PETER SWITZER:
Well the big promises of the Abbott Government were to rid business of red and green tape and there is a big day ahead when Parliament will address unreasonable regulations. To explain it all we have Bruce Billson, Minister for Small Business in the Abbott Government.
I’m excited, you know being a small business follower for a long time and actually running my own operation, the promise that you guys would – is it 18 March or 19 March?
MINISTER BILLSON:
Yes 19 March is repeal day and you’ll see more than 8,000 regulations repealed on that day Peter, including more than 100 pieces of legislation – that’s a down payment, a start on our commitment to pull $1 billion of compliance costs out of the economy. This will take out that gumming up effect that excessive regulation has on enterprising Australians.
PETER SWITZER:
I’m sure there will be people at home saying now hang on Bruce, we’ve heard Government promise this red tape reduction thing, government after government, Liberal and Labor – the whole bit. They’ve all promised it – but you’re talking 8,000. Where do these 8,000 come from?
MINISTER BILLSON:
Well they have accumulated Peter. Under the six years of Labor we had 21,000 new or amended regulations introduced. In fact, we’ve talked before about the World Economic Forum’s benchmarking of global competitiveness where we went from 12th to 21st but more worryingly, on government regulation and impost, we went from 68th to 128th in the world. So we’ve seen the stock of regulation grow and under the previous government it seemed like no problem couldn’t be fixed without more regulation. We’ve said we’re going to reduce that stock and if there is a need for new regulation into the future, we’re going to make sure it has been rigorously evaluated through a regulatory impact statement. If there is a need for new regulation, we will make sure we offset it whilst we set about reducing and repealing some of the stock of regulation that we have, and accounting for the cost of complying with that red tape.
PETER SWITZER:
How can you be sure that 8,000 pieces of regulation will go on this day? Surely Labor will stand in the way or the Senate will stand in the way?
MINISTER BILLSON:
Well I can’t believe they would, given that red tape is such an enormous impost on our economy. We know it’s impeding our competitiveness and we know particularly for small businesses Peter that don’t have a compliance department, it takes them away from growing their business, servicing their customer or eats more into their weekend time on a Sunday when they should be thinking about what’s next with their business. So I can’t imagine Labor would stand in the way. When they were in Government they actually put the paddles to keep alive regulations, that under the Howard Government were set to repeal under automatic sun-setting clauses, but they hadn’t done the work to work out whether there was still a case, a policy justification, for those regulations so they extended many of them. We’ve got to deal with that stock of regulation and make sure it doesn’t grow and account for the cost it has on our businesses.
PETER SWITZER:
Okay, can you give us an idea of a classic regulation that you think really stifles or frustrates small business which is going to go on 19 March.
MINISTER BILLSON:
I’ll give you one example – the government’s Paid Parental Leave Scheme. For no good reason, no justification what soever, the previous Labor Government insisted that a smaller employer be the pay clerk for its scheme.
Now, you and I and others that have been in smaller businesses, know that when one of your team is
taking some maternity leave that’s quite an impact on the operations, quite a period of adjustment. But then impose this pay clerk burden – that’s a $44 million cost on the economy, that’s $1800 for the workplace that’s involved for no good public policy justification at all. Changing the payroll system, changing your accounting system, having a big fine hanging over your head if you don’t do the right thing according to the Government when you didn’t need to be in that business to begin with. That’s just one example Peter, of the practical changes that we’re instigating and pursuing through the Parliament.
PETER SWITZER:
Okay but what about the green tape though – another one of your promises. Do you regret that? What’s going to be a big red tape reduction on that day?
MINISTER BILLSON:
Well we’ve started by having the Commonwealth approvals requirements embedded in a single process that the States can oversee. One of the great concerns that many people wanting to invest
in our country, particularly on major projects, was that they’d run through the hoops of the State or Territory Government and then they’d risk having to do it all over again to deal with any Federal concerns that may have arisen out of the Environment Protection and Biodiversity Conservation Act.
What we’ve done is we’ve got together with the states and said - well as long as you embed those federal processes in your systems – let’s do it once, let’s do it in a single move, a single part so that there is not a need to replicate that approval process. While that work is being progressed in partnership with the states and territories, Greg Hunt has dealt with the environmental approvals that the Federal Government needs to provide for over $400 billion of projects that we’d like to think a good number of those will get off the ground, but the delay in getting the approval has probably compromised the ability for some of those projects to get moving. We want to be open for business and that’s making sure our systems support enterprising people that want to invest.
PETER SWITZER:
Okay, so you talked to me earlier before the show about beige tape – it’s a new one. What’s beige tape?
MINISTER BILLSON:
It hasn’t really taken off Peter - it’s a cunning plan that I’ve put into people’s heads. We know what red tape is – it’s those go or no approvals that you need and we also know what green tape is about projects, but one of the things that keeps coming up with me are those reporting requirements -
where a government agency requires you to send in reports that cost you money to prepare, take you away from your business and are quite an impost. You send those reports off to Canberra or wherever and you don’t see any real outcome from having put that effort in. You don’t see any change to policy, it’s just the tasking that’s being imposed that has cost, but it’s not clear what the upside is to the economy and for our nation and that’s another area that we have been focusing on as well.
PETER SWITZER:
Okay but let’s get this clear then. Imagine there’s actually some regulation that you guys get rid of on 19 March – it’s still not going to have the Senate agreeing with you, aren’t you?
MINISTER BILLSON:
We need them to be on board but I don’t know anyone Peter, that’s running around saying what the economy needs right now is more red tape. I haven’t heard anybody saying that who’s credible in this area. We need to encourage people to have a go and we need to support them. The Government is working to remove needless obstacles and headwinds that don’t need to be there – like the carbon tax. It’s not going to make people more inclined to invest or employ. It’s a burden and it lands no more heavily than what it does on small business people.
So we are trying to remove those headwinds, those obstacles, those impediments and burdens that serve no good purpose or overreach, go beyond what’s reasonable to gum up the economy. We’ve got to lift that and turn around that appalling performance of government regulation that’s been recognised internationally and here, which is where our nation has dropped the ball and we need to reactivate a disciplined approach to government and not see more regulation as the solution to every problem that might arise.
PETER SWITZER:
Bruce, you’re in a very difficult situation here because you are representing small business and you do take up the challenges on their behalf. What are you going to do if your colleague Joe Hockey decides to go for a horror budget that really rocks the confidence of the economy? What are you going to say in your budget submission?
MINISTER BILLSON:
Well I’m a Minister in Treasury, so that’s one of the changes we’ve made to make sure that our key economic policy horsepower in the Commonwealth has small business concerns front of mind, and inculcated into their thinking every day. So we are working hand in glove together. The Treasurer knows that confidence has improved and there have been some good signs there, but it’s fragile and it needs to be nurtured. That’s why our focus is on getting our house in order, living within our means, fixing the horrendous budget position we’ve inherited, but at the same time, providing encouragement and incentive to grow the economy for more jobs and for people to be optimistic about the future. That’s a balancing act and there’s a lot of work going into getting that right so that we can see the improved prospects that we are working so hard to deliver for our community and our economy, Peter.
PETER SWITZER:
Now, let me be clear. I’m a great supporter of us fixing up the budget for the long term. You know I watch the economy very closely and I just think we are in a situation where we are at a tipping point and could go towards the positive or the negative. If we have between now and the second week of May, all these knuckle head commentators out there saying ‘oh it’s going to be a horror budget’ a lot of people
could hold back on investing and spending and employing. What are you going to do to make sure that that kind of wrong message is not put out there by too many people?
MINISTER BILLSON:
Well we know the budget restoration task isn’t an overnight change. There’s a change in trajectory needed, where we properly value as a Government, tax payers money. We’ve seen this spending spree that we’ve inherited and how it’s on an unsustainable footing, accumulated deficits of $123 billion on
a trajectory of debt of $667 billion dollars. If we rounded it up, it’s close to $700 billion – that’s 7 and 11 zero’s after it which is an enormous amount of debt. So, we’ve got a big job ahead of us but the key is to grow the economy, to nurture opportunity and that’s why our focus will be on expenditures that are supporting productive activity in our economy.
We need to make sure that the adjustment period ahead of us isn’t too hand fisted and too brutal – recognising the encouraging signs that we see out there, bringing forward infrastructure spending. We need to get those arteries of commerce and enterprise going and we are working with the states to do that as
well.
We are also implementing our election policies Peter which are very important and include red tape reduction. By getting rid of the carbon tax, we are putting money back into households, taking cost pressures out of business and that’s a step in the right direction. Other measures include the reduction in the company tax, abolishing the mining tax so people want to invest in our country as a preferred location than elsewhere. We are really working to get our house in order and I think people are with us on that, but we need to explain what we are doing and why, and showing how the longer term interest is being [inaudible] by a prudent, fiscally responsible government in Canberra.
PETER SWITZER:
Now today I interviewed Gerry Harvey and as you’d know, Gerry’s got some very interesting and insightful observations of the Australian economy. But one question that I asked him was ‘with the challenges all retail businesses have on the revenue side because of the internet, so much competition
from parties overseas and within the country - what does it takes to get those costs down?’
A big issue that small business right around the country complains about is penalty rates. When Gerry was on another Sky Business program he talked about how he had to pay $48 per hour for a dishwasher on Sunday night at his resort at Byron Bay. What are we doing, or what are you going to try and do, to get the union movement to talk sensibly around unreasonable penalty rates which ultimately is not going to be good for jobs?
MINISTER BILLSON:
Well you wonder what else is needed to get that bell ringing in some people’s heads that a job relies upon a viable business and that conversation has been happening. In the current law, there is machinery there, where industry organisations and employers can say to the Commission who adjudicates these things that penalty rates are having x, y and z impact on their business. They can make the case that we believe penalty rates have their place, but there’s a process through which people can argue at what rate they are calibrated and that’s something that the Commission has within its power to deal with now.
What I’ve been saying to people who raise these practical concerns like Gerry’s, that the rate might see someone miss out on a shift or fewer people on the floor of a restaurant or something like that – can make that case to the Commission, because the machinery is there to deal with it. More broadly we’ve indicated that there will be a Productivity Commission review of the whole workplace regime to see whether its meeting our national objectives of good jobs, good pay for the strong and resilient economy where there are opportunities and employment prospects available, not just to those who have a job now, but those who are looking for it.
And in the small business space, 412,000 jobs were lost under the previous Government in small business. Now they might not have been front of mind because they might not have been part of the union picket line or a big media interest, but they have been sprinkled around our continent. If we go to get that employment growth going again, we need to make sure recruitment is attractive for businesses big and small and I think that’s the conversation we seem to be in the middle of as a nation – where the tools are available with the current Commission, in the current law, to deal with them if they see those examples like Gerry’s talking about.
PETER SWITZER:
Thanks for joining us on the program. Good luck on 19 March – we’ll all be rooting for you mate.