Small Business Minister Craig Laundy says as a businessman himself, he understands the priorities for smaller operators, but the challenge is getting them to listen to the government.
“People are slow to listen to government. A lot of them [businesses] say, ‘government should just get out of our way’, and when governments spread a message, there is an element of a trust deficit,” Laundy tells SmartCompany.
The minister was reflecting on preliminary insights from the government’s Small Business Digital Taskforce, which was outlined in Mid-Year Economic and Fiscal Outlook in December 2017 and has been headed up by Mark Bouris.
Laundy is also a member of the Taskforce, along with Assistant Minister for Finance, David Coleman, Suncorp’s Pip Marlow, Su McCluskey from the Foundation for Young Australians, Spiro Pappas from NAB and Gerd Schenkel from BGA Digital.
Tuesday’s federal budget allocated $500,000 to Laundy’s office from the Department of Industry, Innovation and Science’s budget so a formal response can be tabled to the Taskforce’s investigation into whether SMEs are truly embracing digital technology.
Laundy says from the Taskforce’s work, it’s immediately clear that many SMEs “don’t know where to go to for assistance when they need it”, but they also don’t always want governments telling them how to set up their computer systems.
“The challenge we have in government is how do we reach SMEs? And spread the word on opportunities when they do digitise,” he says.
One option on the table so far is the idea of a “peer-to-peer” digital development hub, where an organisation outside of government would help businesses thrash ideas out between themselves.
Laundy says overall, more Australians are starting businesses when compared to the Rudd/Gillard/Rudd years, but he’s aware that SME owners are also conscious of the economy’s “soft underbelly” — and it could be making them more risk averse.
“We’ve come through the GFC — eight or nine years ago — but they haven’t forgotten that … they’re aware the economy could turn,” he says.
Caution on “locking in” write-offs
One of the most popular Coalition policies for driving small busines investment during this period of caution, the $20,000 instant asset write-off scheme, was only granted a one-year reprieve in the budget papers.
Why not just make it permanent?
“I’d love to make it permanent, however, business people are sure to understand,” Laundy says, highlighting that keeping the budget on track to return to surplus is really the number one priority.
“Whilst we can continue to afford it, I will be advocating for it,” he says.
The extension of the scheme is projected to cost the budget bottom line $350 million over the forward estimates, with the majority of the hit to come in 2019—20, when the cost to the budget will be $550 million. In the following two years, the measure will deliver $200 million to the government’s coffers.
Renewing for one year is the prudent move to avoid a situation where “we lock it in and times get tough”, says Laundy.
A year’s extension should be considered one of the big wins from this year’s papers, he says.
“The reason why that’s so important is that it has a multiplier effect, where you have small and family businesses spending with other small businesses,” he says.