CPA Warns Red Tape a ‘Straitjacket’ on the Economy in Response to Labor’s Small Business Plan

Federal Labor Treasurer Jim Chalmers speaks to the media during a press conference at the Commonwealth Parliamentary Offices in Brisbane, Australia on Sept. 25, 2024. AAP Image/Darren England

Labor’s National Small Business Strategy, released on Feb. 3, lays out a broad vision for supporting small businesses but has been criticised for lacking major reforms.

Spanning more than 60 pages, the strategy focuses on collaboration across jurisdictions, streamlining support, and reducing regulatory burdens.

While the document offers a lot of figures and data on the small business environment, it did not offer a comprehensive list of recommendations.

The strategy proposes a framework where state and federal governments work together to provide targeted assistance to small businesses. It also acknowledges the need for efficiencies when responding to economic shocks or crises, such as natural disasters.

While the government has positioned the strategy as a significant step towards making it easier for small businesses, industry groups remain sceptical.

“Small business operators are looking for a substantive strategy from government—one where they can see clear benefits for themselves and the economy as a whole—but this failed to deliver,” said CPA Australia’s Gavan Ord, in a statement.

The group warned Australia had “sleepwalked into an overly-regulated and excessively bureaucratic nightmare” that is damaging business productivity.

“We urgently need to wake up,” CPA Australia said.

Meanwhile, Ord stressed that a cultural shift is needed within all levels of government, moving away from excessive regulation as the default solution.

“Bad regulation is the straitjacket holding back the economy.

“Businesses understand the need for robust regulatory frameworks, but the government should be taking a more deregulation based approach that frees up the time and resources businesses need to focus on their priorities.”

He called for a focus on education and improved enforcement of existing laws while maintaining necessary safeguards to protect businesses.

“We need governments that foster economic growth, not ones that assume they can regulate the economy into prosperity.”

Labor’s $10.8 Million Funding Boost

From Jan. 1, Labor committed $10.8 million in new funding over 18 months for the Small Business Debt Helpline and the NewAccess for Small Business Owners programs.

The NewAccess program, run by Beyond Blue, offers free, confidential mental health coaching to small business owners.

Coalition Hopes to Spur Small Business Activity

Meanwhile, the Peter Dutton-led Coalition has pledged to reduce red tape and introduce policies to encourage small business activity.

One policy is a capped tax deduction of $20,000 for small businesses spending on meal and entertainment for customers or clients.

The proposal, which excludes alcohol, would be available to businesses with an annual turnover of up to $10 million and would be exempt from Fringe Benefits Tax for two years.

“This is a win for small businesses spending money on their staff or clients, and a win for hospitality venues that will see increased spending,” Dutton said.

He criticised the Albanese government for failing to address the real challenges small businesses face, pointing to rising electricity, gas, and insurance costs.

Treasurer Jim Chalmers, however, dismissed the policy as an irresponsible use of taxpayer money.

“We’re supporting small businesses in a more responsible way,” he said. “Tax cuts, energy bill relief, cyber protections—these are real solutions. Peter Dutton is for tax breaks on long lunches.”

With the election approaching, small businesses remain at the centre of the political debate.