Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Labor strongly supports small and medium-sized businesses in Australia. We want to see them thrive. They're a critical driver of the economy. Currently, more than three million SMEs employ around seven million Australians. Clearly, they're a crucial part of the economy and we need to give them support where we can out of this building so that they can continue to serve Australians right around Australia, particularly right now, at a difficult time for so many in bushfire-affected communities. Labor does support, in principle, the legislation that is before the House tonight, given the importance of SMEs and the challenges that they face in accessing the finance they need to grow and to employ more people.

As the Reserve Bank, the Australian Small Business and Family Enterprise Ombudsman and others have pointed out, small and medium-sized businesses have faced big challenges in accessing finance, particularly in the post global financial crisis environment. The Australian Business Growth Fund Bill 2019 authorises the government to invest $100 million in a Corporations Act company that will become the Australian Business Growth Fund. The fund itself is intended to increase access to finance for SMEs through equity funding by the government, partnering with financial institutions such as banks and superannuation funds. It's based on the model proposed in 2018 by the Australian Small Business and Family Enterprise Ombudsman, which was informed by similar funds that exist in the UK and Canada.

It's important to note for the House that the bill itself doesn't contain much detail on the operational and governance arrangements of the fund. But what it does do, according to the government, is provide long-term equity capital investments of between $5 million and $15 million to eligible Australian businesses where they've generated annual revenue of between $2 million and $100 million and can demonstrate three years of revenue growth and profitability. The fund can only have an investment stake of between 10 and 40 per cent of an eligible business so that SME owners maintain a controlling interest. The fund itself won't be a Commonwealth company. The Commonwealth will not have a controlling interest in the fund itself.

Labor support this fund in principle, as we've indicated before, including in the previous term of this parliament. We want to see it work properly. We want to make sure that it does benefit commercially viable SMEs that need finance but are currently unable to access it. We do have some concerns, including the fact that the government allowed something like four days of consultation on the draft legislation. We think that, if the government were serious about getting this right and making sure that the $100 million injected by the federal government had every chance of being effective and well invested, they should have, as part of the consultation period, given people more than four days to consider it. I also think the government hasn't provided enough detail on the governance and operation of the fund, and I think it's really important that we clarify that given the government's poor record in recent times—but not just in recent times—when it comes to governance and especially when it comes to integrity.

For these reasons, Labor will support the bill in the House but will seek to refer it to a short Senate inquiry for the purposes of seeking clarity on the governance and operational arrangements of the fund and getting views from stakeholders and experts on how best to implement the fund. We think that this Senate inquiry can happen quite quickly. It needn't hold up some of the other progress that needs to be made in time if the bill does stack up and gets through the houses of parliament, but we think it's important that we allow some of these issues to be aired, discussed and considered, because we don't think the government has given sufficient time for that sort of consultation to date.

We also need to be clear on what the bill doesn't do. The bill won't be enough to turn around the economy, which has been floundering on the government's watch since well before the events of this summer. It doesn't fix the government's failures when it comes to small business. It doesn't fix the fact that the government has let small business down by failing to act to ensure small businesses get paid on time, by delaying any action on unfair contract terms and by taking action to combat illegal phoenixing only after ongoing pressure from Labor after refusing to take action on this issue for years. Whether it's payment times, unfair contract terms or phoenixing, it's clear in my view that those opposite take the small business community for granted. So we will continue to hold them to account to ensure small and medium sized businesses are not left exposed by this government failing to manage the economy in the interests of ordinary communities right around the country. That's why I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes the Government's lack of adequate public consultation in relation to the Australian Business Growth Fund; and

(2) further notes that the Government has failed to support the economic climate faced by small and medium sized businesses, with the economy deteriorating well before the bushfire crisis and the coronavirus outbreak hit".

Under the Liberals—and we've seen it time and time again in recent releases of key economic data—the economy is defined by below-trend growth, stagnant wages, weak consumption, falling business investment and record high net debt. The economy has been floundering for some time now. It has substantially deteriorated since the election. Growth has almost halved since Treasurer Frydenberg took over. Quarterly growth slowed in the most recent quarter. The government's own midyear update downgraded growth in wages and said unemployment was going to rise. The private domestic economy has gone backwards for two quarters. Consumption is at its slowest pace since the GFC and business investment at its slowest pace since the early 1990s recession. The list goes on and on, unfortunately.

In this context it is important that we take steps like the one that we are discussing today. But it's not enough. More needs to be done. Right around Australia, whether it's the calls from the business community or the calls from others such as expert economists, other analysts and peak groups like the AiG, there is a recognition that something needs to be done to turn the economy around. The government needs to plan not just to get through an election by spraying around dodgy grants in marginal seats; it needs an actual plan to get the economy going again and to get wages going so there is some consumption and small businesses can thrive in this country.

What we're talking about today is important in that regard if we get the details right, and the Senate inquiry will help us with that, but more needs to be done to support our small businesses. Part of that is making sure that people have the incomes to spend in the shops of this country so that small businesses get the customers and the business that they need and deserve in order to employ more Australians.

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