Govt warns on faltering income growth

The Federal Minister for Small Business, Dr Craig Emerson, has warned that the combination of Australia’s “faltering national productivity” and its ageing population could lead to two decades of the slowest rate of income growth per person since the Great Depression.

“After hitting record highs in the late 1990s, productivity growth has slid away since the early 2000s. Productivity growth in 2007 was zero, flat,” Emerson said.

“By 2010 onwards we could be getting hit by the nasty combination of an ageing population and faltering productivity growth,” he said.

Speaking at the Financial Planning Association’s (FPA) inaugural Small Principals’ Conference in Canberra, Emerson also discussed the challenges facing small businesses and the Government’s efforts to reduce regulatory and compliance costs.

The minister said he understands the need for small business to “take risks and enjoy success without the Government getting in the way” with excessive compliance and regulation requirements.

Emerson spoke of the “strength of commitment” of those in the Future of the Economy stream at the recent 2020 Summit to achieve “a seamless economy and a single national market”, allowing businesses to more easily operate across the states and territories.

According to Emerson, the Productivity Commission has found that Australia’s compliance burden equates to a cost of 4 per cent of gross domestic product per year, with Emerson noting “today’s productivity growth is tomorrow’s prosperity”.

Emerson spoke of business reforms currently underway, including the introduction of standardised business reporting, and said he understood the frustration of business owners being required to report to numerous regulatory entities, including the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, the Australian Taxation Office and the Commonwealth, calling this system “an absolute maze”.

Reforms to the current system will result in a single national entry point for business reporting information, with the information then distributed to the relevant entities in the federal and state systems. Emerson said a standardised business reporting system could be in place by mid-2009 or by the end of 2010.

Reforms to the process for registering for Australian Business Numbers and business names are also underway, with a national register in the pipeline.

“These reforms will be valuable for small business,” Emerson said.

During an open floor discussion, Emerson did not rule out the possibility of a national register for real estate agents.

The minister also touched on the recent amendments to the Trade Practices Act, anti-money laundering provisions and the regulatory burdens it places on small business and the need to ‘slash’ lengthy disclosure documents.