It’s was a protracted election campaign, but we finally have certainty around our federal government. And after months of promises for “jobs and growth”, it’s time to get on with delivering on that exact promise.
I may be biased, but there’s no better way for the federal government to do that than by supporting the more than 2.1 million incorporated small businesses and sole traders that are the backbone of our economy.
With that in mind, there’s a few key areas that the government should focus on to ensure that “jobs and growth” doesn’t become another three-word political slogan with no substance.
Stability and clarity
While the spotlight in recent years on small business has been welcome, it’s time to enjoy a period of stability. Too many rules have changed for them over the years, and that constant change can be very disarming for a small business owner.
They have too many micro day-to-day concerns to deal with without having to be anxious about the macro issues playing out in Canberra. Some stability and clarity on the path forward for them — and not just until the next budget — are vital in the years to come. That certainty will encourage small business owners to increase investment in growth areas of their operations.
Get clear on tax
There is too much confusion around tax and other financial incentives for small business investment. There are too many thresholds, and they’re all over the place. It is our view that a business doing $3 million a year is still a small business. Politicians can not lump in genuine small businesses with multi-nationals, for the sake of political points.
Tax cuts alone aren’t enough. The promised 2.5 per cent tax cut would give the average small business (counting both profitable and unprofitable businesses) approximately $490 back in their pockets at tax time. And modelling from the Council of Small Business of Australia similarly found that of the 870,000 businesses eligible for a tax cut, just 40,000 would actually be able to use the resulting profits to grow their business.
Instead, being clearer about the taxes small businesses should pay, and how to meet government obligations more efficiently, will go a long way to helping boost small business in Australia.
Invest in technology
Investment in smart technology creates huge benefits for small businesses around Australia. This is important for government itself, the connections it has with small business through agencies like the Australian Taxation Office, and encouraging investment for small businesses themselves. This will not only help the small businesses themselves, but will have huge positive knock-on effects across the economy.
Explain jobs and growth
The key theme of the election for the Coalition, there’s no doubt small businesses want to grow, and create jobs in doing so. But we need a more nuanced discussion around what this actually means, how they can go about it, and how government will help. Will payroll tax be simplified? Will there be new incentives for job creation? The government needs to have frank, open discussions with small businesses about the nitty gritty of this.
Invest in education
Digital education and skills will be vital to preparing Australia for what comes after the mining boom, and it’s something that everyone — from government to businesses to individuals — needs to contribute to.
These skills will be vital in all facets of our economy, from multinationals transitioning to digital services, to high-growth startups that could become our future global successes. We’ve already proven we’re an innovative nation with successes like Atlassian, Bigcommerce and Campaign Monitor, but ensuring we have the future skills pool to continue this innovation will be the difference between a booming nation and a floundering one.
With certainty around the election, we now want certainty around small business. Let’s get on with the job and ensure we’ve got a healthy and growing Australia for years to come.
Trent Innes is the managing director of Xero Australia.
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