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News

BUSINESSES MUST BE GIVEN HOPE TO LET OUR STATE THRIVE 

5 April 2024

 

Hope – a belief that tomorrow will be better than today - is a beautiful thing. It is what politicians trade on. It is also the thing that gets a small to medium business owner up early in the morning – despite the challenges – striving to make their enterprise bigger, stronger and more innovative. It is this sort of hope that we all benefit from.  

As the NSW Cabinet marks one year since it was sworn in on April 5, 2023, it is a time to reflect on the year that was for businesses. Though not easy, the first year of this new government has given us a strong sense of renewed hope for the 850,000-plus small to medium businesses in NSW. 

After a turbulent start, our businesses have reported improving sentiment in the business conditions surveys held in the nine months.  

The latest results indicate this positive momentum to continue, and this is a sentiment shared across all industries. The NSW Government must ensure it keeps this hope alive.

The first year has seen significant progress on several issues either directly or indirectly impacting business. Housing, workers’ compensation, procurement, insurance and supporting small business have all been issues that have been confronted head on.

Housing and planning reform has been welcomed by our members across the state. For a city and state to thrive, affordable housing must be close to jobs. Reforms around the workers’ compensation system have been a breath of fresh air for our members after years of dealing with premiums that have gone up exponentially and have put us in a much better position than other states in Australia.

There is still a lot to do, but we are keen to watch how the NSW Government will implement these policies in 2024 and beyond.

We also need fresh ideas to keep our state growing and improving. In our recent budget submission, we made 46 recommendations that could invigorate our state. Slashing payroll tax, fast-tracking changes to the Emergency Services Levy funding model, having a renewed focus on support for inbound investment and overseas trade; these things will all grow the prosperity of our state. Premier Chris Minns, Deputy Premier Prue Car, Treasurer Daniel Mookhey and their Cabinet colleagues need to continually challenge their departments and officials to seek new ideas.

For Australia to thrive, NSW needs to thrive. Recently, Business NSW and Business Hunter hosted a dinner with Prime Minister Anthony Albanese in Newcastle, where he spoke about the importance of the next decade for Australia. NSW needs to receive its fair share of federal resources – and GST revenue – if the federal government has a hope of delivering on the vision. One of the main reasons the event was held in the Hunter was that the NSW regions will help deliver the next decade of growth. Without the right investment and focus, however, we will miss this once in a lifetime opportunity. We need to ensure our regions are better connected to our main cities, whereby goods can easily flow to and from these areas.

The recent GST allocation again shows how far away the people and business owners of NSW are from receiving a fair share of the GST pie. Restoring GST distribution per capita would go a long way to bringing the state budget back into the black and allowing NSW to continue to invest in essential services like TAFE, hospitals and public safety. There is however more space for state-based tax reform. Stamp duty and payroll tax remain the two examples of outdated and inefficient taxes that require significant Federal cooperation and leadership from the states to be able to reform their tax base, thereby stimulating productivity across our economy.

Small to medium sized businesses are also facing significant headwinds created by the Federal Government’s industrial relations changes. These unabashedly pro-union reforms will make it harder for businesses to ramp up and ramp down as required, introducing a rigidity into the labour market unseen since the 1970s. After all the productivity reforms of Hawke, Keating and Howard – working with State Premiers Neville Wran, Nick Greiner and Victoria’s Jeff Kennett - we live in an era which is the antithesis of smart business practice and productivity improvements.

As we look to shape our state over the coming decade, productivity remains the overarching theme of all that we have been suggesting. Businesses need to be able to do business with less friction, residents should be able to afford a home near their place of work, insurance needs to not only be available but affordable. All these lead to significant productivity gains for our state.

The NSW Government knows that it is in a delicate position. Anything that increases businesses costs – especially in the context of stubbornly high interest rates – would be a disaster. The NSW Government has commendably cradled business in the past year. Businesses and the communities they serve must be given reason to hope. When business thrives we all thrive.

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