Former Assistant Treasurer Senator Nick Sherry has been handed the role of Small Business Minister in Julia Gillard’s new ministry, but the Opposition and business groups are unhappy that the post remains outside of Cabinet.
Sherry, who has been a senator for Tasmania since 1990 and is based in Devonport, declined to talk with SmartCompany today, with a spokesman saying Sherry is still getting across the various briefing documents for his new role.
Sherry previously served as minister for superannuation in the 2007 Rudd Government, before being promoted to Assistant Treasurer in June 2009.
In that role, Sherry was heavily involved in tax matters and his portfolio crossed over with the small business ministry in a number of areas, including crackdowns on phoenix companies and the introduction of ATO measures to help small businesses through the GFC with tax bill payment relief.
But Sherry was also heavily criticised by sections of the small business community for his threatened crackdown on independent contractors.
In December 2009, Sherry announced he would pass on to the Henry Tax Review controversial recommendations designed to prevent independent contractors dodging tax by working as “sham” contractors, when in fact they were basically employees.
“The use of sham contractors is a threat to the integrity of the taxation system and a threat to working conditions of employees – and the Rudd Government is determined to see an end to its inappropriate use,” Sherry said at the time.
The issue was never raised in the Government’s response to the Henry Tax Review, but the Opposition has not let Sherry – a former state secretary of the Liquor and Allied Trade Union – forget the comment.
Opposition small business spokesman Bruce Billson has accused Sherry of having “prepared and promoted a stealth strategy to force up their tax burden and make them more like ’employees.’”
“The small business community has been particularly unhappy with his performance in his previous role, so this seems an odd fit,” Billson told SmartCompany today.
Council of Small Business of Australia Peter Strong says he does not know much about Sherry and has requested a meeting. However, he remains upset that Labor has not matched the Coalition’s promise to put small business in Cabinet.
“We’ve been saying that we want a small business minister in cabinet for the past two decades. Small businesses represent 96% of all firms, the argument goes on and on,” he told StartupSmart.
“What underpins it all is that small businesses are people. They are treated as small versions of big companies, which is palpably not true. We want protection in areas such as contracts – that is the number one priority for the new minister. Number two is getting an ombudsman for small businesses.”
As Sherry gets across his special briefing paper, we’d thought we would help out with a briefing of our own, looking at some of the top priorities for the incoming minister:
Former Small Business Minister Craig Emerson did not consider SME access to finance to be a big problem, but any accountant will be able to tell Sherry how much their clients are hurting. Any constructive idea needs to be examined, including the creation of a development bank, special guarantees for SME loans, changes to banking laws to make it more attractive for banks to lend to SMEs where property is provided as security (a Coalition idea) and even a new code of conduct.
Governments have a habit of changing business support programs every time they get power – the Howard Government did it, and so did the Rudd Government. Often these changes amount to little more than rebranding exercises, but it always robs good programs of momentum. Sherry needs to do more to promote existing programs like Enterprise Connect (the consensus is that is quite good, but not well known) and look at more programs to support fast growing tech companies.
With the banks not lending, the pressure on venture capital and private equity funds has continued to increase. Sherry is well placed to look at ways to encourage funds back into the market.
Both sides have promised to leave the IR system alone, but it needs tweaking. Sherry should be prepared to get involved with ensuring the views of SMEs are fed into this process.
Sherry did some good work as Assistant Treasurer in reducing red tape in areas such as business restructures and consolidation. His experience means he knows where the red tape issues are – now he needs to really go after them.
Another area where Sherry has lots of experience and a real chance to help SMEs further. Labor has some good policies to introduce in the area of tax reform for small business, including immediate tax write-offs for assets up to $5,000, but Sherry needs to get heavily involved in the upcoming tax summit and push for more changes.
Neither party went to the election with fresh ideas for helping SMEs innovate and grow, so this remains an area where Sherry can push for change.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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