Is it really about the future?

The Federal Budget is set to be handed down tonight in Australia, and Treasurer Wayne Swan has said this budget is "about the future".

Unfortunately, I don't think we are going to see some areas key to securing the social and economic future of the country addressed. As someone running a small business operating in non-traditional industries and markets, trying to do something a little bit different, my take on things might be fairly specific - I do think it is worth considering.

It doesn't matter if we like it or not, the economy affects all of us. Simply, a strong economy is good, a weak one is bad and one on the way down terrifies the market, making things unstable and unpredictable. No matter your political leaning, ideological perspective or opinion on where things are heading, there is one thing which is very difficult to argue. A strong, profitable private sector is a stabiliser and safety net. Giving the private sector it's best chance to grow, and not penalising it when it is successful, is key to our financial future.

From what I have seen in other countries and the people I have spoken to, I don't think we are good at that here. Our private market and start-up environment is very immature. So, in my opinion, what is it this budget should look at that it probably wont?

Innovation

We need to support private innovation. Australians produce incredible ideas. Unfortunately many of them end up going elsewhere to be successful. I was astounded recently to realise first hand how many Aussies have taken their ideas to Silicon Valley, becoming American companies, to be able to make them happen. As a nation we need to support private enterprises, large and small, to conceive, develop and produce their innovative ideas.

Our venture capital market is so immature compared to other economies and risk averse it has become negative. The government grant systems are good, but many require dollar for dollar matched funding and all require too much paperwork and time spent away from the innovation. Businesses and innovators are penalised for developing an idea and realising it isn't viable or turning it into something else. That's part of the path to creating great things - remember Rome wasn't built in a day. It is simply too difficult and expensive to develop an idea in Australia right now.

Growth

There needs to be more support for private sector growth. At the moment as a business it is difficult to think of an area of business where there isn't a government fee or tax associated. I appreciate the need for government to raise revenue to fund public programs entirely, this isn't a comment on that. The fact is though that in their current form many of them discourage growth until it becomes vital. Very rarely will you hear a business say they are going to employ more staff to try and expand their business, more staff are engaged when it becomes absolutely necessary to do so, there are just too many costs associated otherwise.

Business profits are also penalised. Profits are always reinvested. Whether directly back into the business or through dividends and into retail markets and so on. The more a business stands to earn the more, ultimately, will be returned to the economy. Structures and systems which make it more cost effective to remain at a smaller size as a business stifle potential economic growth. Especially in terms of export potential.

Encouraging business to grow results in more people employed and more money in the economy, along with fewer costs in government benefits.

Entrepreneurs

It needs to be instilled in our society that it is ok to take a different path. Entrepreneurship has born many of the revolutionary products, industries and ideas which are now incorporated in our everyday lives. Unfortunately Australia still holds on to its "tall poppy" mentality when it comes to this area. We need to encourage people to take a different line, to risk their own security and position to try to create something they are passionate about. We need to do it as a society and we need to teach the value of it in schools and tertiary institutions.

Being a fantastically skilled person in any organisation, doing great work, is a wonderful thing, and many people want to do a good job and go home. There are those people, though, who want to be the people who set the challenges for others to meet, to try something completely different. We need them in our country too, we need to show people the value of that way of thinking.

The next wave of private sector growth will be vital to Australia's future. I truly hope we see a budget tonight that acknowledges that and takes active steps to support it.

But I fear we won't.

~Andrew