Hello, everyone. It’s great to be here for the second day of the Retail Leaders Forum, and to have the chance to talk to some of the industry’s leading lights.
And I want to start by saying a strong retail industry matters. It matters to you. It matters to me. It matters to customers and employees.
And it matters to the Government.
Let’s face it, retail is a big slice of Australia’s economic pie.
Right now, we’ve got more than 130,000 retail businesses trading across Australia. And those businesses employ about 1.2 million people.
So the success of this industry is critical. And when I say that, I don’t just mean for these businesses — large and small — and their workers.
Everyone has a stake in retail’s success. We all have ambitions — for ourselves; for our families. We all want more jobs. We all want security, opportunity, higher living standards.
And a successful, empowered retail sector will help get us there — and it’ll do that by growing the economy and creating jobs.
A changing industry
So that’s the goal. But there’s work to do.
I know, as do you all, that retail’s done it tough over the last several years. There’s no point in sugar-coating it.
Technology has shrunk the world. Retail businesses — as with businesses in general — are experiencing fiercer global competition than ever before. And online retailing is only going in one direction: up.
Look at the recent NAB report. It tells us in the 12 months to December 2016, the online retail market grew by more than 10 per cent.
It’s now a $22 billion industry in its own right — which is about 7 per cent of all retail spending.
So to say this is a challenging time is an understatement.
Global competition and digital disruption mean the old ways no longer cut it. To be successful, a retailer has to be nimble. They’ve got to be forward-thinking — an innovator — as well as globally minded.
You can throw in social media guru, too.
It’s enough to exhaust even the most battle-hardened. But let me say that, during my time as Small Business Minister, I’ve been amazed by the energy that exists across retail.
There’s a spark — a ‘can-do’ attitude. People in this industry have got imagination, and the confidence to take risks. They believe they’ll succeed.
And so do I.
Red tape and regulation
Now, with all of that said, it’s not my job to tell you how to run your business.
But the Government does have a job to do. And that job is to foster enterprise — to create an economic environment where the retail industry can meet challenges, seize opportunities, and thrive.
In other words, it’s about empowering you and your business.
I ran my own small business for eight years, so I know the challenges and the opportunitites. I know what it’s like to have your ‘day’ end, only to bury your head in the books and paperwork that night.
And I know there’s a lot of that red tape which can stand in the way of letting you do what you do best, which is why I want to reduce it.
So how is the Government doing that?
As I say, top of my agenda is making paperwork simpler.
You know, one of the worst things I can hear from any business owner or worker is “it’s more than my job’s worth”.
And I hear it too often. Regulatory burdens are costing Australia’s economy about $70 billion each year. And business has a right to be critical.
Of course, regulation does serve a purpose — such as protecting consumers or maintaining fair competition.
If done properly, it makes things easier and better.
But in far too many cases, regulation is a knee-jerk reaction. We wrap businesses in red tape as if it’s a safety blanket. But it’s not.
All it does it strangle the enterprising spirit we should be encouraging.
It costs investment.
It costs profit.
It costs jobs.
So I am working to change that.
We started by doing a stocktake of regulation and creating a framework for calculating the costs of red tape.
We also rolled out a Regulator Performance Framework to give regulators incentives to minimise the burden they impose.
What’s more, we made sure we listened to business owners, and have rolled out bread-and-butter changes that bring real benefits.
This includes the National Business Simplification Initiative, which is an agreement between the federal, state and territory governments to help reduce the complexity of regulation for business, and help them to interact with government more easily.
And when you look at the numbers, it’s clear this approach has been a roaring success.
Three years ago, we said we’d reduce the costs of complying with red tape by $1 billion every year.
And so far we’re well ahead of target — we’ve already removed more than $5.8 billion worth of red tape on an ongoing, annual basis.
There’s more to be done, of course. But it’s a start.
The Government is determined to make similar inroads when it comes to tax.
You all know that company tax rates have a direct bearing on business investment decisions. And by lowering the rate, we can boost investment opportunities.
It will also level the playing field for Australian-based companies — especially those in retail — which are competing in a global market.
That’s important. Back in 2001, Australia had the ninth-lowest company tax rate among advanced economies.
But since then, we’ve dropped off. Today, only five of the 35 OECD countries have a rate higher than Australia’s.
So that’s why I want to cut the tax rate for small business and see you succeed.
We have a 10-year plan to reduce company tax. It starts with reductions for small and medium-sized companies, and eventually leads to a rate of 25 per cent for all companies.
It’s a move that will bring us closer to other countries, and modelling suggests it will see a permanent increase in business investment of up to 2.9 per cent over the long term.
I know that tax cut won’t be squandered or pocketed. It won’t be used for anything other than re-investing in your business, giving another Australian a job and growing your operations so your small business can be successful in the long-term.
Because you are the ones who create jobs.
You are the ones who create opportunities.
You are the ones who provide Australians with the goods and services they need.
And I want to back you with simpler paperwork and lower taxes.
And that’s just the start of my plan.
Now, I should also quickly mention that when it comes to tax, the Government is also addressing issues around low-value imported goods.
Right now, overseas retailers don’t have to apply GST to goods that are $1,000 or less. This gives them a competitive advantage over domestic retailers, and the Government doesn’t think this is fair.
That’s why in February we introduced legislation that will require overseas vendors with an Australian GST turnover of $75,000 or more to register for, collect and remit GST on the low-value goods they’re supplying to Australian consumers.
It’s another important move that will, again, level the playing field.
Before I finish, I also wanted to flag the Government’s drive to create global trade opportunities for businesses.
Now, we all know that international trade has copped some flak — and been blamed for far more than it’s actually responsible. It’s even led to calls to look at protectionist options in some countries.
But they are calls this Government has — and will continue to — resist.
We know that open markets attract new investment, boost competition and deliver lower imported input and product prices for businesses.
And this is especially critical for retail businesses — ones that import products in large volumes, and benefit significantly from overseas investment.
So our job as a Government is to keep the doors open — in both directions — and open more doors where we can.
It’s why we’ve pushed through free-trade agreements with China, Japan and South Korea. And it’s why we’re committed to securing further arrangements — whether that’s with Indonesia, India or the European Union, to name a few.
We want to make the business environment more open and more receptive to Australian efforts overseas. Because we know that more sales overseas mean more success, more jobs, and more growth right here at home.
And that is why, to go back to what I said at the beginning, we all have a stake in retail’s success.
It’s an industry that, undoubtedly, has done it tough. There are challenges ahead.
But every industry, big or small, is eventually faced with tough questions. And we should remember that success isn’t achieved by standing still.
Now, what you do is down to you — to your skills; your foresight; your hard work. And these forums are a good opportunity to explore the next steps.
But the Government can help. And we can do that by pursuing an agenda that empowers you, presents new opportunities, and helps the retail industry to thrive.
We’re committed to that. We’re making progress — good progress. And you can rest assured that we’ll keep at it.