06 August 2018
Ombudsman to discuss impediments to business investment at House of Reps hearing
In a public hearing into impediments to business investment at Parliament House tomorrow, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, will highlight a number of opportunities that all levels of government and the business community can employ to support business investment.
Appearing before the House of Representatives Standing Committee on Economics, Ms Carnell will emphasise one of the greatest impediments to investment by small businesses, which is the lack of access to affordable capital as detailed in ASBFEO’s Affordable Capital for SME Growth inquiry report and the Barriers to Investment research conducted jointly with the Department of Treasury.
“Our focus will be on lending at affordable interest rates over a term of five years or more, quick approval following application and where loan repayments are met, the lender cannot change the conditions of the loan.”
Other issues to be covered in the hearing include:
“We will explain how small business views Government as one body, and as such, government should only ask once for information and share with relevant agencies as appropriate, to reduce red tape,” Ms Carnell said.
“The Easy to do business project in Parramatta is a perfect example of red tape reduction. New businesses fill out one form using an online system that distributes relevant information to local, state and Commonwealth agencies, to create the business and licence its operations. In our Barriers to Investment research report, we recommended this approach be replicated by other states and territories across traditional industry sectors.
“Governments need to review their 12 to 18 month innovation programs, as it can take small businesses years to commercialise. When you take into account research, prototypes and testing, SMEs need longer term solutions for both debt and equity finance.
“When streamlining compliance, governments also need to co-fund and educate small businesses adopting new technologies. For example, the single touch payroll system to be introduced to small businesses with 19 or less employees on 1 July next year will come at a cost in time and money in purchasing appropriate software.
“Small businesses that don’t have an up-to-date electronic wage system will have to upgrade and the small business owner will have learn how to use it.
“We welcome the government’s commitment to mandate 20 calendar day payment terms by July 2019 for contracts up to $1 million, and recommend legislation be introduced for 30 day or less payment terms for all small business to business transactions.
“We also want legislation around the disclosure of payment times and performance by businesses. This increased transparency would have the potential to increase accountability by larger businesses.
Fair Work Act
“At the hearing we will raise that a key impediment for growth is the complexity to employ staff. Small business owners can’t identify the correct award, are concerned they will not comply with the Fair Work Act and are fearful of horror stories around unfair dismissals.
Instant asset write-off
“We will speak about embedding the instant asset write-off in legislation and raising the threshold to at least $100,000. This initiative is important to their ability to continue to invest in their small business. Equipment used by some small businesses, including farmers, cost a lot more than the $20,000 currently on offer.
“Energy affordability is also a major concern. Energy price hikes can really affect small businesses as they pay higher rates than households and use more energy, particularly those in manufacturing and hospitality. It can also lead to small business closures and job losses.
“Governments need to empower businesses to invest, and there are a number of ways in which they can do this which in turn provides the opportunity for small businesses to prosper, grow and create jobs.”