In the wake of Tony Abbott’s ousting from office as Australia’s Prime Minister, new leader of the country Malcolm Turnbull announced his new parliamentary cabinet yesterday, flagging a number of changes across the board.
With wholesale changes to the Treasury, as well as more collaborative management of the National Broadband Network, the new parliamentary Cabinet may oversee a change in the wind for Australia’s retail sector, both online and offline.
Treasury: Scott Morrison and Kelly O’Dwyer
Filling the void of Joe Hockey, new Federal Treasurer Scott Morrison has migrated from previous roles in immigration and welfare, and has the unenviable task of selling a number of budget measures unpopular with the public, including revisions to the GST. Morrison’s performance in the role will be monitored closely, as the languishing economy formed the crux of Turnbull’s leadership bid last week.
“He has introduced significant reforms to ensure our generous social welfare safety net is more efficient, easy to understand and sustainable,” Turnbull told the West Australian.
Aiding Morrison is the new Minister for Small Business, Kelly O’Dwyer who also inherits the role of Assistant Treasurer from Josh Frydenberg, shifted to the role of Resources Minister. AFR reports that O’Dwyer will play a key role in the government’s approach to tax reform, with responsibilities including changes to the GST, company and income tax.
“The Assistant Treasurer is in effect the minister for revenue and is responsible for the tax system which is at the very centre of our whole productivity agenda, indeed at the very centre of the small business agenda,” Turnbull told AFR. “It is vital we have a tax system that is fair, efficient and creates the right incentives so that we can get the gains in productivity we need.”
What this means for the existing plans to remove the low-value tax threshold on online purchases from overseas, a policy widely attributed to the outgoing Hockey and Frydenberg, remains to be seen, but as it stands the Turnbull Government will be carrying this policy to next year’s federal election. Also likely to be on the table is Turnbull’s own recommendation of applying the GST to online advertising sold to Australians.
Something else that may be revisited under the new regime are proposed changes to the Competition Act, suggested by former Small Business Minister Bruce Billson but knocked down by the Abbott Government. The changes, which would have seen an effects test put in place to restrain big businesses from abusing market power, had the support of the Australian Retailers Association, the Council of Small Business Australia, and other local retail bodies.
“The ARA supports the introduction of an effects test to ensure all Australian businesses have the ability to be competitive,” said ARA Executive Director Russell Zimmerman, as part of an ARA press release. “An effects test would ensure the landscape remains viable for small and medium business, as well as the major corporations.”
Communications Minister: Mitch Fifield
Taking PM Turnbull’s place as Communications Minster is Mitch Fifield. Fifield also assumed responsibility of the Arts portfolio from George Brandis, who remains Attorney General and now leads the Turnbull government in the Senate.
Commentators noted that Turnbull’s tenure was something of a poisoned chalice for the new PM. Under Abbott the government scrapped the popular fibre-to-the-premises NBN plans for its own cheaper network that utilised existing copper wiring, a move widely unpopular amongst the tech-savvy public that left Turnbull hamstrung. Turnbull also received the political blame for the Abbott government’s data retention laws, which were largely in Brandis’ court as Attorney General. With a new direction in sight for the Turnbull government, it may fall to Fifield to make these controversial policies more friendly to the public.
“While the initiatives spearheaded by Brandis are here to stay, there are earnest calls from a number of parties for the acts to be reviewed and perhaps tweaked to minimise their adverse impact on the industry and consumers,” wrote The Australian this morning.
Whether Turnbull, considered more progressive and tech-savvy than Abbott and having himself made his fortune in communications, will now offer Fifield the leeway to improve upon the government’s plans for the NBN remains to be seen. That said, faster, more consistent access to the Internet would be a boon for online shoppers and retailers alike, as well as allowing for the development of new omnichannel strategies for bricks-and-mortar retailers.
Ultimately, however, the ramifications to online retailers will depend on just how radically the Turnbull government’s policies will depart from those of the Abbott government, more than a changing of the guard in the Cabinet. In his victory speech last week Turnbull referenced the need for the Australian economy to become more ‘agile’, which is a promising notion for online traders; only time will tell whether Turnbull can also walk the talk.