The Australian, May 11, 2017
It’s taken a long time but the Federal Coalition government has finally woken up to the fact that smaller enterprises, rather than large ones, will drive employment and will also play a big role in determining future governments.
I believe that the ALP has come to a very similar conclusion. So it is worth taking time off from the property and banking issues raised by the budget and looking at the 2017 round of small business measures and the further steps that need to be taken.
I have been deeply involved in two business start-ups and on each occasion we underestimated the unnecessary government red tape and regulations. The budget vows to slash red tape in conjunction with the states. Indeed the Federal Government has committed $300 million to make available to State Governments to reduce small business compliance costs.
I hope they can achieve their goal. But it is not easy because each regulation keeps public servants in a job and they will fight to keep those regulations. The politicians have to be very strong and avoid the ‘yes minister’ traps. Donald Trump in the US came to exactly the same conclusion on regulations and red tape. Over the next year or so it will be fascinating to see which administration — Australia or the US — delivers.
Banks continually bemoan the fact small business is not borrowing and investing. Small businesses now have a reduced trust in Australian banks and when they think about borrowing they are presented with 100 page lending agreements which give the banks power to do almost anything — change the terms, call in the money, raise rates, etc.
All overdraft agreements signed since November 12 have a vast amount of clauses that are in breach of the fair contracts act. Those sections in the agreement are void. It’s a chaotic situation With tongue-in-cheek Scott Morrison might suggest to the banks that they make their loan agreements legal and fair or he will double the levy. I believe that the bank bureaucracies and lawyers actually are holding back bank profits because with fair agreements lending will rise
Meanwhile other Morrison measures include increasing the applicability of crowd sourcing and the $100 million allocated to the advanced manufacturing industry, much of which will go to small business.
However the treasurer has not understood that while the Australian Taxation Office is doing good work among large companies and the cash economy, its position in small business affairs as investigator, prosecutor, jury, judge, appeal judge and sentencer is just not fair and makes small enterprises fearful.
And they have good reason to be scared. I have disclosed rigged legal reports and tax prosecutors becoming tax judges in the same case. When I reveal the facts the tax people change their stance but I cannot be everywhere. We need the Inspector General of Taxation to be appointed the appeal body in small business cases.
If Scott Morrison does not ‘get it’ in tax fairness then the ALP will. But in other areas, the government certainly does get it and we have the promise of Government agencies to pay small business suppliers within 30 days (absolutely fantastic ; $20,000 plant write offs returning and the threshold where they apply being lifted to $10,000 plus an Increase support under the entrepreneurs’ program to provide additional support for regional businesses.
We are entering into an era where understanding one’s customers is going to be very important and that will require heavy investment in the new technologies to enable smaller enterprises to compete with larger organisations. Bring on the fair overdraft agreements and the Inspector General of Taxation as the final appeal body in small business tax matters.