Small business set to take centre stage

Robert Gottliebsen
FEBRUARY 10, 2015
BUSINESS SPECTATOR
EVERY picture tells a story.
When you examine the footage of Liberal politicians leaving the party room after the spill vote, alongside the Prime Minister is Small Business Minister Bruce Billson.
It’s taken a long time, but Billson has finally convinced Tony Abbott that what is happening in the UK and Canada can be duplicated in Australia: the way to reduce unemployment is to foster small business and independent contracting.
All large Australian companies and big organisations, including government departments, need to understand the implications of the Abbott-Billson accord that has been given great impetus by the latest leadership battle.
The new era comes as small businesses are set to be far more efficient as groups like MYOB, Xero and Reckon/Intuit introduce cloud computing to small enterprises, which simplifies bookkeeping by linking it to bank accounts. Small enterprises can now compete and work within modern communications systems. And unlike large enterprises that are cutting back, small enterprises create jobs.
In the 2010 election campaign, Tony Abbott had a series of small business policies but he never embraced them. Had he done so, he might have won the election.
After the 2010 election, Bruce Billson became shadow minister for small business. In the 2013 election campaign, a much more detailed array of small business policies was put before the electorate, but the election campaign itself was about other issues, such as Labor’s instability and the carbon tax.
Nevertheless Bruce Billson was appointed to the inner cabinet and has been working to get the small business policies to the top of the agenda. He has been stalled, but now his time has come.
His most ambitious plan is to extend consumer fair contract protection to deals between small enterprises and large organisations. Most large organisations have their lawyers write such contracts and they normally have many unfair provisions, which reflect the imbalance of power in the negotiation.
Coles and Woolworths have moved ahead of the legislation with protections for suppliers, and the retail shopping centres have reached agreement that they will be bound by the legislation except for retail tenancies, where there is extensive state legislation. The legislation may snag in the Senate, but the idea was originally an ALP policy that got lost in the Rudd years.
Most large companies are totally unprepared for this change, so there will be a lot if complaining. But it’s going to happen because small enterprises will drive employment.
Billson has a committee looking at widening the definitions for independent contracting. That may achieve results, but the existing legislation introduced by John Howard is very effective.
Slowly — very slowly — the taxation commissioner is coming to understand that his staff must obey the law in their interpretations of what constitutes an independent contractor. This will enable much wider use of independent contracting. Given that there is no chance of substantial change in industrial relations laws for many years (leaving out shift allowances), independent contracting will help many companies lift productivity. BHP is using independent contracting to dramatically improve iron ore productivity.
Billson has a plan to make it possible for retail investors to invest small amounts to back private companies. There are some risks in this proposal but it will assist many enterprises to make full use of cloud computing.
In the lead-up to the spill, Bruce Billson was a strong Abbott supporter. It has taken a long time to get Abbott on board. He will not want to start again with Malcolm Turnbull.