Tuesday, 2 August 2022
Social Security and Other Legislation Amendment (Self-Employment Programs and Other Measures) Bill 2022
The Social Security and Other Legislation Amendment (Self-Employment Programs and Other Measures) Bill 2022 seeks to amend social security law and related elements of veterans and family laws. This is to make clear the law operates in the same way when participants access self-employment services through the Self-Employment Assistance program as through the New Enterprise Incentive Scheme. They're subtle but important changes to ensure services are streamlined and support is available to people engaged in self-employment and small businesses across Australia.
We can all appreciate the importance of small business to the Australian economy, communities and families. There are around 2.4 million small businesses actively trading and employing around 4.7 million people. Self-employed people take many familiar forms. They could be a writer, a photographer, a hairdresser, an accountant, a landscaper or a lawyer. Self-employment is an alternative to traditional employment and offers Australians the opportunity to use their skills to succeed. It gives Australians freedom to use their existing experience and skills to work in an environment of their choice. Our government recognises the importance of this choice and the support needed to foster that choice.
Self-employment also helps Australians who struggle to apply their skills in other labour market settings, to use those skills and succeed in their area of employment. That's why people, especially those with a disability, who still face significant challenges in having their skills recognised by employers, are more likely to be self-employed than the general population in Australia. Whether it's an Indigenous artist based in the Northern Territory or a cafe owner in Sydney, self-employment provides an invaluable opportunity for Australians to pursue their passion and find meaningful work that is valuable to themselves, their family, their community and the Australian economy. It's really why this bill is so important. It will give self-employed Australians confidence that there is clear and consistent treatment of income tested support within the relevant legislative frameworks. The significance of this support cannot be understated.
The Labor Party has a strong history of supporting new small businesses and self-employment. It was the Hawke government that launched the New Enterprise Incentive Scheme, or NEIS program, in 1985 to help unemployed Australians create their own employment opportunities. Since then, NEIS has successfully helped around 200,000 Australians to start and run their small businesses. The program provided small business training and 12 months of personalised mentoring to support Australians to start viable small businesses. The Self-Employment Assistance program today builds on the success of NEIS and its legacy through additional and more tailored services that allow participants to choose what support they need for their small business.
The amendments will help make sure the same support made available under NEIS will continue to support people in the Self-Employment Assistance program today. Both Self-Employment Assistance and the Entrepreneurship Facilitators program give participants the tools that they needed to create their own business and earn an income to achieve financial independence, with fewer traditional jobs available and an increased number of job-ready seekers on the employment services caseload. Self-Employment Assistance offers flexible services to help people who are interested in becoming self-employed and people who are existing microbusiness owners, and it's delivered by small business specialist providers in 51 employment regions across Australia. The involvement of self-employment support and associated reforms has become farther-ranging and more inclusive since the beginnings of the NEIS almost 40 years ago.
In 2012, concurrency for disability employment services participants was introduced to the program. This allowed disability employment services participants to continue to have access to specialised disability support while also accessing specialised small-business support from the NEIS provider. Australia's disability strategy 2021-2031 recognises the crucial role of self-employment and business ownership and increasing employment a disability. Self-employment creates opportunity amidst the labour market disadvantages faced by people living with a disability. In fact, individuals with a disability already had a higher relative rate of business ownership than those without a disability. Australia's disability entrepreneurial ecosystem: experiences of people with disability with microenterprises, self-employment and entrepreneurship, a joint report from the University of Technology Sydney, National Disability Services, Settlement Services International, and Break-Thru People Solutions, published in 2020, found that people with a disability were 40 per cent more likely to be self-employed.
In 2016, the high-disadvantage trial was also introduced to provide additional support for more Australians engaged in self-employment. This trial targeted a range of disadvantaged cohorts such as migrants, people with a disability and those from culturally and linguistically diverse backgrounds. In 2018, the high-disadvantage trial was amended to focus on assisting migrants and refugees, and NEIS providers could access these places on and an as-needed basis.
In 2019, Entrepreneurship Facilitators expanded to 23 regions across Australia, broadening eligibility to anyone wishing to start their own business. A year later, eligibility to access NEIS was also amended to support part-time businesses to assist those with caring responsibilities or working part time with accessing support to create their own income through self-employment. It also supported existing microbusinesses impacted by COVID-19 with accessing support to pivot their businesses to remain viable. In July last year, veterans transitioning out of the Australian Defence Forces, and their adult family members, were able to access workshops and commence NEIS training while still in the ADF to explore self-employment while still employed. Strong demand for support emerged during COVID-19, when there were fewer traditional jobs available and many jobseekers sought to create their own job by starting a small business. NEIS, or new business assistance with NEIS, ended on 30 June this year, replaced with the new Self-Employment Assistance program, which supports more tailored servicing and participants choosing which services they need to access to support their self-employment journey.
I would also like to share some of the personal stories of this program. Participants value the space, the self-employment program creates to help them develop their ideas and learning critical foundational skills like bookkeeping and connecting with mentors. The program also creates a safety net for those just starting out, allowing them to start earning income from their new business while NEIS allowances are paid. Participants can also receive income from outside the business, such as from investments or other work, while receiving assistance. Successful NEIS alumni include singers, comedians, web designers, music venue developers and artisan ice-cream makers.
I want to bring to the Senate a fantastic story from the Northern Territory. It's one of almost 200,000 coming from the NEIS, which really humanises the importance of good policy in small-business support. In 2012, Holly Copping opened the doors to the Territory Laser Clinic. Established while participating in the NEIS program, the Territory Laser Clinic offers a range of treatments, including those related to acne, acne scarring and tattoo removal. Having experienced acne from the age of 12, Holly wanted to ensure no-one struggled with the same issues that she did, and she became the Northern Territory's first qualified dermal therapist. Holly enjoyed using her knowledge and expertise to change people's lives.
While participating in NEIS, Holly was nominated for two regional awards and was awarded the National NEIS Association's award Best New Business in 2013. She became the first Northern Territory business to win the award. Holly was presented with the award by the Deputy Chief Minister of the Northern Territory, which was a very special moment for her. I want to put into Hansard Holly's quotes, when she reflected on how far that program had taken her and where it actually took her. Holly said:
I can honestly say that the NEIS programme is 100 per cent worth the effort. The advice and coaching I received was invaluable. Monthly mentoring and quarterly visits ensured that I monitored the growth of my business, and the financial support was amazing to say the least. I can highly recommend this programme to anyone who has a new business idea.
That was Holly Copping when she received her award.
It's, really, individual stories like this that show us the real impact that business support has on people's lives, particularly when it comes to self-employment and fostering small business. Small businesses are the backbone of many communities across Australia. Small business and those with fewer than 20 employees comprise around 98 per cent of all business operating in the Australian economy. And, as I said previously, they employ around 4.7 million people or around 41 per cent of the business workforce. Small business is diverse, operating in every industry and region, attracting a range of different owners and employees, and can be highly agile and adept at responding to areas of the economy that are experiencing growth. Small business is continuously entering and exiting the Australian economy.
As at 30 June 2021 there were around 2.4 million actively trading businesses in the Australian economy. Within this landscape, around 360,000 new businesses entered the economy and around 270,000 businesses exited. Small businesses are particularly significant employers in the agriculture, forestry and fishing, rental, hiring and real estate, construction and professional, scientific and technical services sectors. So while the industry mix changes over time, the most common sectors for new NEIS businesses are hospitality, retail trade, transport and logistics, and professional services.
Self-employment programs, such as Self-Employment Assistance and the Entrepreneurship Facilitator, have a role in helping people create new small businesses and ensuring people who start in these businesses have the ability and knowledge to survive, thrive and grow. There was a significant increase in self-employment seen through COVID due to the lack of traditional jobs available, which is perhaps another demonstration of the importance of flexibility in self-employment and associated programs.
There will be $843 million available over five years, from 2021-22, for self-employment services, and this is an absolutely critical investment. Self-Employment Assistance overall is a more flexible and tailored program and allows participants to access the service components in any order, based on their individual needs. Self-Employment Assistance providers have a greater role in promoting self-employment opportunities as well as promoting the program in their local regions to the broader community as well as key stakeholders.
These important changes streamline the delivery of services, increase referrals to self-employment and reduce duplication. The bill, as part of schedule 1, will also ensure that, if Self-Employment Assistance is given a different name, the family, social security and veterans' entitlement laws will continue to operate in the same way. Whether you are a veteran, a young person, a refugee or a single mother with caring duties, it's important that we as parliamentarians extend our support to self-employed Australians who need it.