Small Business

The major parties have lost touch with the needs of Australian entrepreneurs and small business owners. They are happy to hinder growth with red tape and unfair restrictions on new innovations.

Entrepreneurs must have freedom to flourish. Many new migrants with a limited knowledge of the English language get into business, and in many cases that will be because they simply aren’t aware of what is and what isn’t permitted – they just do.

We have the benefit of having centuries of history to see what works. With very few exceptions, when a nation has embraced a low-touch regulatory framework, the citizens flourish and the nation becomes strong.

In 2017 the Institute of Public Affairs (IPA) published a paper entitled Reducing Red Tape in Australia. The IPA found:

Red tape costs the Australian economy $176 billion, 11 per cent of GDP, each year in foregone economic output.
Between 2013 and 2017 the Liberal government added 107,885 pages of regulation!

Big business can cope with a regulatory burden, but it is often crippling for new and small businesses. The IPA found the share of national income accruing to family-run and small businesses had declined from 26% in 1960 to just 9% in 2019.

One in, two out. For every one new regulation issued, at least two prior regulations must be identified for elimination. This policy was effectively introduced in the United States in 2017.
Remove retail trading hour restrictions. Businesses should be able to determine their own opening hours without government interference.
Freeze and decentralise the minimum wage. The minimum wage is effectively a ban on employment for low-skill and entry-level workers, and directly causes unemployment. Based on analysis from Dr Andrew Leigh (now a Labor MP) the minimum wage is denying hundreds of thousands of people the chance to get a start in the workplace and the dignity that comes from having a job. Forbidding somebody from taking an $18/hr job and then giving them even less in welfare to do nothing is nonsensical. The most effective and efficient way to help low-income people is to ensure they aren't caught in the income tax system, and to drive productivity growth so that wages increase sustainably.

Australia currently has the highest minimum wage in the world, and this is particularly damaging for low skilled workers and small businesses. When minimum wages make unskilled labour too expensive, larger businesses can afford to replace workers with machines, while small businesses just have to do without. State governments should be given the power to set their own minimum wages, allowing competition between them to find a more appropriate rate.

Which country has the highest minimum wage?

Comparison data from the Wirtschafts- und Sozialwissenschaftliches Institut

Minimum wage chart

Relax occupational licensing and certification. Overzealous licensing requirements stifle the entrepreneurial spirit and impose costs on small businesses. Auctioneers, bar staff, casino workers, hairdressers etc. should not require licensing to operate.
Cut green tape. Environmental regulations are out of control and look set to worsen with insane “net-zero emissions” targets. These regulations not only directly harm those in the resources and energy sectors, they also drive up electricity costs for all small businesses. The Renewable Energy Target should be abolished, and all associated regulations scrapped.
Constrain the excess of government agencies. Agencies like the ATO and ASIC have become bloated, unaccountable and a major threat to small businesses. We believe their powers should be strictly limited.
Make it easier to start a business. Start-up firms must be allowed to issue shares in lieu of income if agreed to by both parties. Allow family micro-businesses the leeway to opt-out of most regulations until they've had the opportunity to establish themselves in the marketplace. This should be associated with clear signage so that consumers can make an informed decision.
Reform employment law. We’d make it easy and straightforward for small businesses to employ people under flexible agreements that work for employer & employee, and enable people to be safely terminated for misconduct or non-performance.

Financial Services

One of the most over-regulated sectors of the economy is financial services - home loans, insurance, personal investment, superannuation etc.

The orthodox view is that the Global Financial Crisis (GFC) of 2008 was caused by a lack of regulation. That is false. The GFC was the result of over-regulation that forced banks to approve home loans for borrowers who did not meet traditional banking standards. This, coupled with government guarantees and bailouts caused a moral hazard.

Despite the Liberal Party claiming to be the party of deregulation, we have seen an ever-increasing rise in financial regulations. This does very little good for consumers, but makes the process cumbersome and confusing, and adds cost and complexity to businesses providing these services.

The Libertarians support:

Consumers having the power to opt in or opt out of regulatory regimes. In many cases unregulated products will offer better value and quality as a trade-off for less protection. That risk assessment is one for individuals to make, not bureaucrats.
Removal of the implicit government guarantee of financial institutions. If a bank or insurance company collapses, the government should not use taxpayer funds to bail out bad management. Without a government guarantee, consumers will need to be prudent about who to invest in or borrow from. The existing government guarantees against failure have made our financial institutions less innovative.
Classifying cryptocurrency as a currency. Traders of traditional currencies do not have to pay capital gains tax (CGT) if the value of their holdings increases compared to the Australian Dollar, but as cryptocurrency is classified as an asset its traders are unfairly discriminated against.