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Address to the NAB COSBOA Small Business Summit



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

Address to the NAB COSBOA Small Business Summit

01 Aug 2012

The Sebel Albert Park Albert Park, Melbourne, VIC

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It's a pleasure to be here today to open this summit, which shows every sign of living up to its billing as the top small business event of the year. It's the 10th such event, so it certainly has generated considerable momentum. And I'd like to congratulate the Council of Small Business Australia for your achievements for small business as an organisation and through the conference over that time.

This summit is a great opportunity for small businesses to gather together, to network and to share knowledge and ideas.

Each one of you here in this room plays a critical role in the Australian economy. Small business is the backbone of the economy. More than two million small businesses employ almost five million Australians and produce about one-third of our economic output.

And you can be assured that the Government values your contribution. We are determined to create the environment in which small business not only survives, it thrives.

Business environment

That's why we are proud of our nation's economic record. If you read some of the more hysterical commentary at the moment, you could be forgiven for thinking the economy is about to fall into a hole. It isn't. Look at the facts. We have the lowest inflation for 13 years. Unemployment half the OECD average. Growth with a four at the start. The official cash rate is lower now than at any time under the Howard Government. A massive pipeline of investment. Growing real wages and consumption.

Of course, there will always be think tanks and forecasters who know they can get a cheap headline and a news grab if they make dire predictions about the state of our economy. I note that one economic forecaster last week predicted the end of the mining boom in two years' time. But I'd take that with a grain of salt - considering they've been making the same prediction for the past eight years. They were wrong in May 2003, September 2004, January 2005 and May 2006 - and there's no reason to believe that

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this time they'll be right.

Tax reforms

We believe that the benefits of the mining boom belong to all Australians. That's why we are spreading those benefits across the economy through our tax reforms, which will help small businesses.

The new loss carry-back initiative will create extra cash flow to help businesses invest and innovate with confidence. Companies may be able to carry back up to $1 million of losses each year, providing a cash benefit of up to $300,000 a year. We estimate this will benefit around 110,000 companies in its first four years, of which it is estimated around 90 per cent will be small businesses.

All small businesses can take advantage of the instant asset tax write-off, which allows them to write off after one year each asset that they buy costing less than $6,500. This will pump more than $1 billion back into small businesses in 2013-14 alone - freeing up cash flow and also saving time and paperwork by simplifying the depreciation schedules.

As part of the personal income tax cuts attached to the Clean Energy Package, we're trebling the tax-free threshold - which will be of benefit to many small businesses which operate as sole traders, partnerships or trusts.

On-time payments

We know that a steady cash flow is vital to small business survival. The Australian Government leads the way in paying its bills on time. In 2010-11, the Government paid nearly 98 per cent of its invoices from small business within 30 days.

While our payment performance has been generally good, there is always room for improvement. So we have strengthened our policy requiring agencies to automatically pay interest on small business accounts where bills are 60 days overdue.

Red tape reduction

We are also pushing ahead with a strong anti-red tape reform program. Our National Business Names Registration Scheme and the Small Business Superannuation Clearing House are just two examples of reforms that directly benefit small businesses.

Since May 28, businesses have been able to register their name nationally in one online registration and for one low fee, instead of having to register separately in each state and territory. More than 45,000 businesses have already taken advantage of the new system and registered their names nationally.

To make paying superannuation contributions easier, we introduced the Small Business Superannuation Clearing House. This free service allows small businesses with fewer than 20 employees to pay all their super contributions in one simple, online transaction, instead of making individual payments to separate funds for each employee. This free service can save small businesses as much as eight hours of paperwork each quarter.

Low carbon economy

And we kept small business in the forefront of our minds when we designed the carbon

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price. Putting a price on carbon is the most environmentally effective and cheapest way to address climate change and reduce carbon pollution in Australia.

It's important to remember that no small businesses will have to pay a price on carbon pollution directly or, for that matter, have to do any additional paperwork.

We have a number of initiatives that will assist and support small businesses to adjust to a carbon price and to understanding the impacts. The small business instant asset write-off increase I mentioned earlier will increase cash flow and assist small business to invest in more energy efficient equipment. The $40 million Energy Efficiency Information Grants program is funding organisations like industry groups to deliver industry specific information on how businesses, particularly SMEs can reduce their energy costs. For example, the Australian Hotels Association will receive over $400,000 to deliver practical, tailored energy efficiency information to their SME members operating pubs and hotel accommodation.

Small business advice

Part of providing a foundation for small business to prosper is having access to free or low-cost advice and mentoring. I'm sure you're aware of many of the services we are providing and supporting.

Enterprise Connect helps small and medium businesses develop skills and knowledge to improve their productivity and maximise growth.

At a time when the Government was looking for avenues to bring the Budget back into surplus, we were able to secure $27.5 million to continue the enormously successful Small Business Advisory Service for the next four years, and then beyond. Applications for first round funding closed last week and I expect to announce successful projects later this month.

Our Small Business Support Line continues to be well received.

And the Australian Small Business Commissioner who will begin work in January will give small business a strong, independent voice. The Commissioner will work with me to ensure all Government agencies consider small business needs when developing policy.

We know that sometimes governments can easily, albeit inadvertently, impose new burdens on the sector when developing policies. So the Commissioner, as well as the Small Business Advisory Committee, will advise me on regulatory impacts, compliance costs and emerging small business issues and trends.

National Broadband Network

Before I conclude, I'd like to talk about the National Broadband Network and what it means for small business. Last night I was lucky enough to meet the winner of Telstra's 2012 Victorian Business of the Year award. BikeExchange.com.au has grown from being a great idea by two cycling enthusiasts in 2007 to an international e-marketplace for all things cycling which receives more than one million hits a month. Jason Wyatt and Sam Salter deserve recognition for identifying an opportunity to bring together cycle manufacturers, wholesalers and retailers, tour operators and enthusiasts in one e-marketplace. The website now lists more than 50,000 products and 200 bike holidays, and is open 24 hours a day, seven days a week.

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This is an example of how the National Broadband Network will open up the world to small businesses - regardless of whether they are in Footscray, Geelong, Bendigo, Wonthaggi or the inner CBD.

Through initiatives like digitalbusiness.gov.au, we are assisting businesses build their online showrooms so they can compete more easily in a national or global marketplace and increase their customer base.

Before I finish, I reiterate our determination that small business has easy access to relevant information that assists them to make well-informed business decisions.

Small Business Resource Kit

Today I am pleased to be able to launch two important new resources for small businesses.

The first is the Independent Contractors: preventing and managing disputes publication, available in hard copy in your conference packs but also through business.gov.au.

And the second is the updated Small Business Resource kit - it's on the USB drive also in your conference packs.

The kit contains links and directs small business people to essential government information and tools, in a simple and easy to access way, on a USB drive. It includes our popular checklists for starting and growing your business, publications for independent contractors, industry information and research, a number of online resources, and much, much more. It's designed to save people time and money by putting the essential references in one place so they can get on with running their businesses.

Conclusion

These two resources underscore the value the Gillard Government places on the small business sector.

We will continue to work to ensure the economy remains sound and progressive, helping people make ends meet and I assure you that I will be a strong voice for you inside the Cabinet.

Thank you for your work for small business and Australia and thank you for inviting me to your conference, I look forward to continuing the discussion during your questions.

ENDS

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

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