To my Parliamentary colleagues, ladies and gentlemen –
I am very pleased to be here today, talking about the ever-expanding world of doing business on the internet.
Can I say I find it an exciting and engaging area of business. It crosses borders; it increases our knowledge of products and services worldwide; and indeed, it even causes us to question ‘where is (what is) the ‘market place’?’ - a key concept in economic and policy thinking.
I also believe the world of business on the internet is as much a world of challenges as opportunities. This is one of the themes I would like to speak about today.
Before I do so, Minister Bailey has asked me to thank you for coming to Canberra today and to pass on her apologies for being unable to meet with you today.
And I would like to thank Simon (Simon Smith, Managing Director, eBay Australia & New Zealand) for increasing my awareness and that of my colleagues, about the growing Home-Based Business market and the role that eBay plays in promoting business development at this level.
Small Business & eBay
From small beginnings in 1995, eBay quickly developed into the world’s premier third party auction house – with listings from every country in the world and an increasing number of country specific sites, including eBay Australia.
eBay and its founders influenced two key factors in doing business. They helped to:
- foster a type of enterprise that creates new and innovative business opportunities; and
- solve one of the biggest problems for commerce on the internet – gaining the trust of customers to do business in a new way…and make a profit in the process.
Ten years ago, the internet was foreign territory for most people.
The thought of trusting a faceless third party with your bank account details was almost unthinkable.
But businesses recognised that having secure internet payment systems was essential to winning consumer confidence – and they spent much money implementing these systems. eBay has PayPal, for example.
But even still, many consumers think of doing business on the net with some fear and it is still a gradual process for many of them. The other problem I am aware of is that consumers wonder “How can I trust the vendor to send the goods I am paying for?”
Again, eBay solved that problem by using the track record of vendors to advertise their reliability. Confident consumers – those who see a business as reputable and trustworthy - are now more willing to participate online.
Having reached that bench mark, with honesty and reliability being the standard, eBay has seen many new buyers and sellers enter into its world.
And this in many ways demonstrates the key message – that with confident consumers, businesses (whether small or large) can reach their maximum potential.
In a world of confident consumers, buyers have the skills and information to choose the goods and services that best meet their needs.
Through the choices they make, they help encourage businesses to compete and innovate. And this leads to improved quality and variety in the marketplace – not to mention better prices.
As a result of eBay working hard to foster consumer confidence, there are now over 7,000 small businesses trading on eBay.
20 per cent of these businesses are employing staff, with more than 35 per cent of them employing five or more employees. In addition, nearly half of eBay businesses with employees plan to hire more staff in the next two years.
This is clearly an expanding market which is developing the growth of the home-based business sector, and in turn, the Australian economy.
This Government is a strong supporter of small business, including home-based businesses, and we continue to strive to encourage innovation and business enterprise in this area.
Role of the Australian Government
The Australian Government recognises that global economies that foster and commercialise innovation will continue to generate jobs and higher living standards into the future.
The Government has provided the conditions for business confidence and growth on its own shores.
We have provided Australian business (and their customers) with a decade of economic certainty. Strong micro economic reforms have removed barriers to competition in the supply of goods and services to Australians.
One of the key aims of this government is, simply, to make it easier for business to get on with business.
That is why the 2005-06 Budget included targeted initiatives to improve the financial operating environment for small business.
Part of my portfolio responsibilities includes consumer affairs at the Commonwealth level. I note a lot of small businesses are consumers. In my own portfolio, I remain committed to sensible, well-balanced regulation.
This year, I released a set of refinements to financial services regulation, to streamline laws and make it easier for business to comply with, and consumers to understand.
I have announced that insolvency reforms are to be considered for the first time since 1992.
Obviously, I hope these won’t apply to anyone here!
I am also keen to look at ways to reduce red tape for business within my portfolio responsibilities, following the Prime Minister and Treasurer’s announcement of a taskforce on this issue.
In addition, I have an expert group - the Commonwealth Consumer Affairs Advisory Council, which advises me on a range of consumer-related matters.
When I came to this role, there was another body - the E-Commerce Expert Group, that advised me on e-commerce issues.
It was my view at the time that e-commerce was now part of a consumer's every day experience. As a result, I merged the two groups, which has proved to be very beneficial.
Small Business in Australia
I would now like to comment on the very significant role small business plays in the Australian economy - small business is Australia’s biggest business.
- 96% of all Australian business is small business;
- Small business employs 3.3 million Australians; and
- Approximately 30% of Australia’s economic production is generated by the 1.2 million small businesses in this country.
The Australian Government is keen to see small businesses look to it as a provider of skills development and support, that will help them start and expand their business and their business expertise.
Most importantly however, government funding for small business should help build and encourage entrepreneurial skills.
That is why the Government will be revamping the Small Business Assistance Programme. The new programme will be called “Building Entrepreneurship in Small Business.”
Proposed projects for which funding is sought through this refocused initiative must be consistent with the overall objective and outcomes of the revamped programme, including:
- fostering and encouraging entrepreneurship; and
- the sustainability of small businesses and skills development.
There are many here that will benefit from this initiative – including those working from home.
Home-Based Business overview
I understand that around two thirds of the 1.2 million small businesses in Australia are based in the home.
These home-based businesses make a significant contribution to our national economy – and their activities are very diverse.
Social benefit from Home-Based Business
I don’t need to tell this audience that there are spin-offs to home-based business that benefit the community too, in the cities and in regional and rural areas.
When people work more in the city suburbs, it takes some of the pressure away from our CBDs, such as the burden on transport infrastructure.
People who work from home during the day bring life to ‘sleeping suburbs’ and provide ‘eyes and ears’ security for their neighbourhoods.
Home-based businesses can be a boost for other local businesses when they purchase their products and services from local suppliers.
This is particularly significant in regional and rural Australia.
Home-based businesses can create significant wealth and employment in local communities. They can also be more productive labour market participants – balancing work and life in a single physical environment.
Growth in Home-Based Business
Developments in communication and information technology, like eBay, have been a great boost for home-based business.
The information revolution has created huge opportunities and home-based business owners and operators are making the most of them.
Research shows us that the great majority of Australia’s home-based businesses use computers and 88% have access to the Internet.
E-commerce among home-based businesses is growing.
Corporate restructuring and other changes in the workforce have also encouraged growth in home based business.
The attraction of lower overheads and start-up costs has encouraged people to use their home as a base for conducting business - but the sector needs support.
Government support for Home-Based Business
The Government recognises that home based business operators are sometimes isolated, and that they need to network and have access to information.
Going solo is one thing, but having good access to networks, information and mentoring is another - and this is critical for business survival and success.
This is why the Australian Government is currently funding the delivery of over 70 Home Based Business seminars throughout regional Australia to help improve such opportunities.
At these seminars, small businesses get access to a range of experts on a range of issues – taxation, business planning, intellectual property to name a few.
There has been a huge response to these seminars, which will look to conclude by Christmas.
Business.gov.au
It would be remiss of me not to mention the website established by the Government – business.gov.au.
This website is the one-stop-shop for small business owners and/or operators looking for information on how to start and/or expand a business.
Business.gov.au is an outstanding Australian Government initiative that reduces ‘red tape’ and makes it easier for business to deal with government.
Australia is now a world leader in online business-to-government interaction….and we are doing more.
We have just introduced a new application to business.gov.au called Transaction Manager which enables business to search, save, edit and send forms as required by government bodies.
Through an off-line version called Forms Manager, generic information (name, address, contact details, etc) can be saved on the user’s PC and entered on other forms as required.
We will be investing a further $36.4 million over 4 years in business.gov.au and we look forward to promoting future enhancements to make it easer for small business to do business.
Concluding Remarks
Advancements in information technology have changed the way we live, communicate, shop, are entertained and discover the world around us.
I.T, as we knew it even 10 years ago, has undergone a quantum change and I can only guess that over the next 10 years, the changes will be even more rapid….
The thought I would like to leave with you today is that the Australian Government is creating a small business-friendly environment that fosters Australia’s innovative business spirit.
We are committed to supporting small business by providing readily accessible information and services to them.
At the same time, the Government sees the protection of consumers as fundamental to the continued growth, development and expansion of e-business.
I’d like to wish all of you here the very best in your enterprise….
Thank you.