Liberal Party small business policy:

Revitalising small business in Victoria

Reducing the tax burden

A fairer WorkCover system

Supporting small business in industrial relations

Tackling public liability insurance

Doing business with government

Cutting red tape

Women in small business

Information Technology

Export driven small business

Linking small business to training, skills and research

 

 

Revitalising Small Business in Victoria

Small business is the engine which drives Victoria's economic growth.

Our ability to achieve increased employment and prosperity depends crucially on policies which foster growth and enterprise among small businesses.

Unfortunately, the Bracks Labor Government has, from its earliest days, conducted an all-out assault on the small business sector.

This commenced with the introduction of the Fair Employment Bill, which would have re-regulated the labour market and granted trade unions enhanced rights of entry to small business premises - even if that premises was the family home.

This was followed by Labor's abortive attempt to impose a flat rate land tax on all Victorian small businesses - a policy which was strongly opposed from the outset by the Liberal Party.

Labor have increased WorkCover premiums, consistently failed to stand up to union thuggery and had to be dragged reluctantly into any action to address rising public liability insurance premiums.

Meanwhile, Labor has taxed small businesses by stealth. Having failed to implement their flat rate land tax, the Bracks Labor Government allowed small and medium businesses to be dragged into higher land tax brackets, creaming windfall tax gains. Stamp duty revenue from insurance premiums has grown massively under the Bracks Government, due to escalating insurance costs.

The Liberal Party strongly supports small business, with its ethos of effort and enterprise. The Liberal Party's plan to assist small business will:

· Alleviate the present and future tax burden by significantly increasing the payroll tax threshold

· Create a fairer WorkCover system and tackle public liability insurance costs

· Support small businesses which are affected by unlawful industrial action

· Extend the natural gas network to reduce energy costs for small business

· Increase opportunities for small businesses owned by women

· Reduce and cut small business red tape and compliance costs

· Establish a small business ombudsman as an advocate for small business

 

Reducing the tax burden

The Liberal Party will ease the burden for growing small and medium businesses by raising the payroll tax threshold from its current level of $550,000 to a new level of $750,000 by 1 July 2006.

This will have the effect of ensuring that small and medium businesses that continue to invest, grow and increase employment are not faced with the prospect of being dragged into the payroll tax net as a consequence.

The increased threshold will be phased in from 1 July 2005, with an initial increase to $650,000. From 1 July 2006, the threshold will be $750,000.

The payroll tax rate will remain at its July 2003 level of 5.25%.

The cost profile of this initiative will be:

This initiative will preserve the intent of the original payroll tax threshold - namely to protect small and medium businesses from the requirement to pay, and comply with, the tax.

The beneficiaries of this move will be concentrated in industries like manufacturing, wholesale trade, property and business services.

It will remove any payroll tax liability for employees, independent contractors and employment agency staff working for a business with a payroll between $550,000 and $750,000, resulting in a dramatic drop in the marginal cost of employing additional staff in those enterprises.

To illustrate the impact of the initiative, a business with a payroll of $740,000 would pay $9,975 in payroll tax under Labor policy. That same business would be relieved of payroll tax altogether by 1 July 2006 under the Liberal policy, freeing up that money to put towards additional staff or higher wages.

A fairer WorkCover system

The Liberal Party supports a workers compensation scheme that is fair, efficient and affordable for the whole community.

Under Labor, small employers have been hit with massive premium increases, while WorkCover's unfunded liabilities have soared due to Labor encouraging a flood of common law claims.

The Liberal Party will improve the WorkCover scheme, reducing costs to employers over the long term and providing better help for injured workers.

This improvement will be implemented through a five point plan:

· Assisting and rewarding safety improvements

· Introducing a fairer premium system

· Allowing employers to take greater responsibility for claims handling

· Providing better support for workers with ongoing injuries, and

· Tackling rorting and abuse.

The Liberal Party will establish a program under which employers who implement recognised safety initiatives with proven benefits will have those benefits reflected in reduced risk assessments and premiums from the start of the next premium year, rather than having to wait many years for the safety benefits to be fully reflected in lower premiums.

Labor's inequitable "rounding up" of industry rates to the next highest premium band will be abolished and employers' premiums will provide true insurance cover so that employers can budget with certainty based on known premium rates - premium rates will not be retrospectively changed based on the current year's claims experience.

Supporting small business in industrial relations

The Liberal Party supports an industrial relations system which promotes flexibility and productivity in the workplace.

We will maintain Victoria's unitary system of industrial relations, which has simplified compliance for small businesses and avoided any duplication and overlap between State and Federal industrial relations jurisdictions.

In addition, the Liberal Party will tackle union militancy in order to protect small businesses that are affected by thuggery, stand-over tactics or intimidation.

This will be done through the establishment of an Industrial Relations Inspectorate, which will have responsibility for cleaning up industries plagued by union disruption.

A new service will be established to provide assistance and advice to small businesses in relation to industrial relations issues, helping to ensure that small businesses are equipped to enforce their rights through appropriate legal channels.

Tackling Public Liability Insurance

The Liberal Party has detailed a comprehensive plan to tackle the crisis in public liability insurance costs, which has gripped small businesses across Victoria.

The Liberal Party's plan is based on a need to restore a sense of individual responsibility to the debate over public liability.

In summary, the Liberal reform initiatives will:

1. Ensure that where people voluntarily engage in a risky recreational activity with an accredited operator, they accept responsibility for minor injuries incurred in the course of that activity;

2. Introduce proportionate liability where several defendants separately contribute to an injury or loss;

3. Make law firms which take on "no-win, no-fee" cases responsible for ensuring the other party's costs are paid if their losing clients are unable to or unwilling to pay;

4. Require "no-win, no-fee" advertisements to disclose that the client will generally be liable to pay the other side's legal costs if the client loses;

5. Allow reputable business and community organisations operating on State Government land to take public liability cover jointly with the Government at an incremental cost reflecting the risk involved, thus eliminating the requirement for them to provide $10 million of cover to the Government before being allowed to operate;

6. Provide risk management guidelines to businesses and community organisations through the Government's in-house insurer, the Victorian Managed Insurance Authority;

7. Assist industry associations and associations of community organisations to establish pooled risk management and insurance;

8. Put industry associations and associations of community organisations in contact with reputable and relevant potential overseas insurers where they cannot find affordable insurance within Australia;

9. Restrict the legal costs payable to successful litigants in relation to small claims;

10. Encourage pre-litigation procedures to bring about early settlement of claims.

These initiatives will help to put downward pressure on premiums and assist small operators to gain insurance cover.

Doing business with Government

The Liberal Party will establish a Small Business Ombudsman to assist small businesses that have difficulties dealing with government departments or agencies. The Small Business Ombudsman will be an advocate on behalf of individual small businesses to ensure they are treated fairly.

The cost profile for this initiative will be

In addition, the Liberal Party will impose a 3% penalty against government departments and agencies that do not pay their accounts within 30 days.

The Liberal Party in government will also:

· Continue the StreetLife program at a cost of $2.4 million over four years. The funding profile for this initiative will be

2003-04	2004-05	2005-06	2006-07
$0.6 m	$0.6 m	$0.6 m	$0.6 m

· Ensure that the new network of RuralLink branches in country Victoria adequately provide:

(a) All government advice and services
(b) Access to banking and financial services
(c) Single point of payment of government charges.
(d) Start up business advice
(e) On-going business advice
(f) Business mentoring, and
(g) "One Stop" licensing shop - all necessary small business and licenses.

· The current network of Victorian Business Centre Shops will also continue to operate in metropolitan Melbourne and regional centres.

· Identify causes for small business failure so as to address the failure rate (for example, VECCI research suggests that failure usually occurs when a small business grows to a size where financing, personnel and market requirements change. Strategies such as the South Australian Small Business Emergency Service, could prove effective in dealing with this phenomenon).

Cutting red tape

Under the Bracks Labor Government, the compliance costs and the pace of regulatory activity have significantly increased (VECCI 2002-2003 State Budget submission).

The Liberal Party will embark on a major assault on reducing and cutting small business red tape with the aim of simplification and removal of those regulations, which unnecessarily prevent private sector competitiveness.

There will also be a requirement that all Cabinet submissions include a small business 'Regulatory Impact Statement' to assess whether the proposed policy has an adverse impact on the regulatory burden for the small business sector.

In addition, all new legislation will be required to include a 'Regulatory Impact Statement' when it is introduced into the Parliament, as happens in the Federal Parliament.

Women in Small Business

Women play a significant role in small business and have a strong record of starting up and maintaining their own business. A Liberal Government is committed to increasing opportunities for women owned small business.

· Implementing a government website, using existing resources, for all registered women business owners to register so they have one database with linkage to all government procurement related websites. This would include interactive advice on issues such as:

- best business practices
- management techniques
- networking
- news and events
- market research for start-ups or growing a business
- selling to the government
- subcontracting opportunities

· Provide forums on financial advice for business planning for start-ups and growing existing businesses

· Developing networks to provide mentoring, networking and protégé programs for women in business.

· Establishing an annual Women's Business Week program.

Information Technology

There is an ongoing need to support and encourage small and medium sized businesses to take up information technology so as to gain the benefits of e-commerce. A Liberal Government will:

· Promote the benefits of using IT and e-commerce in business through information and training opportunities in conjunction with local networks, local businesses and collaboration with industry sectors.

· Continued provision of programs to encourage ICT innovation and commercialisation.

· Promotion and recognition of "ICT Best Practice" among small businesses through industry award programs.

Export driven small business

A Liberal Government will foster a strong export culture by:

· Facilitating export workshops both in metropolitan and rural areas aimed at presenting opportunities and increasing exporting knowledge and skills to small business.

· Creating export networks through business clusters in industry sectors both metro and rural, to develop export groups.

· Establishing a separate award category at the Governor's Export Awards recognising and rewarding small business excellence in export.

Linking small business to training, skills and research

A Liberal Government will assist small businesses with research and development, training and attraction of skilled labour by:

· Supporting a program for postgraduate students from universities being placed in small businesses to assist with specific research projects.

· Facilitate linkages between small businesses and universities for accessible research and development.

· Encourage research and development through improved access for small business to science and technology assistance programs.

 

 

For more information on Liberal party policy, please click here.