The Australian Small Business Blog

Wednesday, July 22, 2015

2015 National Small Business Summit - Part 1

by Dr Greg Chapman

The annual National Small Business Summit was held in Sydney last week. It was attended by peak body and regulator representatives as well as organisations that support small business. As always, the politicians were also there. Here is my summary of what I heard and my impressions.

John Barilaro, the NSW the Minister for Small Business opened the conference. He used to run a niche manufacturing business with his wife, but she runs it now on her own.

Barilaro was refreshingly honest. While there has been 190,000 jobs created during the reign of this government, he was forthright in saying, that government didn’t create the jobs, small business did. In fact, government reduced the public service by 15,000 jobs. What the government did do was to invest in infrastructure, and reduce the size of government. He also pointed out that while they did reduce red tape, he was honest enough to say, that much of this was redundant. Barilaro made the point that governments aren’t innovators, they are not proactive, they are reactive. All they can do is to create an environment for others to innovate and build businesses and create jobs.

Chris Jordan, ATO Commissioner, spent most of his presentation on the simplification of ATO processes to make compliance less burdensome. Coming from the private sector (NSW KPMG Chairman), his focus is to drive simplification, and also to make sure that disputes are better managed than they have been in the past. For example, rather than just sending out non-compliance letters, people are now directly contacted. He has found that 30% of all issues were addressed with a single phone call.

Jordan also mentioned that the ATO will be launching a new business performance tool so you can see how your business rates against others in your sector using their extensive database. I will write more about this when it becomes available. (The current Benchmarking Tool is available here )

Harper Review of Competition Policy
There were a number of speakers on this topic. The government is to formally respond to this review at the end of the year.
The first of a panel of speakers on this topic was Michael Schaper, Deputy Chair of the ACCC. He summarised some of the recommendations. One of which was price signalling should be removed, except for banks. Small business are the victims of this. Another was the removal of misuse of market power, as it was too hard to prosecute. Provisions for price discrimination should not be introduced, and collective bargaining should be made easier, particularly in the agricultural industry to balance the power of supermarkets.

Jos de Bruin, CEO of Master Grocers Australia/Liquor Retailers Australia was concerned about the 75% market duopoly of Woolworths/Coles, particularly in regional areas when a supermarket comes into a town and kills the local butcher, green grocer and other small businesses. They also engage in ‘land banking’ – the buying up of land to block completion.

Matthew Lobb, GM Industry Strategy and Public Policy, Vodaphone- summit sponsor, said that wherever it has operated, it was a challenger brand against an incumbent with existing rules designed to favour them. He said that lack of competition in Australia costs people from $230 (in the cities) to $600 (in the regions) each year.

Su McClusky, previously the CEO of the Regional Australia Institute, was on the Harper Review Panel. She said the fundamental issue for the review was choice, and a level playing field for all, but there wasn’t one when it came to big vs small. She emphasised that Market Power is not a crime, just its misuse. The Effects Test should not be the impact on a person or individual business, but on competition.

McClusky said they also sought competitive neutrality for government insourcing in competition with business. This was particularly an issue with local government. The review also wanted to dump the Deputy Chair ACCC Small Business (Schaper), because they felt that all commissioners should consider small business impacts, not just one. Unsurprisingly, Schaper disagreed.

Bill Shorten, Leader of the Opposition, gave a speech after dinner. While largely generalities, which I guess is to be expected at this stage of the electoral cycle, he tried to emphasise that he recognised the importance of small business, its competitiveness (they supported the tax cut for small business), and he understood the importance of profit for employment and good wages.

For all his professed pragmatism, Shorten struck me as the Malcom Turnbull of the Labor Party. Both are (were) opposition leaders, neither of their parties support their more centrist vision (Socialism is still a key plank of the Labor Party Constitution, and the Liberals are at the very least sceptical of man-made climate change), and neither man will ever be Prime Minister.

More tomorrow.

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Dr Greg Chapman is the Director of Empower Business Solutions and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.

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