There are more than two million small businesses in Australia, of which about 61 per cent are sole traders and about 28 per cent have between one and four employees. About 10 per cent, or 200,000 small businesses, employ between five and nineteen people.

Government economic initiatives can be important for small business. With the right policies Government can help small businesses create jobs and wealth for the community.

Smaller enterprises are more common in construction, services, retail, hospitality and transport – all sectors which are under increasing pressure and disruption.


Cut down red tape

At every level of government excessive regulation is tying down small business. The time and money involved in complying with excessive regulations could be more productively applied to grow the business and the unnecessary duplication makes it worse. Let’s cut the red tape and give small business a break.

Red tape has a direct cost on, and alters decision-making by, business owners. Federal, state, territory and local governments need to recognise the impost and reduce its burden.
Regulation is growing in most economies. To stem the tide, lawmakers need to resist legislative responses as their first reaction to a perceived problem and acknowledge governments cannot eliminate all risk.

While larger businesses have more resources to meet their compliance obligations, many small businesses do not. Governments should listen to the concerns of these small businesses.


Simplify the tax system

Improving the state of government finances involves tax reform and lower taxes, two actions that can encourage economic activity.

Our tax system should provide incentives for people to join the workforce and for small businesses to invest. There is insufficient recognition of the benefits tax reform would have for our economy, jobs, investment and the long-term wealth of our nation. Governments must set out their aspirations for both current and future generations. However, the current policy stall has left us with a tax system that requires comprehensive review and reform.

Our tax system is complicated for many small business operators. Current Australian income tax law is based on historical tax foundations and various changes that have been implemented since to respond to unintended outcomes or new ways of doing business. This creates unnecessary costs and complexity for small businesses, many of which need to employ specialists. Resources devoted to compliance with the tax system could be channelled to more productive activities.


Make it easier to employ people

Australia is a costly place for small businesses to hire, retain and dismiss staff. When times are tough that means jobs and hours get cut. It can also be hard to get workers with the right skills. Let’s make it easier to employ people and create jobs.

Excessive labour costs mean many small businesses do not open their businesses on the evenings, weekends or public holidays. If they do open during these hours it is often small business owners and their families who are working.

Excessive penalty rates hurt people who want to work at these hours but cannot due to business closures. When businesses close customers and employees miss out, and governments lose revenue.

Employers and employees should be free to enter mutually beneficial arrangements that suit their circumstances, while enjoying the protection of a safety net.
Trade unions often use workplace bargaining to advance causes unrelated to the direct relationship between employers and employees, for example limiting the use of independent contractors. We need to limit unions’ bargaining demands to matters directly related to employment relationships.


Build better infrastructure

Small business operators rely on roads, rail and ports to transport their goods – and themselves. Yet our main roads are congested, our ports are bottlenecked, our rail networks are groaning with overuse and our telecommunications network is struggling to deliver secure, reliable and fast internet connections. Additionally, energy costs are skyrocketing and making us less competitive.

This affects us all, but is particularly hard on small business. It’s time to do something about it by building better infrastructure.

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