ASBFEO Highlights Business Investment Barriers in House of Reps Hearing
(7 August 2018 - Australia) The Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, highlighted opportunities at all levels of government and within the business community to support business investment in a public hearing into impediments to business investment at Parliament House today.
Appearing before the House of Representatives Standing Committee on Economics, Ms Carnell emphasised one of the greatest impediments to investment by small businesses is the lack of access to affordable capital. This factor is detailed in ASBFEO’s Affordable Capital for SME Growth inquiry report and the Barriers to Investment research conducted jointly with the Department of Treasury. Other issues discussed in the hearing included regulation and red tape, government innovation, payment times, the accelerated depreciation instant asset write-off provision and energy affordability.
“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” stated Kate Carnell. “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. 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.”
“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.”
The instant asset write-off is suggested to be embedded in legislation in addition to the raising of the threshold to at least A$100,000 from the current limit of A$20,000 currently offered.
“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.”
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