Today I plead with the Scott Morrison, Josh Frydenberg, Michaelia Cash and Karen Andrews: We have two large groups of forgotten people, self-employed and research and development groups, and they need your help. Right now, a self-employed person gets no help for their business and must join the Centrelink queue for money.
It’s the law of the jungle out there and small businesses, including the self-employed are refusing to pay each other while many large enterprises keep “losing invoices”. Right now, it is cash before delivery and for those who can’t pay, underworld-style threats and actions will soon break out.
In research and development, there is as incredible mess and unless industry minister Karen Andrews personally intervenes we will come out of the virus crisis with a destroyed R&D sector.
As I will explain, in most areas we are looking at events that could never been foreseen. But the destruction of our research and development could have been predicted and is set to become the personal legacy of Karen Andrews.
In the US, President Trump realised that the self-employed needed help and his measures will keep that sector intact. In the UK on Thursday night, Prime Minister Boris Johnson announced his government will pay self-employed people a taxable grant of 80 per cent of their average monthly profits over the last three years. The grant will be open to people with trading profits of up to £50,000, or just under $100,000. Last week, the UK said it would pay up to 80 per cent of the wages (to a maximum of £2,500 a month) of workers kept on by employers in a bid to prevent redundancies in measures akin to the US.
We are way behind the US and the UK so the long term damage to our small business sector will be greater. And because small businesses are the major employers we will suffer longer term higher unemployment. But for the self-employed it will be devastating.
Let’s say I operate a coffee bar and employ two or three people. I receive PAYG relief. If I stand them down because I can no longer afford them but want to continue the business by working as self-employed (looking forward to the day when I can re-employ the workers) my business gets no help although there maybe rent assistance in the future.
There are at least 1.3m self-employed businesses in Australia which do not employ people. They make up a significant portion of the small business community. Self-employed people usually work in networks and contract with each other to provide goods and services. In the US, they have driven.
In Australia, Treasury and the Australian Taxation Office have made their lives difficult, which has been a major contributor to our low productivity. We need to think seriously about our level of help to Australia’s employment powerhouse small enterprises, but whatever help we give to small enterprises must be extended to the self-employed.
R&D mess
Karen Andrews’ actual title is Minister for Industry, Science and Technology, which encompasses the AusIndustry operation.
Long before the current crisis, research help in Australia was in a total mess because of conflicts between AusIndustry and the ATO.
A major problem area is that much of Australia’s research these days centres around software. And that work extends into a vast areas of medical and product development. The ATO and AusIndustry live in the past and no one knows what the tech research rules are.
In this crisis we must abandon the public service games. Andrews can fix the tech research mess overnight. AusIndustry are also still playing silly public service games with researchers and holding up claims over minor matters to delay payments, which is causing top technology talent to be retrenched. And again, that’s the direct personal responsibility of the minster. Fix it: we are in a crisis.
On the second front the minister will need to go to Josh Frydenberg. To protect at least a core of our research and development expertise, we need to bring forward the next set of research and development grants to help enterprises get through the current cash crisis and reduce labour shedding. Karen Andrews is a skilled minister. I am confident that once she understands what is actually happening she will act in the national interest.
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