8 December 2015
Transcript - #2015076, 2015

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Patricia Karvelas, RN Drive

SUBJECTS: Innovation agenda; MYEFO; insolvency reforms; Australia’s new Ambassador to the US.

PATRICIA KARVELAS:

Kelly O'Dwyer is the Assistant Treasurer and the Minister for Small Business. Hi Minister, welcome back to Drive.

MINISTER O'DWYER:

Great to be with you Patricia.

KARVELAS:

Now the Innovation Statement was generally pretty well received yesterday but then again, it came without the savings needed to actually fund it. Those will be revealed in MYEFO so that is the tricky part that is ahead of you still isn't it?

MINISTER O'DWYER:

All the work has been done. We have definitely got the savings that are required and, as you quite rightly point out, when we announce the Mid-Year Economic and Fiscal Outlook - which will be very, very shortly, as soon as next week - we will be able to demonstrate just how really careful we have been with the nation's finances.

KARVELAS:

Does that mean we can expect more cuts to offset what we have seen in this Innovation Statement?

MINISTER O'DWYER:

It means that we are going to be spending within our means and that we are only spending within our means. One of the great problems of the previous government was that they had ever increasing exponential spending and they were chasing that with ever increasing taxes. Now that was not sustainable and we are getting the finances back in order. What we did yesterday was we unleashed our plans for growth and that is to make sure that we can encourage companies and start-ups to be more innovative, we can have a more innovative government as well in the way that we deliver services, making sure that where we have opportunities to invest in collaborative projects, that we do that. That the CSIRO is at the forefront of that and that we offer the right sort of incentives for people who are wanting make those investments so that they are encouraged to do that through various different tax offsets.

KARVELAS:

The Innovation Minister says this new agenda is all about jobs and growth. Can you please put some figures on how many jobs and how much growth will flow from the agenda announced yesterday? I mean there must be given so much money was spent in this area some modelling around the multiplier effect, how many jobs this would create?

MINISTER O'DWYER:

We are going to see the outcomes in the weeks, months, and years to come through this particular package…

KARVELAS:

So are there figures though, do you have figures that we haven't seen?

MINISTER O'DWYER:

Well what I would say to you is we think that our package has the potential to unlock very significant growth in the economy. Happily, we have already seen an increase in growth from 2013 upwards of 2.5 per cent increased to GDP which is double that of Canada, it is higher than the G7 and the average in the OECD so that is a good start. But we know that we can't simply rely on what we have been relying on for all of those years which is digging up our iron ore and selling that off, we know that with the decreases in prices for our commodities that we need to make sure that we have other avenues for growth and those other avenues are going to be unleashed by our Innovation Package as a starting point.

KARVELAS:

So, are there figures about how many jobs would be created, do they exist and we are not having access to them or is it that the Government is not - doesn't have the figures and would prefer to see where this takes you?

MINISTER O'DWYER:

Well certainly there is always modelling done when you release a package such as this but when it comes to tax offsets for instance you can't always model that directly, you need to see how that works in practice.

KARVELAS:

Is it fair to say the Innovation Statement has set out tax breaks and other measures for start-ups but you don't actually know what qualifies as a start-up yet?

MINISTER O'DWYER:

We are going to be working through the legislation to make sure that it is targeted to those new businesses that are going to be kick started as a result of these new measures. We are not simply opening up a tax loophole for people to exploit but this is all designed to ensure that we have new start-ups, who previously haven't had access to much finance, get given that finance in order to grow their business and unlock broader economic growth in our economy.

KARVELAS:

On RN Drive my guest is Kelly O'Dwyer who's the Assistant Treasurer and also the Small Business Minister and Minister I'm going to put this question to you in the context of your role as Small Business Minister. Given that is one of your portfolios, what kind of small businesses should qualify for these new innovation incentives?

MINISTER O'DWYER:

Well, innovation of course can be across a whole range of different businesses, it's not just in the ICT industry and as I said we will have more to say on that as the legislation is developed...

KARVELAS:

So it is going to be clearly defined?

MINISTER O'DWYER:

It will be very clearly understood for those businesses who are seeking to access these tax offsets. But let me say this, for the small businesses out there, and we've already got around 2 million small businesses in this country, we want to see even more of them because we know already small business contributes around $340 billion to our economy and we want to see that figure grow even larger. A number of small businesses complained that they have real trouble accessing finance. They don't want to take out more loans but they want more equity in their businesses and what we announced yesterday and the legislation that I brought into the Parliament last week, was to enable those small businesses to be able to access for the first time in Australia, crowd-sourced equity funding. Now we've looked around the world, we've looked at the different models - the New Zealand model, the UK model, the US model and the Canadian model and we've picked out the very best bits of that that will allow mum and dad investors to be able to invest in small businesses so that those small businesses can be set up, or in some cases can grow.

KARVELAS:

What's the potential to take the relaxation of the insolvency laws even further towards to the American approach, known as Chapter 11, to keep creditors from jumping in early to break up a company's assets and giving the company more ability to restructure and revive. Is that on the table potentially for the future?

MINISTER O'DWYER:

We certainly have a different system to that of the US. What we're saying is that there are some measures in the US that we think are worthy of consideration here. One such example is making sure that we have a safe-harbour for directors from personal liability for insolvent trading, if they're appointing a restructuring adviser to develop the turnaround plan for the company. Which means rather than a business falling over straight away with better structuring, making sure that they've got a proper plan in place, that they can turn that around, which means you can often save jobs and businesses that might have been on the brink can in fact go on to not only survive but to also thrive.

KARVELAS:

Just back on MYEFO, it's being released next week, why is it happening in Perth? I mean that's three hours behind the eastern states, is it to avoid scrutiny?

MINISTER O'DWYER:

I'm not sure that we've actually announced where it is going to be happening and I'll leave that to the Treasurer and the Finance Minister.

KARVELAS:

Can you give us any more information? Is Perth on the money?

MINISTER O'DWYER:

I'll let the Finance Minister and the Treasurer announce exactly where MYEFO will be taking place.

KARVELAS:

I'm sure you haven't missed this Kelly O'Dwyer; Joe Hockey has said in an interview that he quit Parliament because if he stayed, it would be overwhelmingly about getting even with the people who brought him down, that it would be payback. Is that a noble stance to take?

MINISTER O'DWYER:

Well I haven't heard those comments but I do believe that Joe Hockey is one of our great Australians and he will do the nation proud as Ambassador over in the United States when he takes over from Kim Beazley in January of next year. As I said, I haven't heard those comments directly but it doesn't sound to me like the sort of comment that Joe would make.

KARVELAS:

He did, he did make those comments. He said that if he did stay in Parliament he'd want payback. Given Tony Abbott is staying in Parliament and in fact has said that he won't be making any decisions about whether he leaves ‘till now at least April, should he do the same thing given sniping or being grumpy or angry even after an event like this seems almost enviable for so many people.

MINISTER O'DWYER:

I think Tony Abbott is again, a very fine Australian. He served with distinction as Prime Minister and I think it's perfectly reasonable for him to consider his position and what he wants to be focused on into the future. I know that like all of us who are in the Parliament, he'd be focused on what is best for the Australian people and frankly, that's more interesting to me than internal party matters.

KARVELAS:

I know that you guys don't like talking about them but they're happening so I have to ask. Mr Abbott has also told Sky News that by publicly defending his own legacy, which he's been doing quite a bit, he's actually helping Malcolm Turnbull and his colleagues do the right thing. Are you grateful for his help?

MINISTER O'DWYER:

I think everyone has a contribution to make and everybody chooses to make it in their own way.

KARVELAS:

Before I let you go, yesterday you told the Women's Leadership Summit that Malcolm Turnbull's Cabinet can be quite brutal. Why? Why is it so brutal?

MINISTER O'DWYER:

Well what I was saying - the full context of the speech and the question that I was actually asked - was that what was it like to sit around the Cabinet table and I simply made the comment that as you would expect, there is a full, frank and fearless exchange of views on some of the key issues affecting our nation and every Minister who comes before the Cabinet needs to present their case and present it well because it can be a fairly robust - and I used the word brutal, but I probably should have used the word robust - it can be a fairly robust exchange, as it should be. It should be a very robust exchange because at the end of the day the Cabinet is in effect the governing body of the country and you would want there to be a full, frank and fearless exchange of views before those policies come to the attention of the Australian people.

KARVELAS:

To be a fly on the wall, which I'll never be. Thank you so much Kelly O'Dwyer.

MINISTER O'DWYER:

Thanks Patricia.