The problem with Abbott’s small business promise

Tony Abbott was preaching to the converted at the Menzies Research Centre Small Business Round Table hosted by CPA Australia yesterday morning.

He entered the room to a spontaneous round of applause and got an enthusiastic reaction to his pledge to double the existing annual rate of small business growth to 1.5% if elected.

“There is no reason, no reason whatsoever, why we should not be able to achieve an annual growth rate in the number of small business of 1.5%,” Abbott told the round table.

“This is what the Howard government was achieving but unfortunately the Labor government has not come close.”

While it was good to see a political leader paying some attention to small business, Abbott’s talk was sadly long on rhetoric and short on detail.

Abbott did not seem to take into account the vastly different economic circumstances that existed in the Howard era.

Australia and the world is a much different place now.

The Leader of the Opposition wouldn’t take any questions from journalists on how exactly he is going to go about doubling small business growth and left the round table shortly after his speech.

Once Abbott had departed I asked shadow small business minister Bruce Billson if he could elaborate on how a Coalition government would achieve the lofty ambition set out by Abbott in his own speech which followed.

Billson told the round table there was still work to be done and admitted there was “no silver bullet” for small business.

He could only point to the Coalition’s 10-point plan to support small business, a plan that has already been released.

The plan includes pledges to rescind the carbon tax, appoint a small business ombudsman, extend unfair contract provisions to small business and to cut $1 billion dollars of red tape.

However, so far, the 10-point plan does not include any costed policies that address the broader macroeconomic issues that have sucker-punched small businesses.

Abbott says “the small businesses of our country are being suffocated” and Billson describes small business as “under siege”.

Both Abbott and Billson’s concern for small businesses starting out is laudable but doubling the rate of small business growth won’t be worth the paper the policy is written on if those small businesses are forced to fold as soon as they start.

We need to make sure new small businesses are well planned, well run and sustainable.

What’s more, it’s important not to forget the already existing small businesses that need help.

It might be wise to hold back on the spontaneous applause until there’s some more detail behind Abbott’s ambitions for small businesses.