Cabinet role not essential to represent small business: Nick Sherry

Nick Sherry, fresh from handing over small business ministry to Mark Arbib, says a cabinet position is not necessary to represent the interests of small business and raises the possibility of a legal challenge to state-based franchising laws.

Speaking after stepping back to the backbench, the Labor veteran told SmartCompany that it can take a new minister up to six months to get across a portfolio, although his successor would likely adapt quicker because he’s already serving as Minister for Sport.

Sherry says he had been thinking about stepping back from the small business role for a couple of months, and hopes to be reappointed to the economic committee and joint corporation financial services committee when Senate resumes next year.

Sherry, who did not have a say in his successor although pushed for a promotion of Tasmania’s Julia Collins, says he enjoyed being a minister.

“But objectively you’ve got to, at some point in time, decide that someone else should have go, and I should think about doing other things,” Sherry says.

“I think all people face that in their careers, and you’re better to make the decision yourself.”

He also throws his weight behind the health of Australia’s franchising sector, saying dispute levels are not disproportionate and state-based legislation are not necessary.

Indeed, Sherry says South Australia’s decision to appoint a Small Business Commissioner – allowing for industry regulation beyond federal franchising rules – could be subject to a legal challenge.

“The national position has been very, very clear: we believe in one set of rules, laws, supervisory and regulatory requirements in this area,” Sherry says, noting Australian Competition and Consumer Commission chair Rod Sims also supports national franchise laws.

Sherry says although the Commonwealth can’t stop the state passing additional laws and won’t initiate a legal challenge, a dispute in the state could prompt a legal challenge to the new state laws.

On small business representation in Government, Sherry says he does not believe it would make a difference if the ministry was in Cabinet.

“I don’t think it would, I really don’t.”

According to Sherry, a capable minister and the 50-60 public servants in a small business division ensure the small business angle is represented in Government discussions.

“You can argue effectively within Cabinet processes even though small business is not in Cabinet.”

“Look, every piece of legislation that goes to Cabinet is referred to the small business division. They’re consulted; I get briefed on everything that impacts on small business, and that’s most legislation.”

“That legislation goes to a Cabinet sub-committee and if there are any issues impacting on small business, I’d voice my views very vigorously.”

Sherry nominates two examples where he successfully pushed small-business concerns on proposed changes: tougher food labelling laws that didn’t see the light of day, and the decision to no longer compel restaurants and cafes to display separate menus for days when surcharges are applied.

Questioned on sentiment among SMEs, Sherry describes the economy as “growing well” but “patchy”, with differences across both regions and sectors.

“It is a tough environment for many in small business – that’s a very constant message.”

“I’m still concerned about funding issues, financing, and I’m particularly concerned because things are getting more difficult in financial markets because of Europe,” Sherry says.

“If institutions are starting to find it harder to get money, I’m concerned about that as an issue because that flows through to small business lending.”

On the Cabinet reshuffle this week, Sherry gave an insight into how long it takes for a new minister to find their feet.

“If you’re a new minister and you’ve never been a minister, it probably takes you a good six months to get on top of things.”

“But if you’re an existing minister and you have a greater familiarity with the bureaucratic process, it shouldn’t take you more than a few months.”

“Mark [Arbib] has already been a minister, he is a minister at the moment, so that’s something you should ask him. But when you’ve already been a minster, there’s no doubt it’s a quicker take-up”

He nominated the tax depreciation changes from $1,000 to $6,500, the expansion of the small business helpline, the growing popularity of the small-business clearing house, and a decrease in the amount of days it takes for government to pay small business as his proudest achievements in the role.

Other issues outstanding are the national business names and the dispute resolution paper, Sherry says.

Sherry adds that there is often a disconnect between what people often expect from a minister and what a minister can deliver.

“There’s always budget constraints. You’d like to do more.”

“Anything that costs money, you’ve got to justify.”

“Sometimes processes are a little slower and that can be frustrating. But that is the process of government.”

“Sometimes expectations are greater than what is able to be done. It doesn’t matter who is in government.”