Rudd, Gillard, ALP leadership showdown: 10 things that start-ups need from the prime minister

Top 10 things that start-ups need from the prime minister

By Oliver Milman
Thursday, 23 February 2012


It’s telling that Kevin Rudd, the now ex-foreign minister, pointed to business confidence as a key reason for him looking to bring the relentless leadership speculation to a head.


While the rest of the nation is sick to death of the Gillard/Rudd stories, business leaders are worried. Companies don’t like uncertainty at any level, let alone uncertainty about who is actually running the country as prime minister.


Once the dust is settled, start-ups will have to potentially deal with a government headed by someone with different agendas and priorities.


With this in mind, here are the 10 things that start-ups desperately need from our prime minister, whether that is Julia, Kevin or Tony.




1. A shot in the arm for exporters


It’s no secret that many small businesses are suffering from the strong Australian dollar, with firms relying on tourism and export markets the hardest hit.


While it is, of course, inconceivable that a prime minister of any political stripe would haul the Aussie dollar off the market, there is still plenty that a Rudd/Gillard/whoever government could do to help.


A good start would be to review November’s unwelcome change to the Export Market Development Grant program, which helps businesses secure intellectual property and customers abroad.


The minimum expenses threshold was hoisted from $10,000 to $20,000, while the maximum grant has been slashed from $200,000 to $150,000.


How about making life easier for struggling exporters, Julia/Kevin? After all, the rewards are clear – research released by Regus today shows that 62% of Aussie businesses expanding into international markets are expecting a revenue leap this year.




2. Encourage risk taking


Australian investors are widely regarded as overly-conservative. Indeed, many frustrated entrepreneurs complain that plenty of cash is available, only for risk-adverse investors to keep their hands in their pockets.


While it’s unrealistic to expect Australia to turn into some sort of southern hemisphere Silicon Valley overnight, the prime minister could do a few things to encourage investors to back innovative but as-yet unproven start-ups.


A good starting point would be to look at the new Seed Enterprise Investment Scheme in the UK, which will allow investors to plough £100,000 into a start-up in return for an upfront 50% tax break.


Aussie venture capital body AVCAL said they would welcome such a move, as would start-ups. If the cash strapped UK can afford this, why not us?




3. Make workplace laws clearer


The need to amend the Fair Work Act is a drum that has been beaten by business groups and, to varying degrees, the federal opposition, for some time.


While only a brave prime minister would ever think of going back to WorkChoices, it’s clear that there is a lot of employer confusion out there over modern awards and penalty rates.


Indeed, recent data from the Fair Work Ombudsman found that 26% of retailers have been in breach of workplace laws. Providing clarity and consistency in this area would be a welcome move from the prime minister.




4. Lessen the compliance headache


Every week, there seems to be a new crackdown by government bodies on small business’ compliance.


Whether it’s superannuation, the cash economy or sham contracting, there is plenty of scrutiny of business’ activities. While there are undoubted benefits to the wider community of doing this, it does leave time and cash poor small businesses with a red tape headache.


The prime minister, whoever that is, needs to prune the regulatory burden faced by smaller employers.


One area already under the spotlight is the Paid Parental Leave scheme, which requires SMEs to be the government’s “pay clerk”. A review of this otherwise admirable legislation would be warmly received.




5. More investment for local hubs


Last week, we had the odd spectacle of NSW deputy premier Andrew Stoner parading around on the rooftop of Startup House in San Francisco, sprouting the state government’s subsidising of 12 start-ups that are moving to the facility.


While this is great for the ventures that will make the trip across the Pacific, the NSW government is effectively paying for businesses to leave Australia, never to return.


A better use of state and federal money would be to invest in local start-up hubs. While several incubators and co-working spaces have made the running by themselves in Australia, how about some government support to foster innovation and job creation?




6. Look into a small business bank


StartupSmart has repeatedly called for the federal government to look into the possibility of creating a small business bank, which would lend funds to new, cash-strapped ventures.


The concept has already been established in Canada and the UK, and with Aussie start-ups continuing to suffer from an unfavourable investment environment, a dedicated bank is something that could do with some prime ministerial attention.




7. Hire a national small business commissioner


Happily for small business owners, they now have direct representation in NSW, Queensland, Victoria, South Australia and WA in the form of small business commissioners.


These various commissioners have agreed to meet every two months to share best practice and help with mediation services.


But, as business lobbyists have pointed out, Australia still lacks a national small business commissioner. Given that Mark Arbib has to juggle his federal small business ministry with several other portfolio, all while being in the outer-cabinet, a direct SME voice to the Canberra powerbrokers is even more important.




8. Do more to foster international links


Kevin Rudd is well known for his globetrotting, earning him the sobriquet Kevin 747 when he was prime minister.


However, it’s not evident how much work has been done internationally to further Australian small business interests.


Ministers pay homage – and dole out billions of dollars – to the car industry in Detroit and happily tie Australia’s future to the large-scale export of coal to China, but there doesn’t appear to be a similar effort when it comes to start-ups.


Indeed, some could argue that the situation has even deteriorated, as evidenced by Labor’s crackdown on the living away from home allowance. Kevin and Julia – please think small when you get on that plane.




9. Communicate more effectively


An enduring criticism of this Labor government is its hapless efforts to communicate its position to the Australian public.


By any objective assessment, getting pieces of legislation such as the carbon tax and the mining tax through a sharply divided parliament with a minority government is impressive.


But even though the public strongly supports many Labor policies, it seems they can’t stand the party itself. Communication is something that will have to improve if the government is to be returned at the next election.


This lack of engagement extends to small businesses. Recent research found that just 24% of SMEs know that they can instantly write off the first $5,000 of outlay on any capital asset, starting from July.


Not only do some of the policies need to be tweaked, but so does the message.




10. Revamp the national start-up strategy


Actually, scratch that. How about actually creating a national start-up strategy?


Ever other section of Australian life appears to have a mapped-out government plan, apart from new businesses.


This isn’t the case overseas. As Startup America and Startup UK show, it’s possible for governments and the private sector to work together to boost entrepreneurship. Where is Australia’s joined-up strategy?


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Not to mention looking at tax breaks to ensure business start up founders paying company taxes still get to draw a salary. Payroll taxes need higher thresholds.

When a young high growth business is spending every cent it makes the owners start to feel like a tax collection agency.
David Markus , February 24, 2012
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