When Wayne Swan steps up to make his Budget speech tomorrow, he faces a number of pressures, not least bringing Australia back to surplus while retaining some popular elements of welfare that will aid a chronically unpopular Labor Government in the polls.
These challenges may not bode well for start-ups, which would favour a sizeable cut in red tape, while also seeing their businesses and consumer spending supported by smart initiatives from the Treasurer.
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While one measure, the “carry-back” tax break, is already in the bag – and has been warmly welcomed by small business lobbyists – it remains to be seen what else Swan’s set-piece speech will deliver for innovators.
So, with our fingers firmly crossed, here are 10 things we’d love to see from this year’s Budget.
1. Common sense on the budget surplus fetish
The lead-up to the Budget has been dominated by talk of whether Swan will unveil a fiscal surplus – a goal that has far more political than business meaning.
The obsession with surplus is just another symptom of the Lilliputian thinking that often dogs political and economic debate in Australia. But it is also harmful in a practical sense for start-ups.
While business owners want a government that is financially responsible, they also want one that talks about how it will aid innovation, growth and fresh thinking. Sadly, this Budget looks unlikely to dwell on any of these topics.
Gavan Ord, CPA Australia’s small business policy adviser, told SmartCompany that the government is focused on getting a surplus “come hell or high water”, adding: “There is no talk in Australia about how we are going to support growth in the economy.”
2. More, not less, help for non-mining firms
The mining industry is getting a little jittery over this year’s Budget, following a series of public battles between some of its most successful members and the Treasurer in recent months.
A new Minerals Council of Australia paper attempts to debunk the belief that miners aren’t paying their fair share of tax and receive cushy subsidies.
Whether you buy into this report or not, it’s undeniable that the mining industry is soaring ahead of the pack.
Indeed, research out last week shows that a small business’ chance of getting credit from the bank drops sharply if the venture isn’t located in a mining boom state.
Swan must introduce some specific measures to help non-mining businesses, other than hack away at spending that will aid them, in a blinkered attempt to reach a surplus.
As an ANZ report on the Budget stated last week: “Our main concern, not knowing the full extent of cuts, is that the fiscal consolidation will be too hurried, and place additional pressure on the lacklustre non-mining economy.”
3. A national start-up strategy
How about this for a bit of moderately big thinking – an actual government-funded strategy for Australian start-ups?
The Government could even take the bold step of pushing forward several entrepreneurial heavyweights to provide much needed inspiration and leadership to start-ups.
Australia sorely lacks a big-name business leader, such as a Richard Branson in the UK or a Sean Parker in the US, who is prepared to act as a high-profile figurehead for innovation.
The best we seem to be able to do is watch Mark Bouris wag his finger at David Hasselhoff’s goofing around on TV and read about how mining billionaires don’t like paying tax.
As an innovative nation, can’t we do better than this? A working group, a committee, anything?
4. Better definition of small business
The term “small business” is rather loosely defined in Australia, with larger businesses often able to jump through regulatory loopholes in order to scoop up incentives aimed at the smaller end of town.
As Peter Strong, executive director of Council of Small Business of Australia, puts it: “Over the last two decades… most processes and policies have been designed for big businesses and, as a result, a lot of small business people have struggled.”
“But how do we define a small business in a way that can be easily regulated by government agencies? Do we use turnover, number of employees, assets or some other means?”
“This is important for the purposes of taxation, workplace relations, OH&S processes, competition policy, contract law, local government issues and the like.”
5. A smarter approach to red tape
Red tape is a perennial bugbear of the small business owner and the issue has certainly been under the microscope since the last Budget, with calls to streamline workplace regulations and environmental compliance rules, or “green tape.”
COSBOA’s Strong says that retailers’ workplace relations is a key area for red tape reduction, pointing out that the Fair Work Ombudsman found 26% of retailers were not compliant with the Fair Work Act, while just 1.8% of those with a paymaster were non-compliant.
“This shows that the Fair Work Act is the problem, not the retailers,” says Strong.
“The system really has been designed for paymasters, not small business.”