Comment: Labor ministers collide on industry policy

Kim Carr and Craig Emerson are on a collision course. In the space of one week, the two new ministers for two vital portfolios are taking radically different courses which will affect industry policy, business owners and advisers.

This morning Minister for Small Business, Independent Contractors and the Service Economy, Craig Emerson, reiterated his policy position and intentions for the small and medium business sector in a comment piece in The Australian Financial Review.

It is a direction that was applauded in the AFR’s editorial, who congratulated Emerson for making “the right noises”.

The first point Emerson makes is to rebadge business owners as enterprise workers, because like employees, he says, they work hard and take substantial risks.

He then asks the question about what Government can do for business owners. Emerson does not bother with the usual rhetoric from a small business minister who traditionally takes on this potfolio and then announces they are travelling the country to ask business owners what they need.

Emerson has the answer less than two months into the job. In fact it is the same answer he gave before he had the job. Business just wants Government to get out of the way and let business do what it does best – create prosperity and jobs for families and nations, he says.

Emerson says the right response is “not to contemplate new forms of taxpayer-funded largess that Governments can bestow”.

Emerson then covers off the Labor agenda for small and medium business – cutting red tape, creating skills and improving infrastructure. Conveniently for Emerson, all these agendas are being run out of other portfolios.

So reading between the lines, Australia’s new Small Business Minister will not be pursuing any specific programs for small business, nor will he seek to address market gaps or assist entrepreneurs and business owners.

Meanwhile Kim Carr is taking a different approach. Earlier this week SmartCompany reported that the Rudd Government is set to announce a review of innovation policies that will look at the national innovation system, including the car industry and the textile, clothing and footwear industry.

Innovation Minister Carr is believed to be finalising the members of the reviews and terms of reference for the inquiries, which will also include a review of the Co-operative Research Centres, set up by a former Labor government in 1991. As part of the review, Labor will create a national system instead of the 169 separate state and federal policies.

This is taking a much more proactive approach to industry policy and appears to be a direct contradiction to Emerson’s “get out of the way” approach.

The danger of course is that the two ministers will head off in different directions at a time when Australia needs them to work together to create a new vision for an entrepreneurial, innovation system and urgently address the market failures and barriers holding us back.

What do SMEs need from government? Everybody wants less red tape but what about grants, incentives for innovation and tax breaks for growing industries? Should government intervene – or just get out of the way? Have your say. Email feedback@smartcompany.com.au