It’s Christmas morning for SMEs: Labor will no longer make small businesses administer parental leave, superannuation payments

Small business has become a major focus of the election campaign, with Prime Minister Kevin Rudd answering the prayers of business owners by announcing a suite of red tape cuts – including changes to parental leave payments.

Businesses with fewer than 20 employees will no longer have to administer parental leave payments under a Labor government, while a pledge has also been made to relieve small businesses of administering superannuation payments.

The employee cap for accessing the Superannuation Clearing House, which administers super payments for companies instead of having to do it themselves, will be raised from 20 employees to 100.

The parental leave payment changes will begin from September 30 and Centrelink will take over all payment responsibility.

Both announcements are huge wins for the small business community; lobby groups have been pressuring the government to make changes to these programs for years.

Relieving small businesses of the administrative burden will also improve productivity, advocates argue.

Peter Strong, executive director of the Council of Small Business of Australia, says the announcements show a priority on small business “like never before”.

“Four years ago…this wasn’t an issue. But we’ve been banging on about it, and with the economy the way it is, we’ve seen more action,” he says.

“I’ve had very senior public servants say to me there has to be something done about all of this.”

The Australian Chamber of Commerce and Industry expressed a similar sentiment, saying that while it wishes all businesses could have payments administered by the government instead of just companies with fewer than 20 employees, the decision is a “step forward”.

“This week has delivered…a sensible bidding war between the government and Coalition on pro-small business policy,” chief executive Peter Anderson said in a statement.

The Coalition is sceptical about Labor’s announcement. Opposition small business spokesman Bruce Billson said in a statement the announcements come after the government denied the same initiatives on the floor of Parliament.

“The Coalition has released a comprehensive policy with more than 20 measures and the best Labor can do is photocopy a couple of ideas and pass them off as their own,” he said.

The Coalition has already promised to relieve businesses of having to make parental leave payments.

Peter Strong says no matter what, the announcement is a win given both parties have pledged to relieve business of paymaster duty – he says the election is good news for small business overall.

“There is a good feeling out there among small business,” he says. “I’m expecting more announcements from Labor, I don’t think they’re doing just one-off business policies.”

In a statement yesterday, Labor said the move will “slash red tape and compliance tape costs”.