Sydney Institute Address Australia: a small business success

Every morning, almost one in two Australians goes to work in a small business.

Every morning, the wages of 5.6 million of us are paid and our communities are served by 3.2 million small businesses.

So every time Australia’s economic indicators show more people in work, more growth in our economy or even more choice on our supermarket shelves, the sector doing the heavy lifting is always the same:

Small business.

Australia is a story of small business success.

So tonight I am going to share with you that story of hard work and determination.

That story of new ideas and ventures.

That story of economic success.

Tonight I will share with you the story of small business and why the Liberals-Nationals in Government see small business as sacrosanct.

And why it’s in our values to always have your back.

For the Government, it starts with injecting confidence.

For a business to pursue a new idea, to hire another Australian or to give someone else a go takes courage.

It’s the belief that the service you offer will be something consumers want.

The belief that the person you hire will help your business grow and that your work can fund the wage of that person.

The belief that the economy is in need of more people like you pursuing their idea.

So as a Government it’s our role to respect that. Our role is to respect you.

It’s our role to applaud those Australians for whom the challenge of starting a new small business is equally entwined with the excitement of opportunity.

And there is a lot of excitement in starting a new small business.

And it’s our job, the Federal Government’s job, to make your job easier.

When we can do that successfully, small businesspeople create jobs. Wages can grow in the economy. So too a modernising workplace and marketplace can keep small business front and centre.

But the challenge of this change and adaptation is vast. So small business needs people who share its passion, who understand its struggles and who want to champion its success.

And the Liberals and Nationals’ Government in Canberra is the best friend small business has ever had.

The Liberals and Nationals in Government have had small business at the front of its policy agenda since coming into Government in 2013.

We started from a low base, a clean slate if you will, after the chaotic years of Rudd-Gillard-Rudd.

We hit the ground running.

We introduced the $20,000 instant asset write off.

We reduced red tape by $5.8 billion.

We implemented unfair contract legislation.

We continue to engage small business in procurement jobs and pay them on time.

We signed free trade agreements with China, South Korea and Japan.

We established the Australian Small Business and Family Enterprise Ombudsman.

We changed the definition of small business from $2 million to $10 million for companies or $2 million to $5 million for unincorporated businesses.

We legislated small business taxes to fall to 25 per cent over the decade for companies and a 15 per cent reduction for unincorporated businesses.  

We have worked tirelessly with the Senate crossbench to achieve these reforms regardless of relentless Labor obstruction.

I am genuinely energized by what this government has been able to achieve for small business and by small businesspeople themselves.

Upon being appointed the Minister for Small Business I committed to visit as many small businesses as I could.

I have visited every state in the first three months of the job and now in a little over a year, I have visited more than 60 towns in electorates which are National, Liberal, Labor, Greens and independent, to understand in explicit detail the conditions of the sector. To hear feedback.

That’s one of the most important jobs, if not the most important job of any politician; to hear feedback and importantly to act on that feedback.

I know the best ideas don’t come from the bureaucracy.

They don’t come from politicians.

They come from people at the coalface. 

They come from the people who have a stake in the sector, the people who have risked it all to follow their dream.

Small businesses succeed by providing their goods and services in a manner which is more valuable than their competitors.

They need to be proactive, agile and courageous, and they need a Government they can trust will back them to achieve their potential.

Similarly, Government – through policy – needs to create the certainty and the business conditions in Australia which are modern, dynamic, non-intrusive and supportive of the small business, demonstrating we are on their side, spurring them on to achieve their full potential. 

Tonight, I want to convey to you my forward policy agenda for small business.

Payment times is an issue that is raised time and time again right across Australia.

Over the past six months, analysis by Xero shows 65 per cent of small and medium enterprises had invoices overdue by more than 30 days.

And unsurprisingly, small and medium enterprises which experience late payments are three times more likely to go out of business than those which receive payment within 30 days.

I am reaching the final stages of preparing a response to the Australian Small Business and Family Enterprise Ombudsman’s payment times inquiry.

And I can promise you I am not going to stand by while big business dictate unrealistic payment terms and times to small business on a take it or leave it basis. 

To me, this constitutes a breach of our unfair contract legislation.

The Federal Government is already a model small business payer and is attempting to influence big business into doing the same.

Project bank accounts, mirrored payment terms on Government jobs and extending swift payment expectations to Government agencies are high on my agenda.

I commend the Business Council of Australia for implementing its voluntary payment code, which sets the expectation of big business’ payment to small business within 30 days. It’s a good start.

However, don’t for a second think I have discounted or ruled out legislating payment terms. If behavior does not change, and the scant regard for small business isn’t alleviated, all options will be on the table. But the voluntary code is a good start and I will be monitoring it very closely.

There are opportunities for small business today that shrink the world. We live in a global village.

Small businesses have access to technology and distribution networks and markets never before experienced.

We don’t just surf online, we live online.

It is my ambition that small businesses have access to the knowledge for them to be competitive overseas.

It is my ambition that small businesses have access to the equipment for them to be competitive overseas. 

I will work closely with my Treasury colleagues as they finalise the inquiry into the black economy to see if there are opportunities to synchronise the crack-down on the black economy and transitioning small businesses of all shapes and sizes to embrace technology.

Technology also has the potential to significantly shorten payment times and terms, in addition to the payment times inquiry I mentioned earlier.

 Regional vision

My Party – The Nationals – are passionate about decentralisation.

That’s why the team – well lead by Deputy Prime Minister Barnaby Joyce and Minister for Regional Development Senator Fiona Nash – are asking Ministers to report on agencies within Government which could work well outside of Canberra.

That’s why the team is working to bring jobs to places such as Wagga Wagga through the Rural Industries Research and Development Corporation and the Australian Pesticides and Veterinary Medicines Authority to Armidale, along with a number of others.

Our Nationals’ team want to build on the legacy of moving the Australian Taxation Office to Albury – a little more than an hour’s drive from my hometown – that was in May 1976.

I have not long got off the phone to the Albury Mayor Kevin Mack who tells me that in May 1976 on the corner of Olive and Swift Streets the ATO opened its office, a manager and eight staff.

And now what is it? 1200 staff. Kevin Mack as the Mayor is proud of that and he should be.

Its boost to the local economy and the public service continues to this day.

But there is a misconception The Nationals are solely about moving public servants to the regions.

The Mayor suggested we move some of the corporations also and provide incentives to do so and we are considering just that.

Decentralisation is much bigger than this. Much bigger.

Moving Government agencies out of the big cities to regional areas is the pebble in the pool, the thing which starts the ripple from one little change expanding and growing.

In my own region corporate decentralisation from Mars at Albury-Wodonga has brought hundreds of jobs, just like the ATO, thousands of people and much in investment.

 The company has continued to grow and we have grown with it.

In Wagga Wagga, our three defence bases – including the ‘Home of the Soldier’ at Kapooka and RAAF Base Wagga – has supported local families, local contractors and local futures for decades.

This is a model from which Australia can build. 

Every new job in the country is a new start for an Australian family. It’s a new beginning for one of our communities and a new adventure for the Australian economy. 

And it’s what our modern trading partners do too.

Connectivity and synergy are not just buzzwords. It’s not just part of a corporate prospectus on Pitt Street, it’s the basis of the movement which is building our country and building resilience along with it. 

There is no better example of resilience than in small business and there is no better example of resilience than within regional Australia.

I say this to the Sydney Institute because this is our vision. These are our people and this should be our future.

Tremendous to see Craig Shapiro in the audience. Craig is a financial services expert – a big-end-of-town-boy and I don’t think he’d mind me calling him that. He is one of a growing number of city investors looking to regional Australia as a viable, profitable exercise and I heartily commend him for it.

He is CEO and co-founder of the Blue River Group which last year purchased the 94-year-old Wagga Wagga dairy company Riverina Fresh.

They have transformed the iconic company – automating it, looking for new markets and investing in new products – whilst keeping the same number of employees.

His is a fantastic corporate “decentralisation” story and we want to hear and see more of it.

Sit in the pub on a Friday night in a town such as Grong Grong in the Riverina region and you will get some frank advice as the local MP.

You’ll meet people who own the pub – such as Tad and Kay Obudinski. Good people who’ve run the pub a long while and have poured their heart and soul into making it something they can sell and from which they can happily retire.

You might hear about Tad’s VFL career. A full-forward for South Melbourne in the ‘70s – now your own Swans from here in Sydney. Two games, no goals. But a VFL career at the highest level nonetheless.

You might hear how the season’s going – whether grain prices are good and what Kay has on for tea – bangers and mash – for the truckies who traverse the nation taking product from farm gate to dinner plate.

But you’ll also hear about jobs.

Local jobs. Australians’ jobs. Jobs in Wagga Wagga and surrounds. Jobs worth travelling for and jobs someone’s done many, many miles away.

You’ll hear that – more often than not – it’s small business which provides those jobs.

Jobs are the mainstay of small business in Australia.

It’s something broader than a philosophical argument, it’s more than an economic model. It’s respecting that small businesses are the real drivers of jobs growth in Australia.

Every single Australian – no matter their age, their location, their income – wants to see more Australians in work.

A job is more than a number on a spreadsheet. It’s more than an indicator to the market and it’s more than a figure for the future.

A job is food on the table.

It’s bills paid on time.

It’s the dignity and respect that someone has the faith in you to deliver what that organisation needs, wants and expects.

And for more Australians than not, that very dignity and respect is inspired by small business.

So this leads me into what I am doing to help – as part of The Nationals in Government – to help small business create more jobs and have a go.

It’s easy in politics these days to get caught in an echo chamber.

I say this as a journalist with 21 years’ experience – the scale, pace and intensity of rolling media cycles, of social media, of immediately ruling something in or ruling something out.

It’s shifting the focus of some away from Tad and Kay and the fact they are having a go in small business in a small country town.

It’s shifting those people we listen to away from those who’ve done it before to those who have a character limit.

So for me, the most important thing I value today – as I have everyday I’ve been in Parliament – is to listen.

I courted some nationwide attention when I went to the Royal Hotel at Grong Grong a few years ago.

I had called in to the Royal for tea – Kay’s famous bangers and mash – and a great local OJ as I often do.

It was Australia Day. Prince Philip had just got a Knighthood and – rather than the matter at hand I really thought the focus was shifting away from the people we need to listen to.

So I said so to the national media.

I didn’t get into politics to play games, to background, to see promotion as a prize only unto itself and not to work hard.

I got into politics because I wanted to champion my community, its causes, its ideas, its people.

That was me as the Editor of The Daily Advertiser in Wagga Wagga aged 27.

That was me as the small business owner whose publishing business helped a Wagga Wagga printing firm with which we did business move to a new building, buy a new four-coloured press and put more people on just to keep up with our work.

That has been me for decades. And that is still me today.

Because more important than your character count online is how you count your character in politics.

And more importantly it’s who you fight for. Because the people and the issues you fight for in Parliament speak volumes about your values.

If you turn your back on the industry which put food on your family’s table for eight years – my own days in small business – then you’re in Parliament for the wrong reason.

Equally, if you don’t use your opportunities to make it easier for those who follow, then you’re in Parliament for the wrong reason.

I am in Parliament for a very simple reason – the people I meet each and everyday.

Our regional people.

Our farmers.

Our people in small business.

Our people who are doing it tough.

Our resilient people.

They are the people of my community.

I am proud of them and I want them to know that I’m doing the very best for them.

But more than that, as the Small Business Minister it is all people in small business that I now champion.

And certainly in the Federal Parliament I do everything I can to make sure their voices are heard.

They are the ones who give me the privilege to stand in the Parliament as a local member and minister and be their voice.

And they are the people to whom I am always responsible and for whom I will always fight.

This is not some practiced political line – it’s something I have thought for a very long time, starting when I was a journalist and then editor of my hometown’s newspaper over 21 years.

There is something different being a community advocate in the country.

Because our towns are smaller, more people know who you are. You work with people in a number of settings – it might be at the newspaper, the canteen at the footy club, the volunteer coach of the school cricket side, the local P&F.

And when you’re a community leader, to them you are always accountable.

So this is something I think about each day as a Parliamentarian.

Mine is not an electorate that votes for a brand, nor is swayed by what one big party says about the other in the city.

Ours are campaigns by locals. For locals. About locals.

So there are times where the challenge of being a Parliamentarian is broader than just the party line.

And for me this was so in my first term. My Riverina electorate then encompassed the large Murrumbidgee Irrigation Area and in it the many communities the sole being of which is centred on water.

And the Parliament had to consider the Murray Darling Basin Plan.

This was a plan which caused angst in my communities whether you were a farmer or not.

Water is that region’s lifeblood and city-centric politicking sought to see these proud communities become a shadow of their former selves.

So at this time when we were tested, our community was at its best.

We stood up, we defended our region and we told the story of the region.

Of our production.

Of our people.

Of our potential.

The original guide to the draft to the plan would have been a death-knell for many small businesses in that community.

Its social and economic impact would have been vast, and the challenges which faced that community under the proposed water cuts would have been immense.

So when the Bill eventually came before the Parliament I knew I had to be their champion.

Being my community’s champion meant crossing the floor against my own colleagues and moving a motion which would have disallowed the Murray Darling Basin Plan.

Believe me, there were people in Parliament who warned me not to.

There were others seeking to move the motion before me – from seats thousands of kilometres away and play politics with my people.

But for me, my job was clear. No matter the politics, it would be me – and only me – who would walk down Banna Avenue in Griffith that next week and have to look my constituents in the eye.

So I moved the motion of disallowance and as a result the Liberals and Nationals committed to cap water buyback at 1500 gigalitres if we were elected.

That was legislation we delivered a little more than two years ago and confidence in these communities is now high.

With good seasons and the hope of more rainfall, small businesses there continue to hire more Australians – especially at harvest time – and are very big contributors to Australia’s tremendous growth in export.

This is a story about my values as a Parliamentarian. My values as a person.

And now these are the values I bring to being your Minister for Small Business.

I am the first Small Business Minister to call rural and regional Australia home. I am the first from the National Party and that’s why I spend as much time as I can out listening.

I mentioned it a bit before, but for me I knew the best ideas weren’t in the bureaucracy or the bubble, or indeed the ‘boarding school’ that some people call Parliament House.

They are in barber shops. In bakeries. In family-owned bus lines. In the bush and the ‘burbs in equal measure, and so I wanted to get out there and listen.

I have travelled to every state and territory since I became the Small Business Minister and to date have held more than 60 forums in cities, towns and villages across this country.

Because I remember what it’s like to run your own small business.

The hours. The hard work. The paper work.

I also know that any extra bit of relief – whether that’s through taxes or red tape cuts – helps you pursue that goal.

And that’s why I take your feedback seriously.

Thanks to the feedback I received from small businesses around Australia, the popular $20,000 instant asset write-off was made available to thousands more small businesses and for another 12 months.

Because to back small business with tangible help is how we can help our economy grow.

Because to back small business helps Australians’ jobs and wages grow.

And to back small business is to back a brighter future for our country.

The feedback I hear means something to me, it means a lot to me.

To spend time with a local small business owner in their operation, over the farm gate or kitchen table or shop counter is a real joy.

And I meet some incredible Australians.

Let me share a couple.

The first is Alana and Peter Laliotitis.[1]

They own the Kouzina Greco — a bustling Greek café and family restaurant in the heart of Parramatta.

Alana and Peter have been serving their signature lamb dish for about 16 years.[2]

Theirs is a café whose busiest day of the year – Mother’s Day – is a must-do on many families’ plans.

But in order to make the days of mums from across Western Sydney, they needed new equipment to increase productivity and make meal production more efficient.

So they decided to use the instant asset write-off to purchase a new oven and grill to upgrade their kitchen.

Alana told me: “It helped immensely … [it was] necessary for us to produce good food, for staff morale, and it actually had a chain reaction.”

And those words – a “chain reaction” – have stuck with me.

It’s a terrific story of a small business supporting other local small businesses.

It’s a fantastic story just like those which I am sure we all know and which keeps many Australians in jobs, doing what they do best.

Alana purchased the equipment for her kitchen from local suppliers and had a local tradesperson to do the installation work.

That multiplier effect is what I relied upon when I ran my own small business.

It’s local people knowing local people and recommending them to other locals to get a job done.

It keeps money flowing around local communities and is a much-needed injection of confidence in many places which need it.

Another story is that of Kate Marland from Bundaberg.

A few weeks before I went to Bundy she took over the family jewellery store from her parents and sought to expand it into some new and changing local markets.

They make a lot of the stock themselves and used the instant asset write-off to purchase new printers and computers to make Kate’s dream a reality.

Kate also wants to use the $20,000 write-off extension to purchase a new drill so her dad can more efficiently make the product she sells.

I met Kate and her mum and the pride they both have is palpable.

It’s just like the stories of so many family enterprises which have served this nation over generations.

And it’s exactly what inspires me to keep working on their behalf.

But I know there’s more work to do.

And I remember another thing that adds up — that takes far too much of small business’s time — is red tape.

That’s why the Government has already slashed $5.8 billion in red tape, with incentives for further cuts on the table.

One business owner I had the pleasure of meeting was Andrew Kaigg.

He owns the Nomadic café in Berwick, Victoria.[3]

Andrew gets the big picture — he pointed out the stresses faced by many small businesses, particularly for those in the hospitality game.

There are the fridges to re-gas, electricity bills to pay and hidden costs in the form of red tape.

Andrew is a genuine contributor to his community, in particular the local Country Fire Authority.

And he said the costs of running a small business would be easier with a tax cut and simpler paperwork.

That’s something I hear echoed around the country.

But so often the bugbears I hear is not the paperwork I can control.

And that’s why the Liberals and Nationals in this Budget will provide up to $300 million to states and territories to remove unnecessary regulatory barriers.

So, to give you a practical example, this might mean we reward a State Government for reducing land-use planning restrictions, making it easier for businesses to fit-out their shops.

This initiative, of course, dovetails nicely with our other previously-announced measures to reduce red tape — including the simpler Business Activity Statement which started on July 1. It will also complement the rolling out of the single-touch payroll to make doing wages simpler for small business.

In tackling red tape, we plan to take the pressure off small businesses — the local job creators — so they can get on with running and growing their businesses.

Each of these are runs on the board for small business.

Each of these are practical measures of support from a Government which gets small business.

And each is the result of the values we have – and I have – as your Minister.

Small business is Australia’s economic success story. Our jobs are growing, there are more small businesses and the future of the sector is bright in this country.

And although there are challenges which others would have beset small business, you are the people for whom this Government and I will fight every single day.

You are the ones who create the jobs.

You are the ones who give people a start.

You are the ones who keep our economy strong.

So my message – and the dividend of our delivery in this past year in particular – is very simple for small business.

If you’re thinking about it, go for it.

If you want to hire someone, go for it.

If you want to diversify or expand, go for it.

We are the Government for small business made up of people who get small business.

And we will back you every step of the way.

Thank you.