Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Small Business, Independent Contractors and the Service Economy. Will the minister advise the House of the current situation on the availability of finance for small business?

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank the member for Makin for his question and for the great work he does with both the Tea Tree Gully Business Enterprise Centre and the other business enterprise centre in his local area, the Salisbury Business and Export Centre. It is stating the obvious, I guess, to say that the world is in the grip of a serious financial crisis, and it is usually small businesses that are among the first to be affected by a credit squeeze. I had discussions with members of the financial community late last week and the situation as of that time was as follows. They told me that finance is still generally available to small businesses that have credit facilities with major banks. In that respect, at least, it is business as usual for many small businesses.

In respect of finance for expansions such as office upgrades, a few months ago that sort of finance was readily available; it is now more difficult to obtain, though I am advised that, if a very good case is made, the finance is still available. This was the situation before the Prime Minister announced sweeping measures to guarantee bank deposits and to inject more capital into the system. It is therefore to be expected that these initiatives will improve the availability of finance to small businesses. While no-one can predict the course of the financial crisis over the coming days and weeks, the government will continue to monitor the situation and keep in touch with both major financiers and small business organisations. We are very proud of the hard work and enterprise of Australia’s 1.9 million small business owners. I urge the major banks to join with Westpac and pass on the maximum possible amount of the recent one percentage point reduction in the Reserve Bank’s cash rate, and I urge the major banks to maintain the flow of finance to small businesses, who, after all, are responsible for providing jobs for almost four million working Australians.