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PM for a Day

PM for a Day

From the outside it looks like a frustrating career choice: who would truly want the pressure and the hassle of being the country’s Prime Minister?

But if you had the job for just 24 hours and could actually achieve something, free of the headaches caused by the Senate or by pesky backbenchers, well that would be very tempting.

The latest Scottish Pacific SME Growth Index asked more than 1200 small to medium business leaders across Australia what they would change if they were PM for a day, and the results are revealing.

SMEs employ more than two-thirds of Australia’s workforce, so it’s perhaps not a surprise that staffing regulations and excessive red tape feature high on their PM to-do list.

It’s all about the BAS

The top priorities for SMEs were:
• streamlining Business Activity Statement reporting (24%)
• changing the Fair Work Act (22%)
• reducing company tax (21%)
• lightening compliance (10%)
• removing payroll tax (8%)

Following on from the SME Growth Index findings, we asked leading small business advocates what their first action would be to help the sector, if they were PM for a day.

‘Red tape’ has long been a dirty word for SMEs. Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, has a desire to see workplace relations simplified by establishing a small business industrial agreement that would flatten out penalty rates (as happens under union-agreed EBAs) and make is easier to remove staff who are a bad fit or when the business is trading badly.

“This could be achieved with a payment similar to a redundancy,” she said. “This would reduce red tape, save time and encourage small business operators to hire more people and grow their business.”

“PM-in-waiting” Tracy Woodford, co-owner of a Queensland-based small business Australian Packers and Craters, said her first action would be to make it easier and cheaper to hire staff. “Dealing with compliance, Fair Work Act, super, and all these related issues takes you out of the business a lot,” she said.

“Our business would benefit from having more employees, but that would take us into a bigger business bracket, with tougher unfair dismissal and other regulations. We treat our staff well and pay above minimum rates. We have great staff, but over the years there’s always a few who don’t work out or do the wrong thing, and it’s the red tape around employing people that stops us – it’s just too much.”

Red tape remains a headache

For Scottish Pacific CEO Peter Langham, taking on employment red tape and payroll tax would be a PM for a Day priority. “Adding employees is crucial to growth, yet our SME Growth Index indicates that bringing on new employees, replacing staff and dealing with staff issues is having a big impact on the productivity of the sector,” he said.

For others, though, the chance to get their hands on the Treasury purse strings if they were PM is the big temptation. Grant Thornton Financial Advisory Partner Cameron Crichton would introduce an incremental increase in the base rate of GST (say 1% per year for the next five years) in conjunction with a reduction in personal income tax. He believes the resulting stimulation in consumer activity would flow through to more business for SMEs.

And the benefits wouldn’t end there. “From a working capital perspective, SMEs are generally net remitters of GST (either monthly or quarterly),” Mr Crichton said. “Accordingly, an increase in GST would likely benefit the working capital position of most SME’s as they would control a larger fund of GST collections each reporting period (interest free borrowings).”

Ferrier Hodgson Director Sallyanne Pitt also has her eyes on the tax system, but from a slightly different angle. She would like to see financial incentives or tax relief for SME businesses to arm themselves with greater education to assist them in the day-to-day running of their business and understanding their roles, responsibilities, and obligations being a company director.

“It is not necessarily through want of trying but often directors are not sure where to start or how to approach situations when the going gets tough and what is required of them,” she said.

The Bank Doctor Neil Slonim has always had strong opinions about funding options and a fair go for small business. As PM he would make sure the SME sector was treated no differently from consumers when it comes to providing protection for time poor and sometimes financially unsophisticated small business owners from unscrupulous operators.

And for Craig West, head of the SME Association of Australia, his first task as PM would be to invest in digital technologies to make life easier for small business owners. “I’d get rid of old rules and simplify how SMEs are able to deal with government departments.”

To see our PM for a Day's comments in full, click here.

To find out more about how Scottish Pacific helps businesses click here

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