What SMEs and startups can expect after Labor’s election victory
For the first time in nine years, Australia will start its week with a federal Labor government.
Although still early, here’s what the small business and startup sector can expect from Anthony Albanese’s government in the coming weeks.
What does the Albanian government intend to do?
The final count is not yet determined — and Albanese has yet to be sworn in as Prime Minister — but his Saturday night victory speech outlined how his government could operate in its early days.
The climate at the center of concerns
After confirming that his government would adopt the Declaration of Uluru from the Heart in full, Albanese said his party would seize “the opportunity to shape change, rather than be shaped by it”.
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Unsurprisingly, this commitment has translated into a broad interpretation of the Labor Party’s climate platform.
Following what has been described as Australia’s climate election, in which once secure Liberal Party seats fell to environmentally conscious independents, Albanese said: “Together we can enjoy Australia’s opportunity to be a renewable energy superpower”.
Climate-backed policies with a potential effect on small businesses include Labor’s electric car rebate policy, which is expected to cost $54.3 million in 2022-23.
Labor has also pledged to invest $20 billion to revamp the power grid, enabling more renewable electricity generation to power homes and businesses. He claims the ‘Powering Australia’ program will create more than 600,000 jobs.
These promises won’t be realized overnight – but from day one, an emissions-focused crossbench is sure to push Labor on its climate demands; a policy direction that will inevitably affect the small business and startup sector.
Business and Labor Union Summit
Albanese’s climate talk then morphed into more traditional ALP fare.
“Together we can work in the common interest with business and unions to boost productivity, raise wages and profits,” he said.
This follows Albanese’s pledge to call a meeting of employers and unions during his first 100 days as prime minister.
This gathering will inform the Labor government’s ‘white paper’ on jobs, a document likely to articulate the new government’s approach to the gig economy and precarious work.
Although he thanked “members of the mighty labor movement,” Albanese did not specifically mention small business or the startup scene in his victory speech.
However, the work possesses pledged to push for lower-cost routing, lower merchant fees for merchants, and limit its bill payment terms to 30 days, proving certainty to SMBs managing government contracts.
Ahead of the election, the ALP also promised to standardize the types of business support programs available to SMEs after a disaster, reworking the network of payments currently available to hard-hit businesses.
Salaries, rights in the foreground
With victory now in sight, Albanese also reflected on his campaign claim that Labor would support a minimum wage increase of at least 5.1%, in line with headline inflation.
“If the Fair Work Commission does not reduce the wages of minimum age workers, we can say that we absolutely welcome it,” he said.
Any changes to the minimum wage would come into force on July 1, giving Labor a relatively short time to finalize its position on a wage hike.
Other labor rights are also on the labor mind, with implications for the small business and startup scene.
Albanese has pledged to ‘protect’ universal retirement, move forward with its multi-billion dollar universal childcare program and help make ‘equal opportunity for women a priority’ national economic and social.
Beyond Albanese’s speech, the new federal treasurer – all but certainly Jim Chalmers – will present Labor’s economic outlook paper in June.
This document will be based on the party’s federal budget response and the policy costing document submitted days before the election.
Beyond Albanese’s talk, a new government means a new approach to grants for small businesses and startups.
In its policy costs, Labor said it would invest $1.7 million in the financial year 2022-23 in its Startup Year scheme, an initiative offering income-linked loans to entrepreneurs operating under government-approved acceleration programs.
Seed-year funding will increase each year to $5 million in 2025-26, Labor said, eventually providing financial support to 2,000 final-year and early-career entrepreneurs.
Local Labor Industry Grants are expected to provide $87.1 million in funding over the 2022-2023 period.
The Albanian government has also committed to reducing the pool of uncommitted funding through the Entrepreneurs program by almost $200 million by 2025-206.
Who is stepping up?
Before the Labor Party enacts its plans for Australia’s small business and startup sector, it must confirm its A-team roster.
As above, Chalmers is set to retire Shadow Treasurer’s “Shadow”, replacing outgoing Josh Frydenberg.
While the Labor Party campaign highlighted precarious employment as a major issue, Chalmers took a welcoming approach to the corporate sector during the campaign.
“You know, we want to be a pro-business, pro-employer Labor Party,” Chalmers said during a question-and-answer session after a May speech at the National Press Club.
Meanwhile, Senator Katy Gallagher appears as Labor Finance Minister.
Richard Marles, Labor deputy leader and shadow minister for National Reconstruction, Jobs, Skills and Small Business, could succeed Stuart Robert in the portfolio.
Likewise, Shadow Industrial Relations Minister Tony Burke and Shadow Industry and Innovation Minister Ed Husic are likely to retain those roles in government.
Albanese, Chalmers, Gallagher and Marles will be sworn in by Governor-General David Hurley today, ahead of Albanese’s first high-level event as Prime Minister: a quadruple meeting with US President Joe Biden, Japanese Prime Minister Fumio Kishida and the Indian Prime Minister. Minister Nahendra Modi on May 24.
Penny Wong, slated to become foreign minister, will join Albanese for the Tokyo meeting.
What challenges do they face?
The honeymoon won’t last long: Labor inherited an Australian economy that’s far stronger than many expected in the depths of COVID-19 lockdowns, but runaway inflation is now magnifying the cost of life.
Get to work immediately. Briefed at his home in Logan by the Secretary of the Treasury, discussing the substantial economic and fiscal challenges our new government inherits. #auspol #ausecon pic.twitter.com/00ygno68en
— Congressman Jim Chalmers (@JEChalmers) May 22, 2022
Another conundrum awaits in September, when the six-month elimination of excise duty on fuel, introduced by the Morrison government, comes to an end.
While repealing the measure may make sense from a fiscal perspective, it will still serve as a de facto price hike for motorists and small businesses.
The Reserve Bank of Australia is also raising interest rates to fight inflation.
While it was the Coalition that faced the first official cash rate hike in more than a decade, the Albanian government can expect more in the weeks and months to come, increasing loan repayments for homeowners and businesses nationwide.
Labor shortages continue to hamper key sectors, including the tech industry, construction and hospitality. But Labour’s ambitious skills plan, based on 465,000 free TAFE places and an expansion of university places, will take years to produce the next generation of skilled workers.