Small Business: Saintly and Ascetic?

In the wake of the Commonwealth government’s decision to not provide $25 million to Coca-Cola Amatil to revamp the SPC canning facility in rural Victoria, a particular sort of argument about small business seems to have gained currency.

“If a small business person runs their business badly, they personally suffer… Coca-Cola wants the taxes of small business people to subsidise their business failure.” Ken Phillips argued in the Australian this week.

On ABC TV’s Q&A, Yolanda Vega said this:

“We seem to keep making the same mistakes. There’s these massive businesses that keep getting bailed out, and yet the small business of Australia which make up 96 per cent – are completely ignored.”

Among the people apparently so busy ignoring small business are Commonwealth Minister for Small Business Bruce BillsonVictorian Minister for Small Business Louise Asher, NSW Minister for Small Business Katrina HodgkinsonWA Minister for Small Business Joe FrancisSA Minister for Small Business Tom Kenyon, and Queensland Minister for Small Business Jann Stuckey, not to mention an array of shadow ministers and small business commissioners.

The tax on interrogative punctuation hits yet another local enterprise

Governments want to help small businesses so much it hurts, even if they don’t always know how…

Victoria has a small business commissioner, promising help in creating a fair and competitive environment; and another entity called Small Business Victoria. The state puts on a small business festival; small business workshops and seminars; not to mention providing help for small businesses through Regional Development Victoria.

When Yolanda Vega said small businesses were “completely ignored,” she obviously hadn’t seen this recent press release from Victorian Small Business Minister Peter Crisp, where the government committed to buying in consultants for 500 Victorian businesses. 

As the source who brought this to my attention says, “What a joke.” This “scattering bread to the pigeons” approach to business welfare is uniquely formulated in terms of its capacity to not be helpful in any strategic sense.

The State government also spent $70,000 recently on a study tour of Europe, designed to figure out the smart ways to support small businesses. (Manchester, London, Amsterdam, Berlin – at least it wasn’t Cannes, Monaco, Sorrento, Santorini).

Small business policy is wigging out

The federal government doesn’t want to be left behind either. Competition laws are being shaped to give small business a better run, and the government is funding a superannuation clearing house to reduce compliance costs for businesses with less than 20 staff. The ATO has recently launched an app for small businesses too.

I crossed paths with Small Business Minister Bruce Billson at a Real Estate agent in suburban Carnegie late last year. He was eager to cast everything the Abbott Government was doing, including removing the carbon tax, as a response to the needs of small business.

Small business account for ten percent of the tax take, but more than that in terms of votes. The idea they play under the same rules and fight on the exact same terms as big business is untrue.

No business is easy, but no business should be easy. Competitive markets should have business owners – whether they are shareholders in a major miner or baristas at a minor cafe – worried about the medium term future and working hard to secure it.

The help big business gets might be news-worthy and include big dollar figures, but the narrative that only small business represents some sort of Ayn Randian ideal of free enterprise should be quashed.

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Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

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