OPINION: What business needed most in Australia’s election was a clear outcome, and they have it. Tony Abbott is Prime Minister and the Coalition has a comfortable majority in the lower house.
Australian business owners have big expectations, and I hope they will be fulfilled. There is definitely reason for optimism, particularly in the Coalition’s management of the Small Business portfolio, which Labor previously used as a rotating door. With new Minister Bruce Billson in the seat, Australia’s SMEs will be starting much further forward than where they left off.
In my view the biggest challenge of the outgoing government was not that they had universally bad policy for small business. The tax loss carry back, the increase in superannuation, the increase in the tax free threshold, the significant lift in the immediate asset write off - not to mention a broadband network that was designed for small businesses as opposed to consumers and larger businesses - were all good policies.
The biggest problem with the outgoing party was that they did not understand small business. Business owners were left to feel like they were the end of the line in the government’s priorities, waiting for scraps while almost every other sector was ahead of them.
Abbott’s first words were to declare that ‘‘Australia is open for business’’. While his policies include removing some of the beneficial policies I’ve just pointed to, as a leader he shows the promise of offering more understanding of small businesses and more certainty. These two qualities have already combined to lift business confidence and hopefully we will see a rise in business investment to match.
Why this matters to New Zealand
For the first time in 15 years both Australia and New Zealand have conservative governments. This might suggest a closer working relationship which will bolster the already-strong trans-Tasman relationship we enjoy regardless of political persuasion.
For New Zealanders living in Australia the area that matters most, welfare reform, is unlikely to change. Currently New Zealanders living and working in Australia receive little social welfare support and there are no coalition policies that look to change this.
For the broader relationship between countries, as a large trading partner with Australia New Zealand industry will be looking for Abbott to drive economic growth. A healthier Australian economy will impact positively on our local economy and that will flow on to our local businesses - operators who account for so much of our GDP and employment.
Specific policies to look out for
The Coalition has a raft of small business policies. Some of them will be familiar to New Zealand business owners, and others might have some influence on this side of the ditch. They include:
1. Lowering electricity prices by removing the carbon tax.
2. Lowering taxes by a small reduction in the company tax rate.
3. Cutting red and green tape.
4. Doubling the rate of small business creation.
5. Reviewing competition policy.
6. Extending unfair contract protection to small businesses.
Small businesses on both sides of the Tasman have much to gain by finding opportunities to learn from each other, if not to actively work together. In the digital age, with our countries brought closer together by the internet, such collaboration is now possible.
What we need to ensure, though, is that the regulatory framework throughout Australasia is designed to foster, support and grow SMEs.
Tim Reed is CEO of MYOB