Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Hansard source

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 small to medium-size businesses through equity funding by the government and partnering financial institutions such as banks and superannuation funds. The fund is based on the model proposed in 2018 by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, and was informed by similar funds that exist in the UK and Canada.

The fund will provide long-term equity capital investments between $5 million and $15 million to eligible Australian businesses where they have generated annual revenue between $2 million and $100 million and can demonstrate three years of revenue growth and profitability. It can only have an investment stake of between 10 and 40 per cent of an eligible business, with SME owners maintaining a controlling interest. The fund itself will not be a Commonwealth company. The Commonwealth will not have a controlling interest in this fund.

Labor strongly backs and supports small and medium-size businesses in Australia. SMEs are an important driver of the economy. There are currently more than three million SMEs, and they employ around seven million Australians. Labor has always supported this bill in principle given the importance of SMEs and the serious challenges they face in accessing finance. As the Reserve Bank, the Australian Small Business and Family Enterprise Ombudsman and others have pointed out, SMEs have faced big challenges in accessing finance in the post-GFC environment. Labor wants to see the fund work effectively with strong governance arrangements and greater operational transparency. We want it to best benefit commercially viable SMEs that need finance but are currently unable to access it. That's why Labor is proposing an amendment to bolster the review mechanism so we can properly assess whether this investment is well targeted and increases SME access to finance. The amendment will ensure the review looks at the impact of this proposal on the demand for equity investments by business, the overall access to capital for small- and medium-sized businesses, the competitive impact of this fund on capital markets used by SMEs and the governance arrangements around the Commonwealth's participation in the fund.

We have also received undertakings from the Treasurer that key operational details of the fund will be made public, including the investment mandate and key governance arrangements. The Treasurer has also provided assurances that the government supports the fund's potential to underwrite investments that are consistent with the investment mandate, which is good for providing broader investor access to SME investment opportunities.

Let's be very clear, this bill will not be enough to turn around the economy that has been floundering on the government's watch well before the onset of the coronavirus and the events of this summer. This bill also doesn't fix the government's failures when it comes to small business. The government has let down small business by failing to act to ensure small businesses get paid on time, delaying any action on unfair contract terms and only taking action to combat illegal phoenixing after ongoing pressure from Labor and after refusing to take action on this issue for years. Whether it is payment times, unfair contract terms or phoenixing, it is clear that the Liberals and Nationals take small business for granted. Labor will continue to hold the government to account to ensure small businesses are not left exposed by this government failing to manage the economy.

Under the Liberals, our 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 six years under the Liberals and Nationals and has substantially deteriorated since the current Prime Minister and Treasurer took over. Even before the bushfire crisis and the coronavirus hit, growth had already slowed since the election and almost halved under the current Prime Minister and Treasurer. Quarterly growth slowed in the September quarter and annual growth was already well below budget forecasts and well below trend. The government's own midyear budget update downgraded growth and wages and said unemployment would rise. The private domestic economy had gone backwards for two quarters, wage growth had been stagnant, consumption was growing at its slowest pace since the GFC and consumer confidence was well below trend. Business investment and productivity were going backwards and household debt and net debt were at record highs. All of these things had occurred before the coronavirus hit and before the recent bushfires. Because of the Morrison government's economic failures, Australia meets the serious challenges and uncertainties of the fire season and the coronavirus outbreak from a position of weakness, not strength. After six years of economic mismanagement under the Liberals and Nationals, Australians are crying out for economic leadership and a plan, but the Morrison government is offering neither.