Here is a message from our Chairman followed by more details on what we need now and from 2020+
The next decade must be about policy adaptation on key national issues
A message from COSBOA’s Chairman Mark McKenzie
Much of the national discussion in recent weeks has rightly focused on the bushfires that have devastated regional communities across Australia. While communities were destroyed and lives lost, the climate change advocates and climate change deniers engaged in the same old hackneyed debate that serves no useful purpose. The fact is that the climate has changed. Whether the change has occurred due to increased CO2 emissions caused by human activity or not, is largely irrelevant. A much better use of our time would be for Australia’s political leaders to work constructively to address the social and economic impacts that have been created by this change.
Small business owners, especially those retailers serving communities in rural and regional Australia, did it tough during 2019. Their communities experienced a prolonged drought that devasted local economic output and household incomes, while their own businesses experienced reduced sales as a result of electronic commerce affording their traditional customers access to cheaper products via online shopping – or their customers simply not having enough money to buy local products and services. To top it off, the traditional increase in sales that occurs during the summer holiday break has not eventuated due to unprecedented bushfires with businesses along the NSW South Coast, for example, reporting revenue falls of up to 60% over the Christmas/New Year period compared with the same time last year.
Before the fires started, many local communities were under stress. Some regional communities in NSW, Queensland and Victoria, for example, ran out of water in December and the outlook for water supply in many other communities is bleak. Small businesses in these areas suffered dramatic declines in sales as a consequence. Some local hardware and general supply stores, for example, have reported annual sales up to 80% as a result of farmers having no need for supplies because the drought had decimated their outputs.
Regional and metropolitan businesses reported a sharp increase in utility costs – especially electricity and gas - against flat sales revenues, forcing them to make difficult choices between keeping locals employed or closing their doors altogether.
For this reason, small business is a bellwether when it comes to the economic and social well-being of local communities – and the first half of 2020 looks set to be really challenging.
Within this context, small business owners, and indeed the community at large, is looking for our politicians to stop bickering and implement genuine solutions to the real problems that are impacting the social and economic well-being of Australia. We are tired of Federal Coalition action on climate change being held to ransom by a small band of climate change deniers and we are fed up with the Australian Labor party pandering to the left-wing union ideology that is blocking action on much needed industrial relations reform - reform that is needed to unlock potential workforce productivity and deliver increased wage growth for all.
We must advance solutions to climate change by promoting actions that support the capacity of our population to adapt to the new reality created by climate change. Even if we were to reduce our national greenhouse gas emissions to zero, we will still be in the grip of climate change. We must therefore take a lead from Darwin’s theory of evolution and adapt to this new reality by improving our Nation’s capacity to deal with an increasing frequency of natural disasters – and our ability to rebuild communities quickly following these disasters.
We need to rethink water management as a matter of priority. At its most basic level, we need to build more dams. Yes, some will say, ‘what value are dams when we are in drought?’ The fact is droughts don’t last forever. Storing more water during non-drought periods is a basic strategy for surviving prolonged drought. It is interesting to note that we have allowed the populations of Australia’s major capital cities to more than double while ignoring any commensurate increase in dam storage. And we wonder why we have a problem with water. If we are going to suffer longer droughts then we need to be storing more water during non-drought periods - even if only to keep pace with the water demands of an ever increasing population.
Energy is another area for immediate focus. It is time to dust off the previous National Energy Guarantee, put the Coalition Government’s climate deniers back in their box and for the Federal Government, the Federal Opposition and all state and territory governments to move to adopt this framework to encourage investment in reliable and affordable electricity supply in the future. If the coalition can’t get the small band of votes needed from the climate change deniers within their own rank, then they should reach out to the opposition and get them to support the policy (as they have repeatedly said they would do).
The low growth of our national economy, which is producing low wage growth, must also be addressed in 2020. We need to urgently deliver productivity improvements through reform of our industrial relations system which, in turn, will deliver wages growth. The current system is not working for small and big business alike, but nor is it working for the workers who are receiving only modest wage rises in the face increased costs of living. It is time to sideline the ideology of laissez-faire economists and the union hardliners and have a sincere conversation about how the IR system can be modified to increase the productive capacity of the national workforce – and simplified to ensure that wages are paid in accordance with the law.
All of this will require an unprecedented period of co-operation amongst all stakeholders. We must stop ‘admiring’ the problems and instead develop and implement real solutions. This will require ideology to be set aside in favor of pragmatism. Business must work constructively with unions to advance genuine improvement and vice versa. Regulators need to work with the business community to achieve public good outcomes – as opposed to adopting aggressive regulatory stances that ultimately introduce disincentives to employment growth, with the recent policy stance of Safe Work Australia on the management of mental health in the workplace being a case in point.
Regards and good luck in future endeavours
Mark McKenzie - Chairman COSBOA
What does COSBOA want in 2020 and beyond?
Small business people need policies and processes that reflect reality and practicality.
We will resist those who want a Laissez-Faire approach to economic management (often called neo liberalism) and those that want Neo Socialism. Both approaches are based on failed ideology and favour a few in power, create inequity and destroy economies. All the parties seem to have members who favour one or the other. With that in mind:
We need a workplace relations system that is easy for employers, employees and regulators to use and understand.
The superannuation collection process should be simplified to free up employers to concentrate on their business and give employees a greater say in what happens to their retirement funds.
We need the self-employed to be seen as people with similar health rights as their employees. The self-employed have responsibilities as do all people but those responsibilities should be achievable and equitable.
We must build upon the work of the Chairman of the ACCC and ensure that competition can still occur even in the world of mega global corporations. The biggest corporations do lose touch with community as shown by the behaviour of the banks. Competition policy must have community and consumers always at heart. Small business people are also consumers and are also at the heart of community.
The energy issues must be addressed without ideology and ego getting in the way of good policy. As a minimum the National Energy Guarantee must be implemented.
Vocational training has to be given a higher priority if our economy is to weather future storms and take advantage of our best asset – our people.
Professional industry associations with proven direct small business membership must be given more say in national policy development. This should be done in partnership with the Small Business and Family Enterprise Ombudsman and the various state small business commissioners.
We must gradually roll out a national program of “Local Economic Development” where local business people, the ones who put their capital and their houses and assets into business activity, are given more information and through that a greater opportunity to have an impact on their economies.
Firstly small business people need respect. We have had an improvement in respect over the last few years with issues such as mental health and unfair contract terms being addressed but there is emerging a trend from some regulators, and policy makers, that shows a lack of understanding of small business and from that a lack of respect for the health and indeed the rights of the individual self-employed person and their families. If policy makers create difficulties for the employer then it adds to the stress of the employee.
One particularly concerning organisation is Safe Work Australia (SWA), who believe that a self-employed person is legally responsible for their own mental health and the mental health of others. Does SWA intend to test all self-employed people for mental health and if they fail the test they will be fined and/or sent to jail? Will having deep depression be a crime for the self-employed? This approach shows a dangerous lack of understanding from SWA and no connection to reality. In the end by ignoring the mental health of the self-employed SWA also puts at risk the mental health of the employees.
We are awaiting a report on sexual harassment from the Australian Human Rights Commission, sexual harassment is a scourge that needs to be removed. We must not however make an employer responsible for the behaviour of employees. Eliminating sexual harassment is a societal issue not just a workplace issue.
The other key area where respect seems to be somewhat lacking is workplace relations. Prior to the election we had a campaign run by the ACTU and others making false claims about workplace conditions in Australia. It was a campaign that was dangerous to employers and employees alike. Claims that Australia had the lowest minimum wage, generally low wages, a high rate of casualisation and a poor workplace regulator were not just untrue but were designed to create panic and distrust where there shouldn’t be any.
There was however the emerging issue of slow wage growth (an international issue) and underpayment of wages as various large companies owned up to getting pay and conditions wrong.
The way to fix this is to make the system less complicated. It is certainly true that big businesses should be better at dotting their ‘i’s and crossing their ‘t’s but the reality is that there are just too many t’s and i’s and too many awards with archaic and confusing words. This is difficult for big and small businesses and their employees to get their heads around.
And for those who claim that the big businesses did it on purpose (some did and have been dealt with by the regulator) just note that one of the recalcitrant big businesses is the law firm for unions Maurice Blackburn. This is the company that claims to be experts on workplace relations and the champion of the oppressed worker, yet they couldn’t get it right and underpaid workers millions of dollars.
Another reason to remove the complexity of workplace relations is out of respect for the regulator – the Fair Work Ombudsman. A simpler system is easier to regulate and it is certainly harder for the few dodgy people to get away with deliberate underpayment.
Those who resist simplicity are the unions, lawyers and some industry associations. There aren’t many of them but they are powerful. Powerful people love complexity as it might help keep them in power.
The issues around energy - the price, the environment and availability – has been another debate that has attracted emotion and aggressive lack of respect from the extremes at both ends of the argument. The small number of government backbenchers and even some ministers who deny change is happening or that we should not do anything about the change need to understand they represent the people not their ideology or their egos, and the great majority of people want something done. These political extremists have attracted extremists from the other end of the spectrum through the Extinction Rebellion movement who create disruption to push their creed.
A plan is what we need, a plan that isn’t about who is right but is about what can we do. COSBOA will soon present some ideas, a plan for managing the change and the risks associated with energy and the environment - no more angry debates just a comprehensive plan.
In this time of huge global technology corporations and social media giants we need to follow the lead of the ACCC and aggressively ensure that competition will occur and that dominance through control of technology and communications does not create a worse world for consumers and communities.
An excellent way to manage change and give our economy a better chance of remaining one of the world’s best is by skilling and reskilling workers - continuously. Our Vocational Education and Training system (VET) is going through its own change and that needs to be managed much better. It seems that the ideology of ‘laissez-faire economics” is being applied to VET. That is not going to achieve anything except a trip backwards.
Here it is worth stopping and considering the thoughts of Robert Menzies, the founder of the Liberal Party. This is a quote from his famous “The Forgotten People” radio address made in 1942:
If the new world is to be a world of men (sic), we must be not pallid and bloodless ghosts, but a community of people whose motto shall be, “To strive, to seek, to find, and not to yield.” Individual enterprise must drive us forward. That does not mean we are to return to the old and selfish notions of laissez-faire. The functions of the State will be much more than merely keeping the ring within which the competitors will fight.
The speech written as it was at a low point in WWII, decried communism/socialism as well as Laissez-Faire economics. Good man. Removing the ability of business people to run their business (socialism) or just doing nothing and letting those with money and muscle run rampart achieves nothing.
We must stop saying “let the market decide” and instead say “let’s make sure the market can decide”, then we will have, for example, the best training sector, a competitive energy sector and a better future.
Empowering business people with more say in policy and in local economic activities through Local Economic Development is certainly a way to manage the continuous change of our modern world. Rather than a few ‘gifted’ people in ivory towers* making decisions for the rest of us we need them to provide the information to empower others with the information needed to understand our situation and the techniques needed to manage.
The knowledge and experience to be found in various industry and business associations with direct small business membership should no longer be discounted or ignored. There is certainly a belief from some that industry and business associations are vested interests and are not to be trusted. These groups wear their vested interest on their sleeves and do not hide who they represent, which is different from some MPs who claim to represent the people but really represent a small cadre of ideologues. Industry association people will nearly always have knowledge and information that will inform policy, real knowledge and information from the grass roots of society. When it comes to peak bodies (COSBOA is a peak body) policy makers need to be sure it is reality and practicality being promoted not the thoughts of a few ideologues or a flawed federation.
Finally, over the last decade or so we have seen the development of an essential public sector infrastructure for our economy and community – the Australian small business and family enterprise ombudsman and the various state small business commissioners and champions. These people are a powerful group who provide advice and support to tens of thousands of small businesses across Australia. They are there in times of disaster (particularly the state commissioners) and they have real influence on policy. This group must be given more resources and more power – in the end the employers, the workers and the community will benefit from their endeavours. The only people I have heard, over the years, ever complain about the Ombudsman and the commissioners are those from some unionists, some (not many) big businesses and a very few industry associations who see the needs of their association as more important than the needs of their members.
We need government to be pro-active, practical, empowering and transparent.
Instead of ideological debate driven by ego or the beliefs of small groups of fanatics we need professional change management and risk management – change is constant and risk is always present.
*Ivory towers are normally built on foundations of ignorance, arrogance, conceit and sloth. These lofty towers must be pulled down and replaced by ‘welcoming and inclusive’ policy architecture and community engagement. Ivory towers are not just located in the public sector, the behaviour of the boards and directors of some large and mega businesses is driven by their lofty positions at the top floor of a corporate ivory tower where they are remote from reality and humility.