NZ waits while Australia acts on small business laws

By GREG ANSLEY AND KEVIN TAYLOR

As New Zealand businesses wait for Prime Minister Helen Clark to reveal the Government's "innovation strategy" today, the Australians are preparing a host of changes to boost small and medium-sized enterprises.

Australian Prime Minister John Howard will kick off his third term in office this week with the first shots in a campaign to unshackle small business from key industrial law and cut red-tape binding the sector that provides 80 per cent of the country's employment growth.

The moves are being looked at with envy from this side of the Tasman.

Michael Barnett, Auckland Chamber of Commerce chief executive, said the Australian campaign was a warning from another economy about how governments can be innovative for small and medium business.

"They are actually doing something - it's about action.

"It's not about talking at the top end of the market," he said, referring to New Zealand events such as last year's Knowledge Wave conference.

Helen Clark will today outline an innovation framework in her speech opening the new parliamentary year.

But it will be only a framework for policy and will not include any dollar amounts.

In Australia, Employment Minister Tony Abbott is to introduce legislation exempting small businesses from unfair-dismissal laws and giving them the right to restrict union entry to their premises.

Other proposed legislation would allow secret union ballots and restrict compulsory union fees.

Outside industrial relations, Mr Howard intends boosting small business through streamlined tax and regulatory reporting, new access to government procurement and assistance programmes and direct access to senior ministers.

Mr Barnett said removing the fear that small Kiwi businesses had of unfair-dismissal cases would result in more jobs here.

While he accepted the view of unions, he said small and medium enterprises were critical of present employment rules and the difficulties they faced in dismissal situations.

Mr Barnett also looked favourably at Australia's plan to streamline tax and regulatory reporting for small business.

"This has been spoken about here in New Zealand and all we have managed to do with successive committees is tinker, whereas the Australian Government is right upfront and it's doing something."

Business New Zealand executive director Anne Knowles said New Zealand should look hard at the Australian move to cut red tape.

She warned that the Australian Workplace Relations Amendment Bill, which would get rid of major problems facing Australian employers, would also give them a competitive advantage over their New Zealand counterparts.

The bill would provide for new employees to have a three-month probationary period, during which they would not be covered by unfair-dismissal laws.

Ms Knowles said it was a realistic proposal that maintained protection for established employees while curtailing the ability to take advantage of the system.

She said that requirements on employers relating to dismissal were unnecessarily complex in both countries.

Employers had to follow complicated procedures, and if they got just one procedural step wrong, they could face compensation orders large enough to bankrupt their business.

Mr Howard targeted small business heavily during last year's election campaign.

The first stage in his small business legislative package will be Mr Abbott's amendments to industrial reforms, stopped in their tracks during the Government's previous term by Labor and Democrat opposition in the Senate.

Although yet to be tested, the political climate is unlikely to be much warmer in an Upper House still effectively controlled by the two rival parties, both of which have new leaders desperate to cement their positions.

The position they now take will be crucial for Mr Abbott's workplace reforms, the centrepiece of the small business package.

Under his proposals, businesses with fewer than 20 employees would be exempted from unfair dismissal claims, new restrictions would be imposed on unwanted union entry to the workplace, and new emphasis would be given to the sector's needs in reform of the Industrial Relations Commission.

The Government also intends strengthening the Trade Practices Act to allow the Australian Competition and Consumer Commission to bring representative actions for small businesses affected by secondary boycotts.

Elsewhere, Mr Howard intends a $A3 million ($3.65 million) programme to merge the reporting systems of the Tax Office and the Australian Securities and Investment Commission (Asic) into a single streamlined process.

Annual Asic returns will be abolished, document loading requirements will be overhauled, and Asic fees for proprietary companies will be capped at $A200 a year for three years.

The electronic Isonet procurement system - which enables companies to push their products to government buyers and bid for major federal contracts - will be upgraded to improve access for small business, and authentication systems will be overhauled.

The Government also intends extending an existing $A6 million pilot programme to provide small business with direct access to federal programmes and to improve other on-line access.

$A34 million will be provided to pay for small business incubators.

Politically, Mr Howard promises small business greater access to the Government through the national Small Business Forum and meetings between ministers and small-business operators.