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Thursday, 11 October 2012
Page: 8110

Small Business

(Question No. 2145)

Senator Abetz asked the Minister representing the Minister for Employment and Workplace Relations, upon notice, on 7 September 2012:

With reference to an article in the Australian Financial Review dated 15 August 2012, in which the Minister is quoted as stating ‘the challenges to small business are real but not from industrial relations’:

(1) What are the challenges to small business if not the result of pressures from industrial relations.

(2) Do the challenges include: (a) the 18 000 additional regulations imposed by the Government; if not, why not; and (b) the Carbon Tax; if not, why not.

Senator Wong: The Minister for Employment and Workplace Relations has provided the following answer to the honourable senator’s question:

(1) The Government understands that Australian firms, especially small to medium size businesses, face a range of challenges in a competitive and continually changing economic environment. The Australian economy is undergoing structural change resulting from the ongoing demand for Australia’s key commodities exports, the sustained high dollar, cautious consumer behaviour since the global financial crisis, and changing patterns of domestic spending, including the shift towards services and a clean energy future. While representing opportunities for many businesses, these changes represent challenges for others. Some particular pressures that businesses are facing include gaining access to global supply chains and major investment projects, obtaining sufficient access to business finance and building the capabilities to adapt and drive change.

(2) The OECD’s review of Australian regulatory practices describes Australia as ‘one of the front-running countries in the OECD in terms of its regulatory reform practices’ and observes that ‘in general the Australian States demonstrate regulatory management practices that are among OECD best practice’. 1In further improving regulatory settings and reducing red-tape, the Government is continuing to implement an ambitious and comprehensive deregulation agenda.

Through COAG, the Commonwealth Government is pursuing a comprehensive deregulation and harmonisation agenda under the National Partnership to Deliver a Seamless National Economy (SNE). Forty-five separate reforms are being progressed under this National Partnership, comprising of 27 deregulation priorities in driving competition, boosting productivity, improving labour mobility, and reducing business compliance costs by removing unnecessary or inconsistent regulation. The Productivity Commission estimates that this comprehensive reform agenda could reduce costs to business of around $4 billion per year.

The Government’s Clean Energy Future Plan will cut pollution and drive investment, helping to ensure Australian businesses can compete and remain prosperous in the future. It will create new opportunities for a range of small entrepreneurs and business owners, across various industries. For example, opportunities will open up for businesses to develop services and products in new clean industries such as renewable energy generation, carbon farming and sustainable design.

No small businesses will have to pay a price on carbon pollution directly or deal with new red tape. Only the biggest polluters, around 300 businesses nation wide, have to directly pay for their carbon pollution. The Household Assistance Package is giving extra assistance to eligible households to help with increased costs. The Government is committed to supporting small business in making the transition to Australia’s low-pollution economy in the future.

The Government has increased the small business instant asset write-off threshold to $6,500 from 1 July 2012. This will assist small businesses by improving their cash flow and making it easier to invest in more energy efficient equipment. There is no limit to the number of items that can be written off in a financial year. It is estimated that this will be worth more than $1 billion to small business in 2013-14 alone.

The Government has also established the $40 million Energy Efficiency Information Grants program, providing grants to organisations with an established relationship with small businesses, to deliver targeted and industry specific information on practical measures they can take to reduce their energy costs. The Government has announced the successful applicants under Round One of the Program, meaning that $20 million will be distributed to 28 organisations across a range of sectors.

The Australian Government is further supporting small business by promoting investment in innovative clean technology through the $1.2 billion Clean Technology Programs, which provide grants to help manufacturers improve their energy efficiency and to support investment in clean technology innovation across industry.

The Government has also announced a Clean Energy and Other Skills Package which will invest up to $32 million over 4 years to enable tradespeople and professionals in key industries to develop the skills needed to deliver clean energy services, products and advice to Australian communities and businesses.

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1OECD (2010a), Towards a Seamless National Economy, OECD Reviews of Regulatory Reform: Australia 2010, OECD, Paris.