Small businesses gain a new voice

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SMEs have recently gained a greater voice in the Federal Government, with the recent announcement of a Small Business Minister and Small Business Commissioner to benefit the 2.7 million small businesses in Australia.

On 2 March, the former Minister for Human Services and Minister Assisting for School Education, Brendan O'Connor, was announced as the new Federal Minister for Small Business.

Given that the Australian economy is predominantly made up of small businesses, Mr O'Connor's ascension to the Cabinet looks likely to increase their representation at the Federal level.

Two weeks later, small businesses were given another voice, this time by creating the role of Australia's first Small Business Commissioner. But what do these changes really mean for SMEs?

Small Business Commissioner

The Federal commissioner is expected to be chosen in the second half of 2012 with his/her office becoming operational on 1 January 2013. The office will act as a 'one-stop shop' for all enquiries, according to Prime Minister Julia Gillard, although specific powers are yet to be defined. Both the Commissioner and Minister will work to reduce red tape and connect SMEs with a range of relevant government initiatives and policies.

This role will provide government advice to small businesses, following the recent appointments of small business commissioners in New South Wales, Queensland, South Australia and Western Australia in 2011. Victoria already has a similar commissioner in place since 2003.

The state-based commissioners have varying degrees of responsibility, ranging from dispute resolution and review of state laws to intervention in consumer law.

Executive Director of the Council of Small Businesses of Australia (COSBOA), Peter Strong, has welcomed these changes but hopes to see a more involved approach in advocating for small businesses.

"The commissioner should make sure government tenders are small business friendly and should resolve contract disputes between small business people and government agencies. The commissioner should help make education for small business more proactive and support services focused on our needs, not on maintaining jobs for people in education and service sectors."

He also adds that this person should review new policy and give advice on how to communicate with people within their own business.

Small Business Minister

Both Labor and Liberal parties are looking for support from the small business sector, meaning that for the first time, the decision makers in Australia are looking to provide as much assistance as they can to small businesses.

"I will be advocating their interests around the cabinet table and I only have this simple test: if they can convince me of a particular reform, then I will seek to convince others," newly-appointed Mr O'Connor told The Australian Financial Review.

Areas he is already looking into include:

  • Removing red tape and unnecessary regulations on small businesses;
  • Making sure differences in laws between small and large businesses do not hamper the ability of small businesses to expand;
  • Examining fairness between small and big companies, in particular during contract negotiations between shopping centre owners and tenants.
    Owners usually have the upper hand in contract renewals, with tenants forced to accept increased rents or to move out. Mr O'Connor has said that he willing to help small-business owners if they come forward with evidence;
  • Assisting small businesses negatively impacted by the high Australian dollar;
  • Examining the possibility of more tax cuts for small businesses in the May budget. Small businesses will receive a one percent cut on the corporate tax rate from 1 July onwards; and
  • Broadening the definition of small business and introducing a new corporate entity for small businesses. If successful, more enterprises will have access to tax cuts, as well as exemptions from unfair dismissal laws.

With the new Federal Minister having only been in office for less than a month, small businesses will be keeping a keen eye on what changes will actually occur.

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