An economic reset
Policies that back small and family businesses and the self-employed are the foundations for national renewal. by tim wilson.
Australia’s economy needs a reset that puts small and family business and the self-employed at the heart of an alternative vision and reform agenda.
Australians work some of the longest hours in the world. Our economy might be sluggish, but Australians are not.
Every day Australians are getting up early, battling traffic and juggling family responsibilities. They give their all during business hours, only to arrive home late and exhausted.
Yet no matter how much Australians work, they don’t feel like they’re getting ahead. Inflation is outstripping wages. The most recent annualised wage price index data confirms it.
Household savings have gone down under the Albanese government. Costs continue to rise.
This is Australians’ lived reality under current economic settings. It is not working. We need to get back to an economy where hard work pays off and Australians want to back themselves.
Workers going backwards
That starts with the Albanese government ending its inflationary agenda.
The government has tried to fob off responsibility for recent interest rate hikes by claiming that it has come from private demand. This is demand denial.
It is most clearly demonstrated through employment data. Australian Bureau of Statistics data shows low unemployment. But analysis shows there is a private sector employment crisis that is only creating two in 10 jobs.
Meanwhile, eight in 10 jobs have been created in the non-market sector of direct and indirect public expenditure.
This is why the treasurer can say with a straight face that inflation is demand-driven because federal and state governments are pouring debt petrol on a demand bonfire.
The private economy is left competing for talent with rising wages they can’t afford. Meanwhile, state governments are increasingly indexing their taxes and charges to the consumer price index. Consequently, households and small businesses are experiencing taxation inflation too.
Similarly, the flow through of the government’s agenda to rig the rules in favour of unions is putting upward pressure through industrial relations inflation.
While the case for these costs is based on what big business can afford, small business picks up the bill without the capacity to pass them on. Their choice is collapse or become less competitive.
That is why more than 41,000 small businesses have collapsed since the election of the Albanese government. There were record small business insolvencies last financial year, and we are on track to exceed them this financial year.
Even Barbeques Galore has collapsed during the middle of an Australian summer.
Yet when confronted, Minister for Small Business Anne Aly attacked these former small businesses as “dodgy”. That’s contempt in one word.
Unleashing Australia's ingenuity
Turning the situation around starts with giving Australians in small business hope.
In earlier generations, Australians could have a salary and grow wealth through property. Increasingly, Australians will have the safety of a salary and grow wealth through a side hustle, shared equity scheme or a small business.
Policies that back small and family businesses and the self-employed are the foundations for national renewal because behind every small business are livelihoods, community connection, grants to local sports, and a first employer.
That’s why we need an economic reset that unleashes Australia’s ingenuity and potential.
The forthcoming decade is going to be the most important for the Australian economy since the reform era of the 1980s.
We are heading into a new economic era with the settings under our control set to go out of control.
And that is through a reform agenda to prepare for the technological changes ahead and competitive reindustrialisation.
No nation is self-sufficient; those that attempt to be go backward as they lock themselves off from technological progress.
The efficiency and productivity dividends from artificial intelligence can be profound if harnessed, empowering workers to be their own CEOs.
Disruptive geopolitical events and the redirection of supply chains provide avenues to rebuild our sovereign capacity where it aligns with our competitive advantage.
Reform should seek to expand our competitiveness, not hamper it.
Taxpayer respect
It’s also important Australia’s taxpayers are respected. Taxes should be spent prudently.
That means $15 billion of taxpayers’ money shouldn’t find its way into the hands of organised crime through the CFMEU.
Nor can we tolerate the ongoing corruption of government programs, like the NDIS, especially when the waste is financed by debt – which is tomorrow’s taxes.
Doing so is essential to make the budget and tax system sustainable.
Intergenerational fairness should be part of our tax system, and that’s by incentivising the type of behaviour we want. The battle lines are clear.
Jim Chalmers is floating a new housing tax by increasing capital gains. He is after revenue, not more housing.
If Chalmers’ new housing tax is introduced, it will undermine investment in new builds and increase the cost of rents and home ownership.
We are focused on reducing taxes so those who apply their physical and intellectual labour can get ahead, as well as those who invest to create economic opportunities.
That’s why a Coalition economic agenda will boldly and audaciously favour small and family business, and the self-employed. And we are going to back them hard.
Tim Wilson is Shadow Treasurer.