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Keynote address to the Council of Small Business of Australia Summit

24 Jul 2013
 

Check against delivery

I would like to acknowledge the Turrbal people, the traditional owners and custodians of the land on which we meet, and pay my respects to their elders, past and present.

I would also like to extend my respect to Aboriginal and Torres Strait Islander peoples who are present today.

Thank you Peter [Strong] for that introduction.

Peter is a very effective advocate for small business and he is constantly in my office, talking to my Department and making real contributions on behalf of small business owners and operators.

Can I also acknowledge the Parliamentary Secretary for Small Business, Bernie Ripoll, a Queenslander who is here today after hosting one of the Australian Government's Small Business Forums this morning.

Bernie and I work as a close team to ensure that we continue to listen to you, work together with you and help you realise the best possible opportunities in running your small business.

COSBOA's strong and persistent voice has helped shape many government policies at all levels over the years and I am sure that it will continue to do so.

And once again you have put on a fantastic Summit.

I thank the National Australia Bank too.

I look forward to talking with many of you when I walk through the stalls this afternoon and I want to listen to you about the small business portfolio of the Australian Government.

Many of you have said that we have had too many Ministers for Small Business. At State and Federal level there have been over 30 small business ministers over the past five years, and I agree wholeheartedly that we need continuity in small business policy. I hope that I continue to be the Federal Small Business Minister for a long time!

I want to talk to you about our plans for a strong small business sector and in particular a strong franchising sector and I want to listen to you about how we can continue to work together to improve the operating environment for small businesses.

The Government recognised the importance of small business by returning the Small Business portfolio back to the Cabinet - the first time this has happened in a decade.

I sit at the Cabinet table and I know the policies we set as a Government, prioritise small business.

The entrepreneurial spirit and culture that drives small business is the defining element, it's the heart and soul of your businesses.

Small businesses employ around 4.8 million Australians, contributes around 34 per cent to the value added by Australian private industry and they are essential to the economic health of our nation.

The Prime Minister in his National Press Club address last week acknowledged this when he said that we must work with small business to build a new national competitiveness agenda.

The Government is committed to building an environment for small businesses to not only survive-but to fire up and thrive.

Fortunately we have laid down the important groundwork for this to occur.

The Australian economy is extraordinarily resilient and remains one of the strongest in the OECD.

We have had 21 consecutive years of growth, a record unmatched by any other advanced economy.

Since we came to Government:

  • Our economy has grown by 14 per cent,
  • We've climbed three places from 15th to now be the 12th largest economy in the world, and
  • We've moved up six places in the rankings on GDP per capita.

We are one of only eight countries in the world with a Triple A credit rating and a stable outlook from all three global rating agencies.

And while many advanced countries have struggled to secure economic growth and stability since the Global Financial Crisis, Australia did this with measures that were directed at supporting consumption and supporting small business.

The most important thing we can do for small business is to get the economic fundamentals right - small businesses are directly benefiting from an economy growing annually at over 3.0%; an official interest rate at less than 3%; inflation under 2.5% and one of the lowest unemployment rates in the world (5.7%).

That's the macroeconomic picture and I know it is often hard to look above the parapet when you're immersed in the day-to-day, but these economic fundamentals produce the incomes that drive growth and jobs; and in turn encourage small businesses to fire up.

The Government's role is also to improve dialogue with small businesses by providing easy access to information, advisory and training services.

For the first time in our nation's history, Australia's hardworking small businesses now have a direct voice to the Government, through the appointment of the first Australian Small Business Commissioner, Mark Brennan.

Mark commenced in the role in January this year and represents small business concerns to the Australian Government.

Mark is very practical and is working with me to ensure Government agencies take small business needs into account, including ways in which we can manage the regulatory burden on them.

Mark has met with over 230 small business stakeholders since he commenced six months ago.

Mark has established a simple rule: "no small business should fail through lack of access to information."

The Australian Government recognises that small businesses need a variety of avenues to access information. The Australian Government provides a range of free and low cost services to support small business owners.

Small businesses can ring our Small Business Support Line and talk to an agent with hands-on small business experience to get advice and referral services.

The Small Business Support Line has handled over 75,000 calls since September 2009.

It's not surprising that the top five enquiries are about registration and licences; government initiatives, grants and assistance; starting a business; legal, accounting and taxation services; business planning and diagnostic services.

The Small Business Advisory Services has been enormously successful, with excellent feedback from over 210,000 small business clients. That is 10% of all small businesses.

The program offers advisory services like business planning, marketing, sustaining and growing a small business.

Our dedicated business website, business.gov.au, also makes advice available to businesses Australia-wide, 24 hours a day, seven days a week.

And just this morning, Bernie Ripoll launched the Australian Government's updated Small Business Resource Kit.

These kits are available at the Australian Government's stand.

The Australian Government is also ensuring that small businesses are operating in a genuinely competitive market.

An example of this is our approach to Franchising.

Just walk through any shopping precinct - whether a Westfield or AMP mall or the suburban strip shopping centre down the road and look at the business signs and shop windows.

You will see the reliance on franchising as the business model of choice for many small businesses.

Franchising is a significant sector of the Australian economy and is dominated by small businesses.

Franchising employs over 400,000 people and contributes more than $130 billion to our economy.

In May this year, the Government released the report of the independent review into the Franchising Code of Conduct by Mr Alan Wein.

Our considered view is that the report is excellent.

So, today, I announce that the Government will restore national consistency in franchising by accepting Mr Wein's recommendations and will seek to implement them as soon as practically possible.

This means that a MacDonalds franchise in Perth, Western Australia will operate under the same rules as one in the Queen Street mall here in Brisbane.

That's about simplicity and consistency.

We should expect nothing less.

We will introduce certainty around the obligation on both franchisors and franchisees to act in good faith.

Good faith is as Australian as a beer and a meat pie, it's as Australian as a 'fair go' and it's the gold standard in open and transparent business relationships.

The Government will also increase flexibility and strength in the enforcement regime that applies to the sector by making pecuniary penalties and infringement notices available as remedies for breaches of the Code.

These reforms are important as they clarify the obligations under the Franchising Code and ensure that the courts and the ACCC have the appropriate powers to deal with rouges in franchising.

The government will enforce a strong disclosure regime which addresses changes in industry practice, changes in the economy and changes in consumer habits, without unnecessarily increasing the administrative burden on the industry.

It is clear that further consultation with the sector is necessary before legislation.

I think it is fair and reasonable that my Shadow Minister, Mr Bruce Billson be given full and open access to all materials relating to this and that is why I have already provided him with a detailed briefing on Mr Wein's report and will continue to provide him with such briefings on all aspects of the proposed legislation as he wishes so as to encourage bipartisan support for these reforms.

Whoever wins the election, these reforms should be completed.

To ensure that we get the balance right, the Government will continue to prepare a detailed regulatory impact statement.

And then we will progress the necessary regulatory and legislative amendments at the earliest possible time, I hope before Christmas.

These changes improve the regulation of franchising in Australia to ensure the growth of the sector by providing certainty and confidence in the franchising system for all franchise operators.

The Government was encouraged by the strong and positive response to its consultation paper on the recommendations.

More than 160 responses were received from a wide cross-section, including current and former franchisees and franchisors, industry associations, the legal community and academics.

Our approach throughout this process demonstrates best-practice in engaging with small business and it has resulted in a package of reforms which will provide a nationally consistent and strong franchising system that seeks to let franchise businesses thrive across the continent.

I want to take this opportunity to thank Alan Wein, the Franchising Council and the many small business franchisee operators who provided valuable input to this process.

I would also like to thank Bernie Ripoll who has done the real work in this area. These reforms arise directly from the bipartisan report he compiled as Chair of the Parliamentary Joint Committee on Corporations and Financial Services in 2008.

I acknowledge too the ongoing support of several former Ministers for Small Business: Fran Bailey, Chris Bowen and Brendan O'Connor.

I also want to address an important issue for many small business operators and use it to demonstrate how we can work together; small business and government to improve the small business operating environment.

This issue is regulation or 'red-tape'.

The Government is committed to reducing red tape burdens for small business.

Claims that small business has been impacted by every one of the 22,000 new regulations introduced since 2007 are misleading.

For example, over 3,400 of these were Airworthiness Directives issued to maintain and enhance public air safety.

Countless others relate to the non-business functions of government such as family law, military justice and homelessness.

Regulation is not always bad. It can confer real benefits - take for example the 4,200 legislative instruments which see Australian businesses benefit from tax breaks through Tariff Concession Orders.

The Government has repealed over 4000 regulations since April and is taking action to slash over 12,000 from the statute book this year.

We have also put in place systems to identify and limit the implementation of burdensome regulation.

For example, the Government's regulatory impact analysis promotes minimum and effective regulation which is the best way to address compliance costs and improve regulatory outcomes.

We are always on the lookout to see what we can do to remove unforeseen and unintended regulatory burdens.

But red tape cutting can be apparently small: recently we cut the red tape burden for Australia's restaurant and café owners by amending the Australian Consumer Law to remove the need for separate menus on weekends and public holidays.

In April, I was made aware of the small business concerns regarding a regulation that required small business operators like newsagents and service stations to manually rotate graphic health warnings on cigarette packets.

I met with many small business operators who demonstrated to me how this would be incredibly burdensome and Peter Strong came to see me about this.

The Government took this to heart and whilst we were always going to maintain the policy intent of a consistent public health message about the risks associated with tobacco use, we reduced the regulatory burden by removing the obligation on retailers to rotate the health warnings on tobacco products.

This amendment has recently finished public consultation through the ACCC and an unintended regulatory burden on small business will be removed.

I would like to acknowledge the Minister for Competition Policy and Consumer Affairs, David Bradbury who acted decisively after hearing these concerns. This is just a small but very practical example of how small business can work hand in hand with government to make day-to-day operations a lot easier.

Before concluding, I want to touch briefly on a significant small business resource.

The National Broadband Network (NBN) has the opportunity to dramatically change the cost base and the dimensions of small business operations.

The NBN will unlock the efficiencies of cloud computing to many businesses, technologies like WIFI adds flexibility by cutting capital expenditure and by removing the need to install, wire and maintain large and expensive data and computing systems.

It also opens your business to the world.

Because so many of Australia's more than 2 million small businesses operate from home offices, your fibre-to-the-home network is also a fibre-to-your-business network and a fibre-to-your-customer network.

We are building the NBN to every small business in Australia and connection is free.

We understand that small businesses cannot afford up to $5000 that the Coalition will charge to connect to your NBN.

This is a great example of the government working hand in hand with small businesses to open up opportunities right across our country.

As the NBN expands, we can only marvel at the possibilities.

As the nature of the Australian economy evolves, one thing is clear, small businesses will fire up.

Peak industry associations like COSBOA are important to all businesses as they provide important support, assistance and are able to inform policy makers about how we can genuinely solve problems and make it easier for you to do your jobs and run your businesses.

So, on behalf of the government, thank you for your hard work, the long hours and for giving up personal and family time.

Thank you for the jobs, the service, the productive lives you live.

Thank you for making our communities, our cities, towns and regions better places.

Thank you for all that you do.

Media contacts: Minister's office (02) 6277 7930

 
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