Politics

Scott Morrison doubles down on small business: Has Australia moved from Mr harbourside mansion to Mr neighbourhood chip shop?

Matthew Elmas /

Less than two months after becoming Australia’s Prime Minister, Scott Morrison is positioning his government squarely behind small businesses in the lead up to the next election.

In a surprising move on Friday morning, Morrison used a spot on ABC Radio to utter a phrase that’s often used by his political opponents as a weapon against him.

“The top end of town might have their disagreements with us from time to time, but what we do is we back small and family businesses,” he said.

Morrison was responding to criticism from big business about the “policy vacuum” created by its abandonment of the National Energy Guarantee — the policy that brought down former prime minister Malcolm Turnbull.

His response, capped off by the suggestion the “big energy companies are turning against us”, came less than a day after his announcement that about three million SMEs would receive $29.8 billion in tax cuts five years earlier.

The $3.2 billion price tag on bringing the 2.5% tax cut for businesses with up to $50 million in annual turnover forward has, at least in part, been paid for by the Coalition’s abandonment of its big business tax cuts, which it was never able to get through the Senate.

The political climate certainly wasn’t ideal for a big business tax cut, amid reports that large firms were skirting tax and the banking royal commission, which has thrown the spectre of corporate greed into the middle of public discourse.

Labor’s “top end of town” mantra stuck and the Senate crossbench wasn’t having a bar.

But now Morrison, who has quickly moved to coin terms like “fair dinkum power”, has commandeered Labor’s slogan, and it appears as though small businesses will be his go-to champions.

He’s off to a running start. On Friday, after facing a day of questions about whether he’d support the fast-tracked tax cut, Labor leader Bill Shorten agreed to “compromise” and help pass the reforms.

“What we are saying is we think we can afford this change, but so long as it does not involve cutting schools and hospitals,” Shorten said.

Shorten said he wasn’t keen for small business to be “dragged around like a political football” in the lead up to the next election, but given that Labor has promised broad changes to industrial relations, it appears unlikely Morrison will ease off.

Labor said it would pay for the fast-tracked cut in its own policy budget by delaying its Australian Investment Guarantee by a year, which will enable businesses to immediately deduct 20% off new assets worth more than $20,000.

It’s a touchy subject for Shorten, who earlier this year was forced to backtrack after initially pledging to limit tax cuts to businesses with up to $10 million in annual turnover.

Has Australia moved from Mr harbourside mansion to Mr neighbourhood chip shop?

The entire thing begs the question: Has Australia moved from Mr harbourside mansion to Mr neighbourhood chip shop?

One of the first thing Morrison did when he became PM was to bring small business back into the cabinet under former industrial relations minister Michaelia Cash.

Cash has spent the last few weeks travelling the country speaking to small business owners, spruiking tax cuts and the instant-asset write off.

It is understood small business welfare will be a policy priority heading into the mid-year economic and fiscal outlook (MYEFO) and the election next year, but what form that will take, other than the fast-tracked cut, is still up in the air.

“We really want to focus on red tape reduction in particular and also having a one-stop-shop for small business when it comes to government departments,” Cash told 2GB earlier this week.

Power prices are likely to form part of the pitch to Australian SME owners, with Morrison having already pledged to crack the whip on large energy retailers to get power prices down.

That’s a sentiment he doubled down on this week.

“I’m not surprised the big end of town and the big energy companies are turning against us because frankly, they know that we will take them to task,” he said.

Morrison’s power pitch appears obsessed with getting prices down through a reliability guarantee, default pricing and new power generation.

Labor, on the other hand, has pledged to legislate a cap on power prices, a policy that has also been pitched as positive for small business.

Industrial relations is forming as a sticking point for Labor, at least as far as its ability to neutralise Morrison’s small business agenda goes.

Labor has pledged to reverse the Fair Work Commission’s 2017 cuts to Sunday penalty rates and “crack down” on what it says are “dodgy” labour hire firms.

It also wants to address the issue of “permanent casuals” and put the “bargain back into bargaining” by making it easier for employees to negotiate without the termination of their agreements having over their heads.

Meanwhile, Shorten said on Monday that he was “open” to calls from the Australian Council of Trade Unions (ACTU) for a return to industry-wide bargaining, saying that Labor’s IR policy could be expanded.

Morrison, keeping with his theme for the week, said small businesses would suffer.

“Bill Shorten will increase their taxes, increase their regulation and tie them up in union knots,” Morrison he said.

Shorten’s trademark “big end of town” rebuttal is certainly less effective in that context.

NOW READ: “Naive”: SMEs say Labor plan to repeal tax cuts for companies earning over $10 million would stunt business growth

NOW READ: Leak reveals government plan to bring forward small business tax cuts and change $20,000 instant asset write-off

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Matthew Elmas

Matthew is the news editor at SmartCompany.

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