Wentworth Small Business Forum hosted by Google at North Bondi Surf Club


Wentworth Small Business Forum hosted by Google at North Bondi Surf Club - 22nd April 2016

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E&OE…

Well thank you very much Karim, Stephen, and Richard thank you all very much. It is so great to be here with some of the small businesses from my own electorate, my own community of Wentworth, and particularly to be here at North Bondi Surf Club where I in some respects grew up. I used to come down to this surf club, not this building, I can assure you this is a very new building, the old surf club, when I really, I could barely walk. I was just a little, not much bigger than a toddler at best and I came down here with my father and so much of my early childhood memories are tied up with North Bondi Surf Club and all of the characters and various people I used to know here. So I always feel very good when I'm here. I feel I'm recovering or retrieving some of my formative years.

Now what you do to small businesses of Australia is you create the drivers, the big drivers of economic growth, 4.7 million Australians work for small businesses, work in small businesses. There are 2 million small businesses in Australia. Your energy, your optimism, your entrepreneurship is what sets us right. It is the spark of enterprise that keeps on burning and the one that every policy of my Government is determined to encourage.

Every single policy we have is designed to encourage you, to support you, to back you. Stephen said our last budget did just that and you'll see the next budget on 3 May will do that again because, as I said, your enterprise is what is driving the great jobs growth we're seeing in Australia.

You saw earlier this week we succeeded in abolishing the RSRT, the Road Safety Remuneration Tribunal, a body that had been set up by our opponents when they were in Government which had, as was its intention, had the effect of putting out of business tens of thousands - 50,000 owner-drivers. These are small businessmen and women like you who borrowed money and bought a rig or two, built a business and the order that this tribunal had come out with had put them out of work. They couldn't pay their mortgages, they couldn't earn any money, they couldn't put food on the table. It was an absolutely catastrophic impact on a very large part of the road transport sector, the small business part of it. The family business part of it. The mum and dad business part of it.

Well thankfully we were bringing the Parliament back early on 18 April, as you know, to deal with the building construction commission bill so we had the opportunity to abolish that tribunal there and then. We were very pleased to get the support of enough Senators on the crossbench to see it abolished and so all of those small business men and women are now back in business and that is our commitment.

We want you to be doing well in business. Now our commitment to innovation is, again, critical to Australia's success and to your success. It is critical to ensuring that our children and grandchildren have great jobs in the future and that your businesses can prosper.

I've just come from the University of NSW where we've opened a new quantum computing laboratory. Quantum computing is an area of computing science where Australia is a leader. There is a lab there led by Professor Michelle Simmons which is literally a decade ahead of any other in the world. We are world leaders. This is the new stage of computing that enables us to process at a massively increased rate from the conventional computers we know today. Even our biggest so-called super computers.

It is a completely different paradigm. It is cutting-edge stuff and very challenging and they are solving all of those problems there at the University of New South Wales and this will have an enormous impact, beneficial impact, for you. You won't have a quantum computer in the back of your office or in your pocket or on your desktop, I can assure you of that, but in the cloud-based computing environment, which of course is where Google operates, what you will - your client devices, your phones, your tablets, your laptops will be connecting in future to the processing power of those of this new generation of computers.

So right across the board we're supporting innovation. We've supported crowd-based funding so that small businesses, entrepreneurial businesses can get their funding, use the power of the internet to collect the financial support they need.

We know that often it is very challenging for early-stage companies, start-up companies to get finance, so we're providing really tangible tax incentives for angel investors to come in and back small start-up companies. Many of them won't succeed but you know what, that's fine. When you start something - I'm sure many of you, like me, are serial starters of businesses, you learn more from the things that don't start, don’t work than you do from the ones that succeed. Because when you have a new initiative and it does brilliantly, you generally just congratulate yourself and keep going.

When something doesn't work out you'll reflect on it and learn a lot. That's why there is a need for a real cultural change in the way we approach entrepreneurship and risk-taking. We've got to be prepared - and this is true of Governments and big companies as much as it is true of smaller businesses - we've got to be prepared to experiment, have a go, try something, if it doesn't work, cut it quickly, move on and do something else. That agility, that spirit of innovation is a fundamental part of our policy, our agenda and it will be part of our continued success in the 21st century and our economy is doing well.

There are areas, parts of Australia, where things are much tougher than they are here in Sydney I hasten to add, because we've seen a big mining construction boom recede. It got up to 8 per cent of GDP. It obviously couldn't go on forever because once these big mines and projects are built, then you move into the production phase and the huge investment in labour and capital and so forth with construction has been spent, but we're still seeing strong growth.

We had 3 per cent real GDP growth last year, over 300,000 jobs created across Australia, highest since 2006 and as you would have seen a while ago, 26,000 jobs created last month. So all of that shows that our economy is diversifying and a key part of that diversified dynamic response is you.

You represent the most agile, the most innovative businesses in Australia. There's no question about that and that's why we back you right up to the hilt.

So I'm really thrilled to be here. I want to thank Google for providing these workshops. There is no question that as we move into an increasingly digital economy and one where we are transacting almost everything on these devices. This little device, this smartphone which I'm sure all of you have got one or other model in your pocket, this has the processing power of a 1990s supercomputer and the quantum computers that are being developed at the University of New South Wales will make the supercomputers of today look slow so think about it, there's a very, very, very, very exciting world out there on the digital frontier.

So I'm thrilled to be here. Congratulations to Google. Congratulations to you. And I think we've got time for some questions so I'd be delighted to take some.

CHAIR:

Thank you very much, Prime Minister, for these remarks. Prime Minister will take three questions from the small business audience there. If I can ask you to keep on the topics of small business and innovation that would be appreciated and as you ask your question please state your business and name.

KAREN WILSON:

My name is Karen Wilson I am from the New South Wales Business Chamber and I would like to ask you a question.

PRIME MINISTER:

Yeah.

KAREN WILSON:

With the advancement in innovation, and I’ve been on computers since I was very young.

PRIME MINISTER:

Sure.

KAREN WILSON:

How do you see humanity and technology working together? How do we not lose humanity in small business and still have advancement in technology?

PRIME MINISTER:

Well, that's a good question but you know something, technology's function is to serve humanity.

It's created by us, by humans, and its function is to serve us and it's interesting how the applications that work - that are most successful online - and can I say this as someone who's been involved with internet businesses since 1994, in fact a little bit before that, so for a long time, basically from the time the internet became commercial - the applications that succeed are those that best respond to innate human characteristics.

I'll give you an example.

Humans, all of us, are individuals. Every single human being, all the billions of people in the world every one of them is unique. All of us know we’re unique and we all want to exercise our personal choice, right?  So the applications that work the best online are the ones that give people the maximum choice. You remember, you know in the earlier days on the internet in the late nineties, companies like AOL had “world gardens,” you know, they figured that people would get on to connect with AOL and they’d go into the AOL world and they didn’t really want to look at what else was going on else was on in the internet?

Total failure. Why? Because humans want choice.

So the technology is responding to us. Let me give you another example. We are highly social animals. We are fascinated with each other, that's why we, you know, people will sit and have a coffee and just watch people going past. We love reading about each other, we love talking to each other. We are very social animals and we are inspired when we are connecting together. So this is why, notwithstanding we have the ability, all of us theoretically, to sit on a little isolated rock somewhere and communicate over the internet, why nonetheless, the greatest and strongest centres of innovation are in places where people congregate - Silicon Valley being one good example but there are many others. You see - we have a natural human desire to be social and so what are the applications that are most successful today? It is social media. It is, you know, all the Google social applications, Google chat and of course Facebook and all of these applications. You look at the way all of the chat applications and messaging applications have been turned into social applications. So I think the technology is, if you like, rather than denying our natural characteristics as humans, it is expanding them and amplifying them and the applications that are most successful and the businesses that will be most successful, are those that respond to those basic needs of human beings. Us, all of us, very, very social, chatty animals that we are.

GREG TINGLE:

Greg Tingle, Media Man. Good to see you again, Prime Minister.

PRIME MINISTER:

Good to see you.

GREG TINGLE:

Your last answer partly answered my question but I wasn't going to give up my question.

PRIME MINISTER:

No. Think of another one, quickly. Be agile, think of another question.

GREG TINGLE:

I’ve got one. If you were running the show - not to let the cat out of the bag too much but if you were running Google, what sort of ideal scenario as far as a win-win-win type of situation for Google, for Bondi, for Waverly council would you like to see achieved out of today and in the not too distant future for the whole Bondi-Waverly area.

PRIME MINISTER:

Well, it’s just what I hope that Google will - and I'm sure they will – is open your eyes and encourage your imagination to pick up applications and examples of how you can use their applications. I mean, that will enable you to do more. Let me give you an example. If you go back 20 years ago or even arguably 10 years ago, but certainly 20 years ago, if you're starting a business, you had to buy a whole lot of gear. You had to buy a server, you had to buy a whole lot of licensed applications which were downloaded on to your server, whether it was accounting software or you know, a spread sheet application you might have got, you know, the Microsoft Office package. That would have been typical.

You had to spend all of that money on doing that and that was all happening in your office and your ability to collaborate with others was relatively limited. Nowadays – and I’m not, I mean, Google is a giant in the industry, it is one good example but there are others - nowadays, any business, whether it is large or small, has the ability to access either for free or at a very historically relatively modest charge, very powerful cloud-based applications.

I mean if you, as a small business, you can use Google docs, Google sheets, there's a whole bunch of applications there which enable, which give you, from your smartphone - or a tablet if your, you know your eyes are not good enough and your fingers are not nimble enough - where you've got all of that processing power there in the cloud.

So what the combination of enormous storage, very fast processing time, vastly improved broadband - what that has all done is immensely increased the leverage of the small actor in the business world. Because it lowers the cost of getting into business. You have tools that enable you to connect to the world at much lower cost than you've ever had before. Of course, as you know, I mean, the cost of marketing online is, I'm sure you'd all like Google to charge less For AdWords and you should.

That is something – there you go, I've found the answer. A special discount.

RICHARD FLANAGAN:

That's an option.

PRIME MINISTER:

A special discount. He's committed to it! A special discount. A special discount for the small businesses of Sydney, but especially, a special one for those in Bondi.

RICHARD FLANAGAN:

It's a fair-auction system, Prime Minister.

PRIME MINISTER:

I know. I know. But quite seriously, that's given you - that gives you enormous leverage too. So I think the answer, I'll just conclude with an observation I often make but it's worth repeating. When we started OzEmail back in - literally 22 years ago - the real technological wizard was a man called Sean Howard. Sean was a real thought leader and innovator in the internet space. I mean, we, had for example, had the first commercial voiceover IP business. So we were doing lot of things that were cutting edge not just in Australia but right around the world. Now, Sean always used to say - and he's right - that there's generally or always a lot of technology. A lot of technology.

What is in short supply is technological imagination. You know, what can you do with it? That's why it's very important to talk about it with others. But above all, open your minds; be as imaginative as you can. You know, preconceptions. ‘we've always done it this way’, or ‘we haven't done it like that before’. Chuck that out.

This is a new fast-paced world where you have to be agile and, above all, open your minds. Just imagine what you can do because the other great thing about the digital domain is you can try things out, doesn't cost you a lot to experiment and if it doesn't work, well, do something else. You'll learn something from it. This is why you've got to be nimble and be prepared to experiment - and this is the great advantage small business has got - because you move so much more quickly than a big firm does.

So that’s, I guess what I'm saying is the internet, the cloud-based applications, all of this social media, this gives you an edge that you didn't have before versus the big guys. Your own imagination and agility gives you an even greater one. So the environment, I think, is very helpful to small business. We have done - as you know, we've provided tax breaks, we've provided instant asset write-off breaks. You know, we're amending the section 46 of the Consumer and Competition Act to give you greater leverage in terms of dealing with big companies. Like Google, for example, but I'm sure they'll always be very friendly.

But our focus as a Government is to support you, small business, but the environment in which you're operating in is one I think is very helpful too.

RICHARD FLANAGAN:

We'll show you lot of how it uses technologies today during the training as well.

JOHNATHAN SCHAFER:

Jonathan Schafer, we have a business called Plum Play which started in my bedroom in the UK despite this accent 28 years ago. I brought it to Australia 7 years ago. Just looking at some of the comparisons - in the UK, our tax rate has just gone to 19 per cent and they're heading for 15 per cent compared to what we're paying.  There's also entrepreneurs' relief of 10 per cent on the capital when you dispose of a business. Now, don't you think that we are possibly over -taxed here as small businesses in Australia?

PRIME MINISTER:

Well, we have, as you know, reduced the tax on small businesses in the last Budget. But we are - why don't I, as Tony Jones would say on Q&A - I'll take that as a comment. Given that the - and I'll certainly raise it with my friend the Treasurer. But we are working, as you can imagine, we're getting very close to the Budget on 3 May and I can assure you that it's every element of our Budget is going - is focused - as you'll see - it is focused on supporting enterprise, investment and jobs. So it may not, well it won't be to everybody's satisfaction, naturally. Because it's a balancing exercise. But the budget - our goal is for the budget to be prudent, we have to live within our means. We have to drive that deficit down. We've got to get the budget back into balance.

You've got to remember - without giving you a partisan speech - when we left office in 2007, we left the country with no net debt. In fact there was cash in the bank, and we've inherited huge deficits and huge debt and it is very hard to turn that around quickly.  So we are - the Budget will be seen as prudent in a fiscal management sense, living within our means. It will be seen as fair and it will be a fair Budget. That is very important. But it will also be seen as one that supports investment, enterprise, business and jobs. Because that is the key. Unless we have strong investment growth, unless we have strong jobs growth, then we won't have the revenues to pay for the schools, hospitals and roads.

We need strong economic growth in order to remain a prosperous, first-world, high-wage, generous social welfare net economy. So your enterprise is absolutely critical. You are providing the energy and the enterprise that drives our economy and secures our future. So thank you for the Budget advice and all noted.

But I'll wait - we'll wait until 3 May for the announcements.

RICHARD FLANAGAN:

Thank you very much, Prime Minister.

PRIME MINISTER:

You want to do one more? This could be a mistake of course.

ROBERT TERLEY:

We may have I think you'll like this one, Mr Prime Minister. Thank you. My name is Robert, I'm from Position Realty. The question I have for you - you obviously have a limited budget, amount of money you're allowed to spend, are you going to be promoting more technology-based small businesses? Is that where your focus is going to be? I knew you'd like it!

PRIME MINISTER:

Yeah. Well thank you. There is – we have an innovation agenda but there is innovation everywhere. It’s not - when we talk about innovation people often think of, like the guys that developed Google maps or indeed Google itself, they think of some smart young people working away in their mother's bedroom or the garage coming up with a brilliant idea. That's good. Hey, that's very important. But innovation is important right across the board. It's important in very traditional businesses. I mean, you see it in agriculture - extraordinary innovation. I'll give you one example. I was up in Queensland talking to a young couple, who are from South Africa, farmers who came here, got some land, and built an orchard. Mostly they grow macadamias and avocados and they have been - the local bats are very fond of what they grow and they used to lose 30 per cent of their crops. That's a big number.

They developed some computer-controlled drones which not only flash lights and make loud noises, but are programmed to come out when the bats arrive. Needless to say, the bats who feel they've flown into a Star Wars movie go off and eat somebody else's avocados.

That's just a good example. I often give the example of a plumbing business, a plumbing manufacturing business in Adelaide. This is an old-style manufacturing business, been around for the best part of 100 years. It's the world's leader. Why is that? Because they've identified a particular niche, markets where there is metric pipes and imperial pipes and been laid at different times. How do you join them up? How do you have the gear, the gate valves, the joints, all of the kit that can operate between the two? Become a world leader in that and their business is growing.

If you'd said I think its 85-year-old manufacturing business in Adelaide, you'd say – gosh - that sounds like their prospects wouldn't be bright. Booming. Doing very well. Expanding, hiring more people. Why? Because they've been innovative.

Right across the board, you look at the example of Mandy's business here and the others I'm going to meet with in a moment. There's some of you have really knocked the ball out of the park because, simply because you've been innovative, you've had great ideas and you've been able to use those digital platforms to amplify, expand your business in a way you simply couldn't have done so before.

So innovation is for everyone. It's even for governments. That's why we have a digital transformation office and we are determined to change the way the government operates so that – again - it is as easy to deal with and as responsive as the best online companies, whether it is an eBay or one of the big online - Google itself or Amazon.

So we’ve got to make it as easy for you to deal with the government as it is to do your other business online, as it is to deal with your businesses. So thanks very much and, again, congratulations.

ENDS

If you weren’t able to join us at today's event in Bondi and would like to learn how to boost your business online, Google Partners Connect is another free training event taking place on May 4 at hundreds of locations across Australia. Find an event near you.

(Credit: Malcolm Turnbull MP. Federal Member for Wentworth)