An open letter to Bill Shorten and Scott Morrison on behalf of the Australian small business community


Greg Charlwood

Dear Bill and ScoMo,

With only a bit over a week to go until the Federal Election, I figured it was an opportune time to write to you both to highlight the issues that are keeping Australia’s small business owners up at night.

Whichever of you is victorious at the May election will assume the power to directly influence the operating environment of Australia’s small businesses through your policies. I urge you to consider the issues raised in this letter when planning your fiscal measures.

Australian small businesses employ around half of the nation’s workforce and contribute approximately $380 billion annually to GDP. Therefore, the need for the government to work with this sector to keep it healthy and efficient and support growth is critically important.

However, less than a third (31%) of Australian small businesses are satisfied with the level of support they’re receiving from the Federal Government, according to MYOB’s January 2019 Business Monitor report.

With this in mind, I have a prepared a Federal Election wishlist, on behalf of the small business community, for whichever of your parties wins in May.

Power prices

Electricity is one of the biggest expenses for small business. Between 2008 and 2017, power prices in Australia rose 117%. That is excessive in anyone’s book.

According to Energy Consumers Australia, there are around one million Australian businesses classified as small energy customers. High energy prices directly impact the bottom line, particularly for energy intensive businesses, making it more difficult for them to hire more staff and invest in growth. Excessively high power prices are hurting small businesses. We are crying out for strong leadership on this issue.

Company tax cuts

We support the Morrison government’s plan to fast track the $30 billion in tax cuts for small business and Labor’s commitment to keep the cuts in place, should it win government.

The cut in the tax rate to 25% by by 2021/22 for businesses with turnover under $50 million will be a huge benefit. For example, a business with annual profit of $300,000 can expect to save $7,500 in tax from 2021/22.

This is a significant amount for many small businesses. It might just mean they can afford to hire that casual worker or increase the marketing budget to boost growth, for example.

Avoiding a credit crunch

As the banks ramp up the fear campaign around a credit crunch in the wake of the Royal Commission final report, it has become clear that whichever party wins the election will have to tread carefully in this area. Small businesses are already finding it tougher to secure lines of credit.

Mr Shorten, your party has vowed to increase the banks’ victims compensation scheme, reduce farm foreclosures and introduce a levy on banks to fund support packages for domestic violence victims.

We support these measures in principle but urge both parties to work in partnership with the banks to ensure that a credit crunch does not emerge as an unintended consequence.

Penalty rates

Penalty rates serve to level the playing field between big business and small business. Big business and the unions decided, through their enterprise bargaining agreements, that they would forgo penalty rates for higher base rates. For small businesses, which aren’t able to negotiate EBAs, penalty rates have a direct impact on the bottom line.

If the new government really wants consumer spending to increase, which is one of the major drivers of the economy, it needs to make the trading environment as favourable as possible for small business. Longer opening hours and Sunday trading don’t pay for themselves.

Carbon emissions cap

Labor has said it will impose tougher fuel emissions standards on heavy industry as part of its aggressive plan to revive the National Energy Guarantee (NEG) and reduce emissions by 45% by 2030.

We are all for protecting the environment, but there has been a distinct lack of detail on how this policy would be implemented in industries such as transport. The CEO of the Australian Industry Group, Innes Willox, believes that the issue “may be better addressed with measures like vehicle efficiency standards”. We encourage the new government to consult closely with industry before introducing legislation in this area.

I wish you both the best of luck in the forthcoming election.


Greg Charlwood
Managing Director
Australian Invoice Finance

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