Small business casts eye to busy year on State and Federal fronts

Wednesday 30 December, 2015 | By: Default Admin | Tags: Federal Election, State Election, four-year terms, tax reform, payroll tax

Queensland small businesses look forward to 2016, with a Federal Election on the agenda and a State Government looking to make good on its growth and employment commitments.

The Chamber of Commerce and Industry Queensland (CCIQ) sees 2016 as being a “make-or-break” year for the Palaszczuk Government with much work needed to be done.

CCIQ Director of Advocacy Nick Behrens said the Queensland small business community had been patient with the new and relatively inexperienced Labor Government, but this would not last much longer.

“From a small business perspective, 2015 has been a challenging year with a surprising election result that caused much of the previous State Government’s reform momentum to be halted,” he said. 

“The Palaszczuk Government’s legislative agenda to date has largely been around unwinding LNP reforms, cashing in on anti-Newman sentiment and delivering outcomes driven by the unquestionable influence that the Queensland union movement has on this government.

“Disappointingly, key policies of reducing the impact of payroll tax on small business and delivering lower workers’ compensation premiums were abandoned or unwound – adding a half billion dollars to the cost of doing business in Queensland.

“At the same time the Strong Choices campaign to pay down debt, reinvest in infrastructure and deliver lower electricity prices was a casualty of the election result.”

Mr Behrens said 2016 would be a make-or-break year for the State Government as it responds to the tsunami of reviews it had commissioned.

“The State Treasurer Curtis Pitt finds himself at the crossroads following a promising start with the State Budget in July,” he said.

“The fiscal restraint evident in July has already largely been undone by a ballooning public service, as confirmed by the MYFER in December. Even more of a worry is a state economy that is domestically stalled and in need of dramatic priming.

“While the State Government is investing in innovation with the $180 million Advance Queensland initiative, it will need to do significantly more – such as investing in infrastructure.

“The patience that has been afforded to the State Government by the Queensland small business community in 2015 will be transitioned without prejudice to holding it to account on what it is doing to help small business to grow and employ.”

Highs and Lows for 2015:

Highs

1.         The State Government investing $180 million in the Advance Queensland program, placing knowledge-based industries at the core of Queensland’s economic strategy

2.         Electricity price stability finally occurring with regulated electricity prices across the state falling in real terms following a decade of increases that saw electricity prices double for business.

3.         The most small business-friendly Federal Budget in decades with the Growing Jobs and Small Business Package that delivered savings of $1.1 billion to Queensland small businesses.

4.         The change in Federal leadership that put Queensland back on the map with a rekindled relationship between both Governments and leadership that is boosting business confidence.

5.         A remarkably resilient Queensland jobs market, with the creation of 30,200 new jobs and an unemployment rate that has fallen from 6.6 per cent to 6.1 per cent (trend).

Lows

1.         The Strong Choices campaign of asset recycling being a casualty of an election that now significantly impedes the State being able to pay down debt and reinvestment in infrastructure.

2.         Winding back of workers’ compensations reform, adding $250 million to the cost of running a business in Queensland.

3.         Abandoning an increase in the payroll tax exemption threshold from $1.1 million to $1.4 million that would have saved Queensland small businesses $750 million over a three-year period.

4.         Despite the creation of the Red Tape Reduction Advisory Council, the State Government has failed to identify how it will combat this vital issue for small business.

5.         A domestic economy that is contracting with state final demand in Queensland over the year to the latest quarter falling by 2.5 per cent with business investment in free fall.

Mr Behrens said there were many pivotal issues to be dealt with in the next 12 months for Queensland’s 406,000 small businesses, including:

  •             Embracing holistic tax reform, which includes raising and broadening the GST that will not only deliver revenue adequacy to address Australia’s increasing age dependency ratio but boost the simplicity and international competitiveness of our tax system.
  •             Delivering a national workplace relations vision that better meets the needs of contemporary workplaces and a modern economy that addresses business difficulty with penalty rates, unfair dismissals and more flexible working arrangements.
  •             Ensuring that as part of Local and Federal Government Elections in 2016 the importance of small business is recognised through policies that help them grow and employ.
  •             Holding a referendum on Queensland moving to fixed four-year terms, that minimise the negative economic impact of state elections and provides the business community with greater certainty to plan.
  •             The State Government to dramatically strengthen its economic strategy to embrace reducing costs to boost the competitiveness of Queensland business, reducing red tape and reinvesting in infrastructure.

 

Recommendation for the State Government in 2016

Transition from a consultative approach that has centred on Ministers being networkers and ambassadors for their portfolios to Ministers being the champions and enablers of the change necessary to grow the Queensland economy.

Recommendation for the Federal Government in 2016

Capitalise on the ‘Turnbull Effect’ and use part of this political capital to strengthen the Coalition Government’s workplace relations and taxation reform policies to take to the next Federal Election to get a mandate from Australian voters.

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