The Interview: Bruce Billson
Minister for everything: Bruce Billson is a friend to the Australian tech sector
Bruce Billson is having an outstanding year. The indefatigable Small Business Minister has enjoyed success in his portfolio like no one else in Cabinet as the key driver behind the attractive, business-friendly Budget measures that helped turn-around Coalition fortunes.
Mr Billson is arguably the highest-profile Small Business minister Australia has ever had, and enjoys unprecedented level of support from the Prime Minister’s office. The fact that he is in the Cabinet at all is unusual for the Small Business portfolio.
And the fact that he seems able to speak freely about other Minister’s turf where it impact small businesses in Australia demonstrates his standing among Cabinet colleagues. It must be maddening.
But he is not without critics. In fact, the startup end of the technology sector gets annoyed that Mr Billson puts them in the same category as a typical small business. Some get really annoyed.
Like it or not however, the Small Business minister is a friend to the industry. And being a Minister within the Treasury portfolio has delivered huge benefits – to both startups and regular small business – by way of very specific tax changes.
And the enthusiasm with which he is pressing for procurement reform in government should be welcomed by Australia’s mid-tier tech companies, who have been shunned by the Commonwealth.
InnovationAus.com caught up with Mr Billson to find what’s next for the energetic Small Business minister, and to clarify precisely what the difference is between a startup and a regular business.
Let’s start with this notional difference between a startup and a small business. You have been criticised for calling startup companies as small businesses and vice-versa. Where you see the demarcation between these kinds of companies, if there is one at all?
Bruce Billson: My ambition is to energise the totality of enterprise, and to recognise that enterprise and entrepreneurship come in many different forms and different degrees of maturity. If we can get the entrepreneurial ecosystem right in our economy, it will not only provide the right conditions for the start-up community, but will also support small business and family enterprises and their growth and their success.
This [entrepreneurial ecosystem] supports businesses grow to the next level. This might be a growth trajectory fuelled by new markets and new technology, or export potential, or it might be the chance to build on years of success as a smaller enterprise, providing a foundation to become a large enterprise.
I tend not to delineate across those different stages and sizes of the entrepreneurial journey, more focusing on what particular challenges and obstacles, regardless of what stage they are at.
JR: So given this broad understanding, what is the key to that [entrepreneurial] ecosystem?
Bruce Billson: There are three key strategies we are pursuing. The first element is to remove the obstacles in terms of the regulatory and compliance burden. It’s really about [government] getting out of the road.
The second area is very much a focus of our work in government to get our [support and incentive] programs right. This is not to guarantee the success of businesses, but to give the business the best prospects to build their own success. That means programs designed to be attractive and supportive of entrepreneurship, and getting the competitive environment right so that an efficient business, whether it is big or small, can thrive and prosper.
The last bit that we focused on, and this was really a key part of the budget, is getting the reward and incentive piece right. Where there is a sparkle in [an entrepreneur’s] eye and a fire in their belly, we want to turn that into economic activity. That’s the reward piece. It’s about getting the tax rates more competitive so that people are prepared to take a risk. We want rewards and incentives are right so that people to take that next step. And that includes things like the instant asset write-off, to give people some incentive and reward to get some new kit [as they build their business.]
Getting the employee share scheme architecture right was obviously a big thing in fixing the errors made in 2009 by the previous Labor government. Another piece of work is getting a Crowdsourced Equity Funding Framework in place [to help] bring important and timely capital to companies in the startup or growth phase. We understand very well that finance is the oxygen of enterprise.
JR: Let’s take the entrepreneurship stuff here – do you have specific programs in mind, or are you talking about this as simply a cultural issue requiring cultural change?
Bruce Billson: It’s all of those things. In recent months you would have seen me really working hard to make sure there is a national conversation about entrepreneurship and the importance of startups, of small and family and farming enterprises. I am really trying to knit the importance of this key element of our economy into our national story.
This has been encouraging, not just for those who are active in this space, and has really sparked interest and appetite for those who may not have been thinking about it as a trajectory for them.
Secondly, we’ve got programs around the entrepreneurial infrastructure. Even things in areas like visa availability – like the Significant Investor Visa – these are the sorts of policy settings that ultimately place greater weight and value on entrepreneurship as an activity in our society.
A third area is streamlining the process of business formation. That was part of the budget process as well, making sure that people that get advice that they can expense immediately: If people are getting advice on an equity funding pitch, this should seen to be a normal and regular part of a business’s formation and evolution.
This last piece is why we have asked the Productivity Commission to do some work on ‘Businesses Entries and Exits’ – a rather clunky economist term – that looks not only at business formation and opportunities to maintain more attractive and more streamline, but also what we do when a businesses or entrepreneur faces challenges [how we can help them survive the tough times].
So there is mixture of culture, attitudinal issues and better policy alignment. For example, if we look at the Australian Research Council Grant process where we are making money available for research, we need to value more highly the commercialisation success or experience of grant applicants.
How do we get the University sector to place a higher value on entrepreneurship as a natural and necessary compliment on the work they might be doing in the STEM space? Especially where we’ve got excellent pure research, but not quite the track record of commercialisation that we see in other countries. We need to look at this.
JR: Prior to the last election, this government had promised to update the Commonwealth’s digital economy strategy. This does not seem to have occurred yet, but given the [ICT] innovation sector is such a fertile area right now, is that strategy paper on the way?
Bruce Billson: Our outlook has been that there is no distinct digital economy now, that digitalisation is quite central now, and is fundamentally transformative across the economy. We have done a few things in that space, looking at our own business [of government]. In Malcolm’s portfolio, we’ve got digital engagement activities underway. The Digital Transformation Office has been created to drive that digitalisation agenda across the Commonwealth.
In my own area, support for small businesses being more digitally engaged and to realise this transformation in our economy is a big area. We need to be a part of this transformation, because it represents good opportunities for small agile enterprises in the future.
JR: One of the things that has been an ongoing frustration for the Australian technology sector over a long period of time has been in government procurement. There are practices that make it difficult for an Australian company to get primary contracting roles. How do we look at that?
Bruce Billson: There are three bits of work that is going on there, under the Commonwealth Contracting Suite. We’ve tried to streamline some of those tendered documents, so that they don’t overwhelm, small agile service providers, whether they be in the technology space or more generally.
At the moment, it is often too easy for government to procure big projects by bundling together a whole bunch of work that might have some interconnectivity but don’t need to be brought to the market in one large chunk. It makes it very difficult for a smaller, specialist provider to engage, unless there are a subcontractor to a big prime contractor.
As part of the Commonwealth contracting suite and policies that relate to procurement more generally, there is now a positive onus on departments and agencies to make sure SME friendliness is part of the ICT procurement process.
This is also part of the vision of the Digital Transformation Office, to have visibility of this issue. I guess part of my ongoing work around the Commonwealth Contracting Suite is to make sure that procurement is small business friendly, and that are are not bundling and aggregating work when there is no need to do so.
We have taken some steps to look at what we can do through Austender to make sure smaller businesses are aware of procurement opportunities as they arise. Finally, we’re making sure we pay our bills on time. If you are a small business where cash flow is a challenge, we don’t want the Commonwealth improving its own cash flow position and making it more difficult for our companies.
JR: What are you particularly excited about right now? What are you putting your energy toward right at the moment?
Bruce Billson: A lot of my energy is being directed to work effectively with the Industry Minister and the Education Minister to get the innovation space really working more effectively. Part of what I do is benchmark what we [in Australia] are doing compared with what we see is going on in other countries. My approach is that government policy in getting the entrepreneurial ecosystem right needs to be world class.
There is a greater appreciation of how we need to be better at joining-up bits of work, and activity across various government departments and portfolios to make sure we bring our best game to the table to support innovation, entrepreneurship, and business formation.