entity. Two thirds don’t. So if you want to change the company tax rate obviously one third of the small business operators in Australia would get a benefit and two third would miss out.
That there is Craig Laundy, how do you respond to that Bruce? That is coming from inside your own party; he’s a man who knows business, he worked in it. What’s your gut feel?
He is actually echoing the very thing that I was talking about and we have had some good discussions with my colleagues over recent weeks over pizza and all those important networking opportunities.
I brought the colleagues in and said here is a range of potential measures that we are considering, and welcomed their input.
So that collaborative process and some of those key facts have obviously taken hold with the colleagues and they are now reflecting on the material that I have shared.
Okay so Bruce which way is it going to go, is it going to be a company tax cut or do you think it is going to be a little bit more broader than that?
No it will be broader than that because as I said in the introduction it is only a third of the businesses and there are other influences at play.
There is no single silver bullet Ross; small businesses and family enterprises are very diverse and we need to recognise that diversity and bring together a range of measures that energise enterprise.
That is what we have to do to recover the 519,000 jobs lost in small business under the previous Labor Government and get things on the right track so that we can see jobs growth and more opportunities right across the economy and that is all about getting behind the engine room of the economy – that is small business and that is our focus.
There you go the Small Business Minister Federally, Bruce Billson. Two key Government papers or pieces of information coming out this week – number one, tomorrow the tax white paper will be released and so that is a complete over haul and overview of what our tax system does. And also then secondly you’ve got the Harper competition review coming down on Tuesday and that also will be important in terms of tackling some of those areas where more competition is required.
The Small Business Minister Bruce Billson, we appreciate your time on the program.
Any time Ross and thanks for your commitment to enterprise.