THURSDAY, 29 OCTOBER 2015
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Good afternoon everyone
Every business begins with a personal story, so I thought I would start on a personal note today.
My Dad started his working life doing a fitter-and-turner apprenticeship in a Newcastle-upon-Tyne shipyard.
Then he was a seafarer, for 20 years, and came ashore when my twin brother and I were born.
He was always union.
But toward the end of his career he rose to become a manager on the Melbourne Dockyards –where the Polly Woodside resides now.
I remember him coming home with the spreadsheets and the slide rule – trying to crunch the numbers on staff, hiring, payroll tax.
Grumbling about red tape and bureaucracy.
It’s ironic that the problems my Dad confronted in the 1970s…are still at the top of the list for small business, in 2015.
Above all though, my Dad believed in helping run a business that would give people work.
He was committed to find opportunities for people, particularly those down on their luck or in need of a second chance.
He was determined to be a good employer.
And when I was a union rep, I learned, over two decades that one of the great agents for improving welfare of employees is the good employer.
Perhaps that is something Labor doesn’t say enough.
The good employer who invests in the long term security of the company, invests in the long term welfare of employees.
An employer who pays reasonable wages, provides a safe working environment, continuity of work and fair conditions was, is and always will be an important catalyst for lifting living standards.
And if a union weakened good employers they would ultimately weaken the job security of their members.
This was not a philosophy of the weakest trade union leaders but the strongest.
I worked with employers, if I had not it would be a measure of weakness.
When we have co-operation in Australia’s workplaces – that’s a mark of strength.
No-one can be Prime Minister without understanding and appreciating the role of business in the process of producing wealth.
Not just for the business, but for all Australians.
So I will always value our relationship, the opportunities forums like VECCI provide to engage in an honest exchange of ideas.
Australia’s best moments have come when people work together to face the big debates, with our eyes open and all the facts on the table.
Because creating the jobs and prosperity of the future demands that we be honest about the economy of the present.
Not talking it down, but not pretending everything is as we wish it to be.
It’s true – our fundamentals are sound and our foundations are strong.
The test of this moment, is whether we can put our hard-earned advantages to use.
Because for the past two years, our economy has been more mediocre than the sum of the parts should indicate.
- Unemployment is too high.
- Growth is too slow.
- Insecurity at work is too common.
- Wages are stagnant
Inequality –something we pride ourselves as being against – is at a 75 year high.
It is tougher than ever before for young people to find a job or put together a deposit for a house.
And none of this is helped by a Federal Government which gives the green light to the banks to arbitrarily raise their interest rates.
Australia’s banks are doing well and I don’t for a second think this is a bad thing.
But what is galling to families with a mortgage and businesses with loans is when the banks put up their rates without offering a decent justification –
It is just not good enough to have a Prime Minister and Treasurer of Australia swing in behind the banks to explain it away.
Australian families and small businesses need a Government that will stick up for them, not just for the banks.
Good governments have a responsibility to explain where growth will come from next year, and the year after that – and to plan for it.
Too often in politics, we dumb-down the debate.
People hear Labor talk about unemployment, and then the government say hundreds of thousands of jobs have been created in the past two years…
They wonder why 800,000 of their fellow Australians are in the unemployment queue.
And more than a million Australians would like more work, but can’t find it.
Older Australians, especially 55 plus, are being discouraged from finding work.
Good governments have a responsibility to plan for the creation of good jobs – and sustaining good jobs.
Jobs with a sense of security and the opportunity for people to further themselves.
Everyone acknowledges our economy is in transition.
We all know the mining investment boom is tapering.
We know Asia’s middle class is growing
And we understand that digital disruption is occurring and a boom in services is underway.
Identifying these shifts is the easy part.
But as change gathers pace, more and more Australians are asking where they fit in.
Wondering how they can find a place in our changing, modernising global economy.
I had the opportunity on Saturday evening to talk to Geoff, from the Williamstown dockyard – been there thirty years.
He’s sixty. He’s worked hard as a storeman, he’s a good worker. But he’s out of work.
We’re not very good in this country at helping Australians who are sixty, re-train and re-skill.
I was speaking to people from Australian Vinyls at Altona. That business is closing. These two chaps were multi-skilled operators, from a lean structure. They’re good decision-makers. But they don’t know what they’re going to do next.
We need to be better at helping Australians manage change in the economy, giving them a sense of where they fit in.
The people I just referred to are parents – and grandparents – and they’re wondering about the jobs their kids will do as well.
It’s not the job of government to run businesses. But it is up to government to manage the economic transition, to invest in productive capacity and to foster confidence.
It’s why Labor worked hard to negotiate stronger safeguards to ensure we can get the full benefit of the China Australia Free Trade Agreement.
We wanted to make sure our export businesses got greater market access – without undermining Australian jobs, pay and conditions.
Because a major part of a successful free trade agreement is ensuring Australians believe in the benefits of trade liberalisation.
Making the ChAFTA work for Australia also depends on ensuring our small and medium export businesses can access Chinese markets.
For government, this means better co-ordinating of promotion and marketing.
And AusTrade in particular working with representative organisations and chambers such as yours to make this work.
It is the job of government to ensure the Australian people are equipped to share in the opportunities of change – and to be productive, adaptive agents for prosperity.
This is why, under my leadership, some of the key economic levers Labor sees for growth are:
- Education – in the early years, schools, TAFE and universities.
- Technology and science, central to growing our economy.
- Productive infrastructure
- And the equal treatment of women, not just as a matter of justice but delivering an economic dividend.
Fiscal policy is important, monetary policy is important.
But these other features, these measures are essential too.
Just on the equal treatment of women, the biggest change in our national wealth in the past generation has been driven by the increased participation of women in work.
We haven’t got there yet on the equal treatment of women, but if we do, we will be the richest nation in the world.
I want Australians to be drivers, not passengers on the journey of change.
We must boost our productivity: in healthcare, in our education sector, in superannuation funds, in knowledge-based capital, in transport and infrastructure.
This means backing-in your businesses – as engines of productivity and job-creation.
And learning from your businesses.
Because you didn’t get where you are by standing still in a time of rapid change.
You never took the view that the world was too hard to compete in.
And neither should government, nor should Australia.
We should be ambitious for our country to compete and win in the world, to succeed on our terms.
And we should embrace new thinking, new ideas and new solutions.
SMALL BUSINESS INCORPORATION
This must include taking a fresh look at small business formation.
As you know, more and more small businesses are moving towards becoming companies, to gain the legal protection of limited liability.
Incorporation also helps promote asset protection, retaining profits for working capital, access to capital gains tax discounts, succession planning and income distribution.
But in every conversation I have with Australian small businesses and medium enterprises, I’m quickly reminded that our current system requires a series of very complex and unwieldy structures to make this happen.
Setting these structures up takes time and money from business owners who are already time-poor and often challenged by cash-flow.
And maintaining these structures is even more expensive and even more time-consuming.
Only Italy, in the OECD, has more of its citizens go to tax agents to help negotiate the tax system. We have a delightfully complicated system.
Now, instead of accepting this as an inevitable shortcoming of our system, instead of viewing this as an intractable problem, the way of the world, we should focus on finding a solution.
A solution that helps more small businesses access the benefits of incorporation - without imposing the ongoing expense and complexity of new red tape
I’ve been speaking with small business people about improving Australia’s current complicated and expensive arrangements, with another stream of incorporation, one that provides a single, simplified structure, tailored for small business.
A structure that delivers maximum advantage with minimum hassle.
When the United States wrestled with a similar question, they chose to change their corporate structure to create a specific class of corporations for small business.
This sort of differentiated approach is driven by the recognition that compliance measures should be tailored to match the size of your business.
I think it’s an instructive example, something we can learn from and apply.
And the more Australian small businesses I talk to about this solution, the more convinced I become.
I’m not saying this change is easy – or straightforward.
But I have asked my new Shadow Minister for Small Business, Michelle Rowland, to kick-start a more formal round of consultations with small business people like you, with representative organisations like yours, and with the legal profession and accounting bodies like CPA Australia.
I think we can turn this idea with merit, into a policy that delivers benefit.
And just as importantly, from an initiative like this we can build a new, co-ordinated focus on small business policy.
We need to bring new thinking to infrastructure too.
Right now, congestion in our cities and the disconnect between our regions is bad news for every Australian business.
It slows the movement of your goods and the provision of your services to customers, adding to your cost base.
This all hurts productivity at work – and our quality of life outside work.
And the traditional Commonwealth grant funding approach cannot guarantee the scale of the work required to solve this problem.
The old way and the old budgetary process will not do.
We can’t expect State Governments to simply do more, with less.
And yet by 2025, Australia’s superannuation savings will be $4 trillion – some of this money should be put to work on nation-building.
This is why Labor has announced our plans to empower Infrastructure Australia, an independent body, free from short-termism.
Moving beyond the ‘gotcha’ argument about debt, understanding the difference between borrowing for recurrent expenditure and productivity-generating infrastructure.
This is why we’ve announced a $10 billion financing facility to help incentivise private sector investment.
Clearing away the stumbling blocks which stand in the way of good infrastructure projects being financed and taken to market.
Including one of the biggest hurdles: short-term, petty political bickering.
Making the gold standard of infrastructure projects whether they’ve been to Infrastructure Australia, and whether they stack up.
For Labor, this is partly about recognising the limitations on government.
And adopting a commercially-rigorous, business-like approach to decision-making.
It’s the same as sending the right market signals on the move to renewable energy.
Not mandating a solar panel on every roof, but recognising that 15,000 Australian small businesses have already installed the technology, embracing the opportunity to take control of their power bills.
And more and more businesses will take up this chance as the cost of battery and storage technology continues to drop.
This is the Modern Labor view: government as an economic enabler, a creator and a supporter of markets.
Where once we sought to row, now we want to help steer.
It’s not about ideology.
For me, the big game in town is the middle.
Not the extremes of left or right.
Growing our economy, by growing our middle class.
Creating the comfort and confidence for small business to hire more people and create more jobs.
Helping more Australians become more self-sufficient, through the opportunity of work.
And of course, creating the wealth which allows us to support a decent safety net for those genuinely less well-off.
That’s what drives me.
Getting the best out of people.
For me it’s not what school you go to, or postcode you live in.
It’s about how we ensure the great middle of Australia can back themselves in, pay their taxes, send their kids to school, pay their mortgage.
This is where businesses come in.
Well-run businesses, good employers, are some of the heroes of economic progress in this country.
And you are central to our prosperity in the future.
Thanks very much.
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