PM for a day comments

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If you had the power to change/introduce one law/policy that would have the biggest positive impact on SMEs, what would it be?

Executive chairman of SME Association of Australia Craig West
I’d change how government agencies interact with SMEs. The bureaucracy, especially with the ATO and ASIC, is ridiculous and painful for small business. A few recent examples are the ATO mistakenly direct debiting one business and it took six weeks, filling in forms, 2-3 hours on the phone and multiple emails before the money was reimbursed. Another SME has been trying for more than six months to get an ATO ruling on their employee share plan.
I’d get rid of old rules and simplify how SMEs are able to deal with government departments.
With old-fashioned, slow and bureaucratic agencies it either takes an SME owner time (which they don’t have) or money (using an accountant or adviser) to sort out issues.
The ATO and the government overall need to look at investing in digital technologies to make life easier, but this is not their focus. If they made dealing with the tax office as easy as possible, they wouldn’t have to spend so much time enforcing compliance.
Really, the rorters are in the vast minority, yet this is what the ATO and ASIC focus on, rather than on making it easier for the vast majority of small business owners to comply.

Australian Small Business and Family Enterprise Ombudsman (ABSFEO) Kate Carnell
I would like to see workplace relations simplified by establishing a small business industrial agreement which would flatten out penalty rates (as happens under union-agreed EBAs) and would make is easier to remove staff that are a bad fit or when the business is trading badly.
This could be achieved with a payment similar to a redundancy. This would reduce red tape, save time and encourage small business operators to hire more people and grow their business.

Australian Packers and Craters small business co-owner Tracy Woodford
“If I was PM for a day I’d 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.
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.
As PM I’d not only make it easier to hire staff, I’d also give small business a tax break for hiring staff. If we could easily hire more staff, there’d be less unemployment. We have 15 staff (7 fulltime, 8 casuals) and the business could do with 20. We can’t afford to put our casuals on fulltime because then we’d have to pay sick pay, give them public holidays and so on – and the work would still need to be done on public holidays, so I’d have to employ casuals to do that and in effect I’d be paying for the same job twice.”

The Bank Doctor Neil Slonim
What I would like to see change is the way the SME sector is represented. SME representation is fragmented and under resourced and whilst the people involved are capable and well intentioned they are unable to match it when dealing with better resourced and structured parties like big business, unions and government. The impact of this change would be the SME voice would be better heard and more likely to be acted upon.

This one is not so much a law or a policy but more a principle and that is that small business owners should be treated no differently to consumers when it comes to legislation that provides protection from operators that seek to take advantage of those in the community who lack financial literacy. This would mean fewer time poor and relatively unsophisticated small business owners would be taken advantage of by less scrupulous operators.

Finally, payroll tax – this is a big disincentive to take on additional staff. Removing or at least reducing this impost for SMEs would make a significant difference to employment and output.

Ferrier Hodgson Director Sallyanne Pitt
I would like to see financial incentive/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.
All too often, I see businesses in the SME sector experiencing financial distress or failure, because of their inability to:
- Develop (and execute) a robust business plan;
- Maintain adequate financial records to enable sound and timely decisions to be made;
- Appropriately allocate working capital resources and undertake sound working capital management;
- Keep up-to-date with current legislatory reforms that will impact them. Of recent note being Safe Harbour legislation and Personal Property Securities Act.

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. I am of the opinion that with increased education (and incentive to do so) that it will only serve to benefit the sector and grow its contribution to the Australian economy.

Grant Thornton Financial Advisory Partner Cameron Crichton
Introducing a series of incremental increases to the base rate of GST (say 1% per year for the next 5 years) could be used as a mechanism to reduce personal income tax and help stimulate consumer activity, without further increasing the complexity of the Australian tax environment. Consumption based taxes are efficient to administer and Australia’s GST rate currently sits at the lower end of its OECD peers (the unweighted average in 2016 was 19.2%).
From a working capital perspective, SME’s are generally net remitters of GST (either monthly or quarterly). 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).