Prime Minister Scott Morrison has pledged to cut the red tape burden on Aussie businesses by asking them what the go is.
In his first major policy speech following the Coalition’s election victory last month, Morrison yesterday invoked famous British economist John Maynard Keynes, declaring Australia needs to provoke ‘animal spirits’ to see off economic headwinds.
“To provoke the much needed ‘animal spirits’ in our economy we must also remove regulatory and bureaucratic barriers to businesses investing and creating more jobs,” he told a business audience in Western Australia.
The comments, which come as the Reserve Bank struggles to influence inflation, reference the government’s desire to get consumers “off the economic sidelines” by helping business create jobs.
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Morrison promises listen-first approach
True to trickle-down economic form, Morrison said he and assistant minister Ben Morton will “tackle the full suite of barriers” facing businesses so they can get on with helping meet the Coalition’s stated 1.25 million new job target.
Conceding taxpayer-funded regulators are, in many cases, “making things worse”, he promised to listen instead.
“Rather than setting targets for departments or government agencies, we’ll be asking the wider question from the perspective of a business,” Morrison said.
“By focusing on regulation from the viewpoint of business, we will identify the regulations and bureaucratic processes that impose the largest costs on key sectors of the economy and the biggest hurdles to letting those investments flow.”
Recent estimates place the cost of Australia’s red tape burden on SMEs at over $20.16 billion, while many are losing sleep to keep up with administration tasks.
“Step one is to get a picture of the regulatory anatomies that apply to key sectoral investments. Step two is to identify blockages. Step three is to remove them, like cholesterol in the arteries,” Morrison said.
Lobbyist wishlists abound as IR review flagged
The call to action has, unsurprisingly, brought all manner of lobbyists out of the post-election woodwork, hands out and ready to air their grievances in Canberra.
With the 46th parliament due to sit for the first time next week the initial lobbying focus has centred on workplace relations reform.
Before the election business groups were preparing to go on the defensive with the expectation of a Labor win, but now the Coalition has been returned there’s talk of simplifying the system.
Australian Chamber of Commerce and Industry (ACCI) chief executive James Pearson has called for “sensible improvements” to workplace law, derided as overly complex by business owners in the past.
“Our members have told us repeatedly that the current system is a minefield of unnecessary processes, procedures, and legalities which frustrate everyone, employers and employees alike,” Pearson said in a statement.
“We need practical workplace relations reforms so that employers and employees can find more productive ways of working and create the rewarding and skilled jobs of the future.”
Industrial relations reform is itself a political minefield, setting the stage for a war of words between the major parties in the coming months, despite both unions and employer groups pressing the case for urgent changes.
Morrison yesterday flagged a review of industrial relations to be spearheaded by Minister responsible Christian Porter as an early priority for the government, specifically encouraging business groups to prosecute their case in the community.
“Any changes in this area must be evidence-based, protect the rights and entitlements of workers and have clear gains for the economy and for working Australians,” Morrison said.
The government is so far light on detail about how such a review will be conducted, but any probe is expected to bring longstanding employer concerns about the IR system to the fore, including calls to change the Fair Work Commission’s better off overall test and clarify the definition of casual work under the Fair Work Act.
Push for unfair dismissal code review
Small business advocates, including small business ombudsman Kate Carnell and COSBOA boss Peter Strong are making the case for a review of the small business unfair dismissal code.
As SmartCompany reported earlier this month, a high proportion of dumped claims is giving rise to the argument businesses are being targeted by relatively spurious claims in a for-profit legal industry.
“The overwhelming view among small businesses is the legislation is far too complicated, particularly for those with less than 20 employees and no expert HR or legal departments,” Carnell said in a statement following the PM’s speech.
“A key priority should be a review of the Small Business Fair Dismissal Code, to ensure there are adequate provisions to protect small business employers from an unfair dismissal claim when they have made every effort to do the right thing.
“We know that the current protections in place are not doing the job that was originally intended.”
Strong said simplifying tax law and improving relations between small business and local government should also be priorities.
“Tax issues such as fringe benefits tax can be confronted and government can develop best practice processes for local government, which is where the biggest problems lie,” he said.
Fair Work Commission to come under spotlight
Within the broader case for simplifying workplace laws are calls to change how the Fair Work Commission regulates industrial relations.
Business lobbyists frequently point to a decline in the number of active enterprise agreements in recent years as evidence the FWC’s better off overall test – which requires an agreement to make all workers better off overall than their award – is not fit for purpose.
“A definition for the term ‘casual employee’ needs to be inserted into the Fair Work Act,” Australian Industry Group chief executive Innes Willox said in response to the PM’s speech.
Figures put together by the Department of Jobs and Small Business show the number of active enterprise agreements has declined from 14,578 in 2015 to 10,897 last December, a 25% decrease.
The FWC, which has routinely missed its targets for EBA approval timeframes, blamed employers in February, telling Senate Estimates firms keep making bad applications.
“Double dipping” worries still unresolved
Meanwhile, the fallout from a court case last year which may open the door to casual workers to ‘double-dip’ on loading and leave entitlements remains unresolved.
Porter’s predecessor Kelly O’Dwyer patched the problem with Senate regulation during the last term of Parliament, but employer groups want the definition of casual work to be clarified in law.
Specifically, there is concern labour market changes like the gig economy have changed the nature of work such that the current vague definition of casuals in the Fair Work Act is difficult to navigate.
Unions are also pushing for clarity, concerned low wage contractors are being exploited by companies like Uber and Deliveroo.
Unions urge action on wage growth
In its response to the PM’s speech yesterday, the ACTU focused on pay packets, urging the government to take “immediate action to kick-start wage growth”.
Secretary Sally McManus wrote to Morrison yesterday with the ask, citing a new rung of penalty rate cuts due to come into effect for retail and fast food workers next week.
“The entire economy is being impacted by the Government’s punitive policies like penalty rates cuts, public sector wage rise caps, and their refusal to meaningfully boost the minimum wage,” she said in a statement.
There is considerable concern among economists that persistently low real wage growth, coupled with rising underemployment, are putting the breaks of macro-economic demand.
Earlier this month NAB economists declared the retail sector, most sensitive to fluctuations in consumer spending, was in recession, prompting executives to call for relief.
To date, the Coalition has preferred parotting its income tax cut plans when asked about sluggish economic indicators.
Yesterday prominent fashion retailer Solomon Lew backed the tax cuts publicly, calling on the government to pass the bill and crease “partisan political point scoring”.
The tax cuts are shaping up as the big story in Canberra next week as the government pressures Labor to support the $158 billion package.
The three-stage plan will see Australians earning up to $126,000 receive $1,080 back at tax time.
Labor leader Anthony Albanese has supported part of the plan but is opposing the third stage, which would cut the 32.5% tax bracket to 30%.