Bruce Billson: Making small business a big portfolio
By his own frank admission, Bruce Billson “wasn’t the world’s greatest small business person”.
In fact, when he and his wife sold Beauty and the Beach, the art gallery and craft shop they ran for a couple of years on the Mornington Peninsula, they made a loss.
But, on a positive note, the Abbott Government’s Minister for Small Business says he gained a sound understanding of small enterprises. “I bring grounded and real-life insights to the challenges that small businesses face – the joys of pillow talk about cash flow and all that sort of stuff,” says Billson.
The Victorian-based MP’s appointment has given the small business sector hopes of reform in key areas such as financing and competition policy.
Following a series of Cabinet reshuffles in the last days of the Labor Government, Billson is the country’s sixth small business minister in 15 months, and the sector is hoping for some stability.
His appointment to Cabinet – the Government’s inner circle – is a landmark for the sector.
It’s not the first time a small business minister has been at the centre of government. But it is the first time there’s been a small business minister in Cabinet who is solely focused on small business. Until now, small business was a post Cabinet ministers added on to more traditional big roles, like resources or employment.
Peter Strong, executive director of the Council of Small Business Australia (COSBOA), sees the significance of the portfolio’s elevation – and with Billson’s retention of it. “We are very confident of Mr Billson and that he is focused on our needs,” he says.
Billson’s public profile doesn’t compare to that of Cabinet colleagues like Julie Bishop or Scott Morrison. Yet Canberra observers say his appointment to Cabinet was no surprise. He was a diligent and hardworking shadow minister who never fumbled policies or media appearances.
His low profile has a lot to do with the scant attention that small business receives in the media and in public policy. He says his first task is to change that. He wants to elevate awareness among the public and policy makers of “just how crucial small business men and women and the enterprises they oversee are to our overall economy”.
“That means tackling head-on the very specific and practical measures that we’ve dealt with in our policy, but also nurturing a more supportive, enterprising climate and awareness in the nation, so that small business people, when they have the instinct to have a go, are actually encouraged to do so.”
Billson, 47, has a master’s degree in business leadership from RMIT, and aside from running his own small business, was manager of corporate development in the Victorian Shire of Hastings in the early 1990s before becoming an adviser to Victoria’s Minister for Natural Resources.
In 1995, he was seconded to work in the office of Liberal Senator Rod Kemp, the then shadow environment minister, to help develop the Coalition’s coastal and water policies. “I can’t speak too highly of Bruce’s work,” says Kemp, adding, “he has a remarkable capacity to work at a very high rate”.
“He can move paper quickly, which is a good sign for the small business portfolio,” he says. “He had a very good grasp of the policy challenges and how to give effect to those with policy recommendations that were workable.”
Importantly for the small business sector, the portfolio has been moved from the Department of Industry into Treasury. Billson says he lobbied for the change, because “so much of the environment in which small businesses and enterprising people need to operate is shaped by decisions made within the Treasury”.
The Government also plans to beef up the power of the Small Business Commissioner established by Labor, renaming it the Small Business and Family Enterprise Ombudsman and giving it a role in mediating disputes between small businesses and other enterprises and government. Billson says several areas of Commonwealth law require mediation, but small business people are often not confident about the mediators’ objectivity and balance.
The Small Business and Family Enterprise Ombudsman will also act as a central point of contact to help small businesses interact with government. “You shouldn’t need a PhD in governmental and constitutional feng shui to be able to find your way around the various commonwealth agencies and departments that do things that impact on or are helpful to small business,” says Billson. “If the ombudsman isn’t in a position to help, then they can act as a concierge to guide people to where they have to go.”
The Government plans the first major review of competition policy for 22 years, which will address some of the pressures on small business. Says Billson: “We’ve seen concerns arise in those sectors of the economy where there are a few dominant players, who are interacting with smaller businesses and suppliers and are able to throw their weight around and compete on the basis of muscle and not merit.”
It’s difficult for governments to take on the entrenched interests of big businesses.
COSBOA’s Strong says the small business sector “just has to be very careful that the likes of the Shopping Centre Council, the Franchise Council of Australia and Coles and Woolworths do not attempt to undermine Mr Billson by approaching other Cabinet members and trying to influence their opinions”.
Billson is quick to dismiss the concerns, saying there’s “no evidence” that big business is undermining his efforts and that the Government is unified in its commitment to review this competition arena.
Ahead of last year’s federal election, the Coalition highlighted small business concerns about the price and availability of funding, arguing small business loans had become more expensive compared to the Reserve Bank of Australia’s official cash rate. Billson says part of the problem is that consolidation in the banking sector over the past couple of decades has reduced competition, and he hopes to boost competition following a review of the banking sector.
The Government will also consult with banking regulator the Australian Prudential Regulation Authority (APRA) to examine the burden that the prudential framework places on institutions – to see not only that they deliver a secure banking system but also properly weight and assess the risk attached to small business loans, most of which are secured by residential property.
“With less risk in the lending practices and greater security of loans, we think the risk profile needs to be examined,” says Billson.
Institute of Public Accountants CEO Andrew Conway got to know Billson when Conway was a ministerial chief of staff in the Howard Government. Conway says Billson is a person with “immense empathy” and is a good listener, both in meetings and personally.
“Walking around the halls of Parliament House, if he asked how you were, he would stop and genuinely listen,” says Conway. “Given the importance of his ministerial role now, that’s a very important characteristic.”
Billson and his wife’s own failure in small business was an invaluable experience, says Conway, who was also appointed chairman of COSBOA in late 2013. “They felt the pressures of having to comply with various regulations and reporting deadlines, appease the financiers, customers and staff, and deal with all sorts of challenges that every other small business owner and operator understands,” he says. “That stands him in enormous stead in terms of understanding the real issues faced by small business.”
Billson says the experience taught him about the importance of planning and analysis, which is in keeping with his own meticulous approach to policy.
And the final small business lesson he learnt: “There is no substitute for customers.”
In his new role, he has no shortage of customers. Now he just has to deliver the goods.