ELECTION 2010: The 10 big issues for business

We’re less than three days into the 2010 Federal Election campaign but business voters are already seeing some big differences emerging between Labor and the Coalition.

While both parties are trying to play down the possibility of further changes in the area of industrial relations, clear battlelines are being drawn in areas such as infrastructure (Labor is vowing to push ahead with the NBN, while Tony Abbott says he will abandon it), climate change (Labor’s policy is still under development, Abbott says he will not put an emissions trading scheme in place) and of course, the mining tax.

Tony Abbott is promising voters a period of stability, while Prime Minister Julia Gillard has vowed to keep “moving forward” with a focus on the economy and sustainable population growth.

But will their pitches be enough to be win over business voters? Let’s look at the big issues for business in the 2010 poll.

Economy

Labor and the Coalition will both lean heavily on their economic credentials during this campaign, with Labor pointing to its success in steering Australia through the GFC and the Coalition leaning on its record during the Howard years.

However, it remains unclear whether we will see either party push for large-scale economic reform, such as big changes in areas like tax or even welfare spending. That’s probably fair enough, given that we face a period of some economic uncertainty, with the outlooks for the key economies of China and the United States still somewhat uncertain. Australia remains in good shape economically, with solid growth and relatively low debt, and both parties will want to continue this.

Abbott has already promised to keep interest rates lower if he wins power, although exactly how he plans to do this isn’t clear at this stage.

Industrial relations

While IR is typically a big battle ground between Labor and the Coalition, it appears it will be a non-event this year, with Abbott promising not to make changes to the Government’s Fair Work regime in his first term in office.

However, this is unlikely to sit well with business groups, who want to see “tweaking” in areas such as unfair dismissal protections, individual flexibility arrangements and “transfer of business” arrangements.

Will the Coalition agree to this tweaking? It would certainly help it win over entrepreneurs, but it will also leave the Liberals open to attacks over the spectre of WorkChoices.

Infrastructure

Expect both parties to make big promises on infrastructure, particularly in the areas of roads, rail, ports and land use, with regional areas likely to be big beneficiaries.

However, the Opposition’s promise to abandon the NBN issue is likely to be a big sticking point. This project has been welcomed almost unanimously by business, despite concerns about its cost and the potential for other technologies to make it somewhat redundant.

Abbott may need to articulate a clear alternative to the NBN to keep the faith with business.

Skills

With business already facing skills shortages, big new investments in skills and education are vital. Labor’s promise to build 2,650 trade centres has been a failure, with only one centre actually up and running. Some bold new initiatives in this area are desperately needed from both sides.

Population

The debates about border security and population growth might be high on the agenda for many voters, but business voters will want to be assured that they will still be able to tap into skilled migrant workers to fill growing skills shortages. As the global war for talent intensifies, Australia needs to be able to hold its own.

Red tape

A perennial problem that both parties will almost certainly promise to solve, and probably won’t get too far. The Government’s standard business reporting initiative, which got under way on July 1, appears to be a step in the right direction in that it aims to reduce regulation across state and federal jurisdictions. More of the same, please.

Innovation

The Government’s performance in the area of innovation has been pretty unimpressive, despite producing a few very big reports on the subject. After slashing the Commercial Ready scheme in 2008, it set up the Commercialisation Australia program but failed in a bid for reform of the R&D tax incentive scheme, when its tax credit plan failed to pass through the Senate. Innovation Minister Kim Carr’s vow to make the scheme retrospective if Labor wins power has created some worrying uncertainty that Labor needs to clear up quickly.

In addition, business will be looking to both parties for more policy initiatives in the area of innovation, particularly around government support for fast-growth SMEs.

Tax

With the much-hyped Henry Review turning into a bit of a fizzer outside the mining sector, business shouldn’t be expecting too much in the way of tax reform, although Labor will at least reduce the company tax rate from 30% to 29% from 2012. Abbott has vowed to block the mining tax and therefore the company tax cut, but it remains to be seen whether he will have come up with an alternative policy.

Personal income tax cuts look unlikely at this early stage, although they are probably more likely than the one thing that would instantly win over business voters – action on payroll tax.

The party that commits to working with the states on this will win plenty of supporters.

Government assistance

Businesses will welcome any new grants schemes or government assistance programs, but they will also be keen to see that current programs are maintained. Of particular importance is the Export Market Development Grant scheme; business wants to see funding increased from $150 million to at least $200 million, due to the high level of demand.

Given the fact we need to encourage a much higher level of exporting among SMEs, this would be money well spent.

Representation

The Coalition’s plan to create a Small Business Ombudsman is an interesting one and could really give small business another strong voice in Canberra. It will be interesting to see how Labor reacts to this plan during the campaign, and whether it also follows the Coalition’s promise to put the Small Business Minster in Cabinet.