John Durie: Economic challenges remain, but Albanese’s new government could make life simpler for small business

As dramatic as election night proved to be, the reality facing business today starts with an economy tipped to slow by 50%, rising interest rates and continued chronic labour and skill shortages.

The government has changed but the challenges facing small business have not.

NAB is tipping GDP growth to half from 4% this calendar year to 2% in 2023, as global interest rates rise to counter price rises and the chronic impact of COVID-19 continues to ravage business looking for staff.     

The political revolution evident through a swag of minorities potentially holding the balance of power offers hope and the clear message is the electorate wants and needs action, not talk.

The upside is the hope that comes from a new broom through Canberra.

For small business, this means making life simpler, cutting hurdles to getting the job done, more immigration, better skills training, and backing least cost routing to cut consumer costs in retail.

Climate change and more support for women were clear election winners, so expect an Albanese government to deliver on these two, including extending child care support measures to help manage family budgets and an immediate review of the carbon offsets market to see what improvements can be made to help drive down emission levels.

In the final days of the campaign, the ALP released its competition policy, which received minimal attention but will deliver on long sought after reforms, including a new law banning unfair contract terms.

The new laws will cover contracts up to $2 million, up from the present $200,000 limit, but the key change will be allowing courts to impose civil penalties against big companies that impose harsh contract terms.

The present law simply voids the term of the contract in question, allowing the other terms of the potentially heinous contract to continue.

Small businesses can face contracts for essential inputs, which mean prices can be unilaterally increased mid-contract, or which see automatic contract extensions coupled with punitive termination provisions.

These will be prohibited in the new laws, which will also include a five fold increase in penalties for competition breaches.

The new policies will also include better access to lodge complaints through a so-called “super complaints” pathway to ensure competition and consumer law breaches are heard.

While this may be dismissed as more bureaucracy, the good news is under an ALP-led government the sweeping merger reforms urged by outgoing Australian Competition and Consumer (ACCC) boss Rod Sims will get a better hearing.

Sims and likely-assistant treasurer Andrew Leigh have banged the drum about the problems with an economy that is too concentrated in the hands of a handful of big businesses.

Small business just wants to play on a flat track with minimal bumps to jump over.

An overly concentrated economy raises competition barriers, reducing the incentive to create new products and to invest.   

Former treasurer Josh Frydenberg appointed Gina Cass-Gottlieb to head the ACCC and while known as a big business lawyer, she also comes from an ALP background; her uncle, the late Moss Cass, was an environment minister in the Whitlam government and her mother Bettina wrote the seminal social policy document for the same administration.

It will take some time to know the final makeup of the new government while final votes are counted  and while such uncertainty is bad for business, the key themes are clear.

For business the message remains: it’s the economy stupid.