BRW has a great story on Tony Abbott’s and Joe Hockey’s pitch to business this week:
“What business wants is a government that listens to them,” Abbott says. “One that recognises their importance and wants to work pro-actively with them to make it easier to compete and survive and flourish in the marketplace.”
Actually, I don’t think that’s what business wants at all. At least, not big business. Rather, it wants to control the agenda, limit its commitment to the commons where ever possible and maximise rents via reduced competition. The Labor government did not come a-cropper with business because it didn’t listen. It fell apart because it listened too much, negotiating away its policies in public and encouraging rent-seeking.
There are strong echoes of this failure in the Coalition pledges to scrap carbon pricing and the mining tax, both of which in part aim to promote competition in areas of market failure: climate change and Dutch disease. The last thing that Australian economy needs is more listening to big businss.
The BRW story illustrates that the Coaltion’s pitch looks much more attractive for small business though it exists only as ideas, not policies:
There’s some general but vague pledges around industrial relations – swinging the workplace relations pendulum back to the “sensible centre, so that wage claims are realistic and fair”.
There are promises to boost productivity, by reducing gridlocks on highways and in cities across Australia.
And, perhaps most crucially, there’s a pitch to small business. The Coalition will extend unfair contract protections to small business. It will also scale back the government pursuit of independent contractors by ensuring the current laws relating to treatment of personal service income are not changed.
…One area where the Coalition is prepared to make changes is when it comes to start-ups…Labor’s relationship with the start-up world went sour when it announced changes to the taxation of employee share schemes in 2009. Share options are often used instead of higher salaries during the early development phase of a business, with the promise of a greater return when the company lists on the stock market, or sells to another company. Before 2009, employees could defer the tax on shares or rights for up to 10 years, but Labor’s changes mean that tax must be paid immediately.
In May, the then communications minister Stephen Conroy announced a welcome review of the scheme, but the 2009 change has made it harder for start-ups to survive.
Initially, Abbott appears reluctant to commit to a review of employee share schemes: “The problem we’ve got is we’re under enormous revenue constraints, so there are lots of things we would like to do in a perfect world – but we’re unlikely to commit to them pre-election,” Abbott says.
But then, Hockey jumps in, as he does on several occasions, and confirms that a change is on the cards. “Quite clearly, the feedback we’ve been getting is that this is a massive handbrake on start-ups in Australia,” Hockey says. “And in so far as we don’t know, as Tony said, what we will inherit, this is an obvious area for change.”
Perhaps the biggest change an Abbott-led Coalition could make would be in the area of competition.
It has announced a “once-in-a-generation review” of Australia’s competition laws across a range of areas. It will review the Competition and Consumer Act, with particular focus on access regimes and abuse of market power. It will also look at areas such as enhanced competition in banking. “If you’re going to have a fair dinkum review, you don’t rule things in or out, before you undertake them,” Hockey says. “These are the structural changes necessary, rather than piecemeal approaches.”
…Abbott says the dominance of the supermarket retailers, Coles and Woolworths, is part of the terms of reference. How it will be different to three previous parliamentary inquiries into the duopoly’s stranglehold, and whether the Australian Competition and Consumer Commission (ACCC) will get greater power to rein in their dominance, remains unknown.
“You can’t say [ACCC chairman] Rod Sims hasn’t made a difference at the ACCC,” Hockey says. “The decision about a new supermarket in part of western Sydney illustrates that the powers are there. The question is whether the ACCC uses them.”
These all terrific ideas that sit well with me and:
According to Australian Chamber of Commerce and Industry (ACCI) chief executive Peter Anderson, “many of the Coalition’s general principles sit well with the private sector”.
The problem is, principle is all we have to go on.
