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Alex is committed to government transparency and accountability; protecting the natural and urban environments, open space and Sydney’s unique heritage; retaining inner city social and affordable housing; the humane treatment of animals; improving transport options; and fairness and equality for the LGBTI communities.
 

Small Business Grants Bill 2015

(Debate, 23 June 2015, Legislative Assembly, NSW Parliament)

The Small Business Grants (Employment Incentive) Bill establishes a new scheme that is aimed at encouraging new jobs in small businesses that are not subject to payroll tax and, therefore, are not eligible for the Payroll Tax Rebate Scheme. The Small Business Employment Incentive Scheme provides a $2,000 grant to small businesses that hire someone in a new position for 12 months full time, with pro-rata rates available for new part-time positions. Having worked in recruitment for many years, I have seen how employers take advantage of incentives and factor grants and tax concessions into their decisions to hire new staff. However, they will follow through and create new positions only if the incentives are worth the effort....

The need to create new jobs is real. Last week the Committee for Economic Development of Australia [CEDA] released its report "Australia's future workforce?", which predicts the potential disappearance of more than five million Australian jobs over the next 10 to 15 years as a result of technological advancements. That is about 40 per cent of jobs. The report highlights that jobs are rapidly being dissolved and replaced by automation. While this has traditionally occurred in manufacturing, agriculture and mining jobs, technological advancements are resulting in previously untouched jobs being affected, such as health sector jobs. Computerisation is extending into almost every aspect of life and this is where future jobs will be. If we do not embrace and grow the local digital economy, our economic and labour force future will be bleak.

The CEDA report identifies an urgent need to adapt to technological change and innovation to ensure future job opportunities. The report emphasises a need for governments to incentivise innovation and implement technological policies and education. A jobs action plan that fails to acknowledge the vital economic and workforce changes that are needed to support the digital revolution will provide only short-term jobs growth while failing to secure lasting opportunities. Indeed, the tough question about a bill such as the one before the House is whether we are potentially funding jobs that will become obsolete in a few years time over supporting digital and innovation entrepreneurship. Encouraging digital start-ups and entrepreneurs is vital.

I have consulted on this bill with a number of start-ups. While some say that any help with costs is appreciated, they point out that the $2,000 grant is not enough to change their behaviour and encourage them to employ new people. Some suspect that the paperwork required may make the effort not worthwhile. Entrepreneurs report that the rules around the grants do not cater for the start-up business sector. They say that 12 months can be too long a time frame in this industry and that start-ups generally outsource their jobs because a variety of skills are needed. But the Small Business Employment Incentive grant scheme does not recognise value in outsourcing consulting and contract work in the digital economy.

While start-ups in New South Wales mostly outsource within Australia, thereby creating local jobs, sometimes they cannot because the needed talent is not available locally. Australian technological companies and start-ups are reporting a chronic lack of local skilled graduates. If the Government is serious about securing future jobs growth, it will focus on addressing that shortfall. The Government should consider introducing payroll tax exemptions for technological employees that are similar to concessions offered for apprentices and trainees in order to improve the skills of the local workforce. We must implement the new Digital Technologies nationally developed curriculum, which teaches students specific information and communications technology [ICT] content, processes and skills such as the study of digital systems, representation of data and computational thinking in a project-based learning environment at school.

All other States have made some progress. Tasmania and the Australian Capital Territory have wholly adopted it. Queensland and Victoria will allow schools to elect to adopt it, with compulsory adoption down the line. Western Australia is writing support materials with a view to adoption in the near future. New South Wales is lagging behind and it will cost us jobs to other States. I understand many start-ups operate through trading trusts and fixed unit trusts in order to access various tax benefits but the New South Wales stamping fee for a trust after incorporation is more than double those of other States. This discourages entrepreneurs from basing their businesses in this State.

Fees need to correspond more with the States with which New South Wales competes. Some polices that help start-ups need greater publicity so that start-ups can take advantage of them. For example, stamp duty on the transfer of shares and units that currently encourages businesses to register in other States will be abolished in July next year. Because many companies and trusts incorporating now will be unlikely to transfer shares over the next 12 months, they can register their business in New South Wales now and still avoid the stamp duty. Many start-ups, accountants and lawyers are not aware of the expected changes and those changes need to be advertised in relevant industry publications and incorporation sites.

New South Wales Trade grants and services, such as the Innovate New South Wales grants, are not well known in the start-up business community and businesses do not take full advantage of them. Additional education and seminars, or even direct approaches to technological start-ups through business associations and specialist business communities like Fishburners, would be helpful. The Government must engage closely with the local start-up sector to establish what other support is needed to increase its global competitiveness and create new jobs. I acknowledge that both the Minister for Innovation and Better Regulation and the Minister for Small Business have visited Fishburners co-working start-up space in Ultimo. In the last Parliament, I proposed an inquiry into the digital economy. I believe we need to listen to the sector to ensure it has what it needs to grow and create jobs.

The digital revolution is changing the manner in which we do business and is creating a new economy based on ideas, intelligence and innovation. Sydney and New South Wales must become a digital innovation leader rather than rely on the traditional jobs of the past still being there in the future. It concerns me that in today's budget a massive tax cut has been given to the racing industry but provides little support for the start-up industry. I do not oppose the bill. However, it is an archaic approach to jobs growth that will do little to secure the long-term future employment opportunities in this State. I call on the Government to look to the future and increase its support to innovation, digital technology and entrepreneurship.

Read full debate HERE


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