NAB senior leaders discuss the economy and why there’s good news ahead for business.
Talking to the deregulation plan for SMEs that NAB presented to the Federal Government in December, Angela Mentis, Group Executive Business Banking, explains why it's important to seize opportunities that can help Australian business develop new markets and create more jobs.
Angela Mentis is NAB’s Group Executive Business Banking.
As 2015 kicks into action, Australians everywhere are looking to the year ahead and the opportunities it presents. For some in Australia’s business community it is fair to say, however, that the opportunities of 2015 are yet to be clear. Despite business conditions improving from the lows of recent years, confidence has been trending lower since mid 2014.
But, at NAB, we are confident in the future of Australian business. There are many green shoots in our economy, and it is the job of business leaders like NAB to identify ways to support businesses to grow and succeed.
We can’t sit back and wait for confidence to turn a corner. We all need to take the lead in seizing opportunities to help business develop new markets and create more jobs.
In December 2014, we presented our deregulation plan for small and medium size enterprises to the Federal Government. With small business employing half of the Australian workforce and contributing nearly three in ten dollars earned by all businesses, they are indeed the ‘engine room’ of the national economy as described by politicians nationwide.
But with ACCI finding as far back as 2012 that more than half of Australian businesses sight regulatory requirements as preventing their business from growing, sensible deregulation is important if our economy is to continue to prosper.
Our plan advocates for governments at all levels to better understand the needs of the SME sector, to reduce the burden of regulation, review the remit and scope of regulators and also see a reduction in compliance costs and a review of taxes.
We believe small business deserves its own nationally mandated day to recognise their importance. A National Small Business Day can offer real and tangible benefits for small businesses and the economy. Small Business Saturday has existed in the United States since 2010, and has been warmly embraced by the American public. In 2012, an estimated $5.5 billion was registered in sales to independently owned small businesses on that day alone from the shopping activities of 70 million Americans.
Standard Business Reporting has been in place since 2010 and facilitates the direct reporting of information to the Federal Government via financial, accounting and payroll software. Despite being a time saver for small business and costing the Federal Government $170 million to develop, not enough government agencies use SBR, causing unnecessary headaches for a range of businesses.
An early show of faith by the Federal Government would be to make SBR mandatory amongst all government agencies, and to use COAG to encourage state and territory government agencies to do the same.
With some 1000 regulators at the federal, state and local level, there is also a case for better structured regulators. While it is encouraging that COAG agreed to look at their effectiveness in May 2014, the sheer number indicates a great opportunity to simplify the system.
While there is work for the governments to do, we recognise that the financial services industry has an important role to play as well in making it easier for SMEs.
As an industry, there is an opportunity for the banks and the ATO to work together to use current and emerging payments technology to eliminate the need for small businesses to lodge Business Activity Statements and income tax returns.
For example, a coffee shop’s business bank account could be configured so that all payments in and out were within the GST system. At the end of each day the bank would settle the coffee shop’s GST liability to the ATO on that day’s net takings (or process a refund from the ATO if for that day the coffee shop actually lost money). If a standard income tax rate also was to apply to the coffee shop then income tax could also be remitted on a daily basis (and conversely refunds if the trading day gave rise to a tax loss).
Obviously, there would be much detail to work through but the opportunity to effectively remove tax compliance obligations for small business is a significant prize to pursue.
The Federal Government could assist by sponsoring a working group, convened by the ATO and with representatives from the banking and payments industry, to consult and advise on the feasibility of using the existing and future payments system capability to lower the frequency or obviate the need for small businesses to individually lodge BAS and income tax returns.
NAB recognises that a lot of good work has been done in recent years to assist small business, including the Federal Government’s ‘repeal days’. The ATO themselves in 2014 introduced an ‘after hours call back’ service, allowing an online booking for a call back after hours to better suit the needs of small businesses. Initiatives such as this are welcomed and an acknowledgment of the significant time pressures small businesses often face.
As Australia’s largest business bank, and the bank of choice for small to medium enterprises, NAB is positive about the future of Australian business in 2015. But, we also recognise that business, particular the SME sector, needs champions to advocate on their behalf.
Our plan for deregulation in the SME sector offers practical and achievable solutions for governments to act on in 2015. If small business is to continue to be the ‘engine room’ of our economy, they deserve this support.
Learn more about NAB’s Deregulation Plan for Australian SMEs.
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