Small business sector needs more policy less politics

First published in The Australian, 2 July 2013

The revolving door of ministers has not helped a critical part of our economy.

FOR the sake of the nation, let’s hope that with his announcement of a new ministerial line-up, Prime Minister Kevin Rudd is also announcing that his government is back in the business of policy.

After three years of drift and policy inertia, where clever politics and personal interest has trumped both good ideas and reform, gelling back to the hard slog of governing is well overdue.

It is noteworthy for the business community that Gary Gray has retained his portfolio of resources and energy, tourism and small business. While the mining sector gets all the headlines and much of the minister’s attention, it’s the small business sector that occupies a much larger share of the economy and employs significantly more people.

My recollection is that Labor came to power back in 2007 professing to be the party of small business. That minister Gray has stuck with small business is a rare example of continuity which has seen six ministers in 17 months responsible for what is commonly known as the engine room of the economy.

This revolving door approach to this critical portfolio is hardly conducive to good policy development and implementation.

The risks and disruptions caused by the turnover in ministers, which I note with concern is also occurring in the tertiary education portfolio, would be mitigated if the government had a long-term vision for the sector and a policy framework to achieve that vision.

In such circumstances, it shouldn’t matter as much who the minister is, as their job becomes more focused on policy implementation. The destructive leadership power plays of the last three years have not allowed this to occur.

What we therefore sorely need is a long-term vision for the small business sector and a coherent policy framework to achieve that vision.
Such a vision and policy framework should support the development of a strong, vibrant and innovative small business sector which is critical to enhancing Australia’s international competitiveness.

When ministers measure their time in the small business portfolio in days rather than months or years, this will be a challenge.

I also feel for the public servants who have to prepare briefs for new ministers on a regular basis. It must feel like groundhog day for them. They too must also be frustrated that policy development is stifled and disrupted.
However, while we are concerned about how this unfortunate state of affairs is affecting Australia’s competitiveness, we must avoid overreacting. Chicken Little Jam not: the sky is not falling in for the small business sector because of this constant churn in ministers. It’s not helping, but small businesses keep on doing what they need to do.

The other cause for concern is minister Gray’s large portfolio. It is likely that the resources and energy portfolio will take the majority of his time.

While this may sound fair given the importance of those sectors to Australia, the fact is the small business sector is larger, both in terms of value added to the Australian economy ($313 billion in 2010-11 compared with $126bn for the mining sector, according to the Department of Industry, Innovation, Science, Research and Tertiary Education) and the number of people employed (4.8 million compared to 161,000 in mining).

This fact is in part recognised by the government retaining a parliamentary secretary, Bernie Ripoll, to assist the minister with small business issues.

I hope minister Gray and parliamentary secretary Ripoll are not distracted by the difficulties of a government in transition to yet another prime minister and instead respond to pressing need for reforms that make Australia not just a relatively easy location to establish a business but also to run a business.

The goal for government should be to create an environment that encourages more people into business and that such businesses succeed at a higher rate than elsewhere.

In an ultra-competitive global environment, where countries in our region are stepping up, we don’t have the luxury of being able to indulge personal interest at the expense of the national interest.

Alex Malley is chief executive of CPA Australia.