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Address to the Australian Booksellers Association Annual Conference and Trade Exhibition launch, Sydney



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The Hon Brendan O'Connor. Minister for Small Business, Minister for Housing and Homelessness

Address to the Australian Booksellers Association Annual Conference and Trade Exhibition Launch

17 Jun 2012

Novotel Sydney Manly, NSW

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I have always been a big advocate for the importance of books. There's no question my love for books and for reading has provided me unadulterated joy and opportunity. It helped me gain an Arts/ Law double degree, it helps me relax and escape into a world beyond politics, and it also enables me to bond with my four-year-old daughter.

Unfortunately ministerial briefs are currently my main source of reading material, but I still get great pleasure from visiting bookshops, as do millions of other Australians.

Mr Byng, you've certainly had an interesting career in the book business, and the creation of World Book Night is to be commended. Giving books away is an innovative way of promoting the printed word, and I thank you for the work you do.

Resilient industry

It's the Association's 88th annual conference, and that in itself is a remarkable testament to the resilience of your industry. There's little doubt the bookselling business is undergoing a period of considerable change. What is most important is the determination of the industry to respond to the challenges.

I have spoken to booksellers around the country and I understand the issues you face. Just last week I visited the independent book shop Book and Paper in the Melbourne suburb of Williamstown, where I spoke with the owner, Sue Martin, about the difficulties she faces, such as online purchasing, e-books and tenancy agreements.

It is true the internet and the age of information technology is changing your industry. However, with this change comes great opportunity to expand and reach new markets.

I'm pleased to see that innovative booksellers have turned to the internet to boost their market reach. This conference is an example of the forward looking, strategic approach your industry is taking to innovate and modernise.

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Centuries of change

You could liken the development of the internet to the changes that occurred when the first printing presses were being used by people like William Caxton, revolutionising the art of bookmaking, giving rise to a new craft.

So the modern analogy is that, like everywhere else, businesses need to be able to recognise and adapt to changes in the market place - and to innovate, seek out niche markets and new business models to take advantage of the opportunity of technological change that the internet brings.

For example, online trading now levels the playing field by potentially opening sales room doors to a wider audience than passing foot traffic, 24 hours a day, seven days a week.

Online sales

So picking up on the ocean and wave theme of this conference, we must remind ourselves, King Canute-like, that we cannot stop the wave of technology so we must work with it.

Of course, many bookstores are already being proactive and building their capacity to sell books online as well as making digital books available in store. Nothing compares, however, to being able to browse in a bookstore, and pick up and flick through the pages of a paper book. This just can't be replicated electronically.

Book shops are also important resources for local schools, senior citizens and other community groups. So many bookstores, particularly in regional and rural areas are more than just shops, they're community hubs, they offer recommendations and reviews, run book clubs, readings and hold author events. Some are also coffee shops and wine bars and offer a destination to meet beyond a place to shop. Peter Strong, head of COSBOA, serves wine at his bookshop in Canberra, which brings together two of my most beloved pastimes.

Another example of innovation in your industry is the Book Industry Speed to Market Initiative. This is an effective response to the global marketplace and signals a very welcome atmosphere of cooperation in the Australian publishing and bookselling industry.

I want to turn to the wider small business sector, of which, of course, book stores are an important segment. I was delighted to be appointed as Small Business Minister in March and in that time have met with many people in small business across the breadth of the country.

Importance of small business

Having the small business portfolio elevated to Cabinet for the first time in a decade is recognition of just how important the sector is to the Gillard Government. Your members are part of a huge small business community. There are more than two million small businesses across the country providing jobs for almost five million Australians, and generating about a fifth of gross domestic product.

The Gillard Government understands how important small business is to the national economy and we are determined to create the environment where small business not

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only survive, they thrive.

This was made evident in the recent Federal Budget, which was good news for all Australians but particularly for small business.

Business tax relief

The Gillard Government is providing new business tax relief by implementing recommendations of the Australian Future Tax System review for a loss carry back system. The loss carryback system allows companies to carry back losses up to $1 million to offset past profits and get a refund of tax previously paid on that profit. This major initiative will help companies through tough times, and encourage them to invest and grow. For the first time, incorporated businesses currently making losses will be able to carry those losses back against past profits and receive a refund on some of the tax they paid then.

Small business cash flow will also be boosted with the raising of the write-off threshold for assets to $6,500 from 1 July and simplified depreciation pooling arrangements. This applies whether a business is incorporated or not. The instant asset write off will allow businesses to write off each new asset valued up to $6,500 in that tax year, instead of depreciating it over a number of years. Not only does this free up cash flow, it saves time, money and paperwork in not having to work through depreciation schedules, so it cuts red tape as well as providing tax relief.

This measure will be worth more than $1 billion to small business in 2013-14 alone.

There's no limit on the number of assets that can be written off:it means small businesses can update equipment, increase cash flow and the changed depreciation arrangements mean saved time, money and paperwork.

So, if you buy a $3,000 computer for your shop, you will be able to write this off completely in the first year instead of the $450 in the first year under previous arrangements.

Many small businesses - particularly sole traders, independent contractors and micro businesses - will also benefit from the personal income tax cuts, including the tripling of the tax-free threshold, which are being brought in as part of our Clean Energy package.

National Broadband Network

I mentioned the online world and the opportunities it presents. The National Broadband Network will expand that immensely and offer opportunities and an ease of access never before seen in this country. When completed, the NBN will be the largest single infrastructure investment in Australia's history and will help us become one of the world's leading digital economies by 2020.

The NBN enables businesses to adopt new, efficient business models and access greater markets in Australia and overseas. It will open the door to global value chains and industries and broaden their business networks. If your business is online, it is a global 24/ 7 showroom. It will be up to small businesses everywhere, but particularly in regional areas, to work out how they can market themselves and create services to derive a competitive advantage from this world-leading technological advance.

But help is at hand. The Digital Enterprise Program is an Australian Government

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program funded to the tune of $10 million over three years from 2011-12. It's designed to assist SMEs and not-for-profit organisations in early rollout areas to understand how they can maximise the opportunities of digital engagement presented by the NBN.

Conclusion

The things I have spoken about today are just a taste of the initiatives the Gillard Government is realising to help small business. There are many others, such as the Small Business Superannuation Clearing House, the national business name registration program and the Small Business Commissioner.

I will refer you to the Australian Government small business website, business.gov.au where you can access the details of these and myriad other Government programs and information.

More specifically, the Government is soon to announce its response to the recommendations of the Book Industry Strategy Group report, and the Low-Value Threshold Taskforce is also soon to report back. Whatever the outcomes, it is important that we work through these issues together.

So, once again, thank you for inviting me to join you today, I have much pleasure in opening your conference with all good wishes for a strong bookselling future.

Media Contact: Minister O'Connor's office, 02 6277 7667

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