Between a small business rock and a union hard place

Anthony Albanese and Workplace Relations Minister Tony Burke confer during question time in Canberra on Tuesday. Picture: AAP

Anthony Albanese is not contemplating defeat on his industrial reforms, however untidy the process is appearing.

There is also a resignation within the business community and even within opposition ranks that one way or another, the government is likely to get it done.

The question is in what format and after what further concessions the Prime Minister is prepared to make, as he now finds himself caught between small business and Labor’s union activist base.

These will be the most significant workplace reforms for decades.

Critically, it has become a drive to redefine what constitutes a small business in an industrial landscape amid a Labor-brokered attempt to drive union membership.

The consequences could be profound and go beyond just this bill, potentially to other instruments in the Fair Work Act.

And many small businesses are just now waking up to the fact they may be captured by all this.

The Pottinger review of 2020 revealed that across all government departments, there were 140 different definitions of a small business.

For the purpose of the banking code of conduct, the definition of a small business was raised from annual turnover of $3m to $5m.

The Australian Securities & Investments Commission also changed its definition around the same time, lowering the revenue threshold of $50m a year for a “large business” to $25m.

It also dropped the number of employees from 100 to 50.

The Australian Taxation Office has yet another definition – annual turnover of less than $10m for a small business.

When the Coalition last introduced its company tax cuts, it applied a $50m threshold.

There is a lower figure used to qualify for deductions such as the instant asset write-off and yet another threshold for other tax concessions.

The Privacy Act has its own class, providing exemptions for small businesses as defined by those with turnovers of less than $3m.

The rushed Senate committee report recommended lifting the definition of small business from the current 15 employees in the bill to 20.

The Coalition wants it set at 200 – in line with the definition used in the US.

The Council of Small Business Organisations of Australia, which had initially signed up to the elements of the reforms before realising the consequences, wants the definition for the purposes of industrial relations set at 100 employees.

This reflects the impossibility in trying to find a homogenous definition that could adequately reflect what it means to be a small business.

Any political settlement on what the threshold number should be needs to take into account all the practical consequences.