Wednesday, 17 March 2021
Matters of Public Importance
There is a clear need for this government to explain how rebadging this inadequate loan scheme will be good enough for the tens of thousands of struggling small businesses that are indeed staring down the barrel of JobKeeper cuts on 28 March. This is the government's third attempt at its SME loans scheme, a scheme that has already proven not to be working. The Treasurer has said that it will help small businesses to stand on their own two feet as we recover. However, what we see here is a government that's prepared, really, to push small businesses in Australia further into debt. We know that financing and access to finance are important, but we also know that this lumpy response—this particular solution—which has been given by the government, which they've been pushed into doing, isn't working particularly well so far. Indeed, I can't see it playing a meaningful role, given the government's inadequate explanation of its role.
The Treasurer is being disingenuous. He says it's about small businesses standing on their own two feet when the government is stimulating their activity by pushing them into greater debt. The government is guaranteeing a higher proportion of the loan—the fifty-fifty split with banks shifts to an 80-20 split—but, as we know, taking on more debt will only be good if you can pay it back. While holidays from debt repayments et cetera can be important, they simply do not lift the economic burden off these small businesses in a way that's meaningful. Nothing more is being done for small businesses than allowing them to be pushed into more significant debt. There's no direct funding support anymore with the end of JobKeeper.
Why is this unpopular and inadequate scheme being extended? The government promised some $40 billion in small-business assistance, but the government has confirmed in its own figures that only $3 billion has been lent under the existing scheme over the last year. We know that the revised scheme opened in October and extended the loan terms and loan size, and that only 39 lenders signed up, and the second version has only 44 lenders signing up. Since the revised August scheme to 20 January this year there have been fewer than 3,000 new loans, worth less than $300 million under the new terms. We know that JobKeeper is being cut on 28 March; the Morrison government is cutting this direct support and asking small businesses to take on further debt to continue to employ people from an already grossly undersubscribed scheme.
I think the government needs to be seen as pointing to something that it's doing. It will say, 'Oh, we've got this loans scheme as we end JobKeeper.' What we also know is that, with JobKeeper ending, the JobSeeker rates are also now heading right back down—pretty much to what they were before. This is not economic stimulus for our nation and it's not wage growth for our nation, which would see small businesses benefiting from boosted consumption in our nation.
In the Labor Party, we have made every effort to help small businesses and will continue to do so. We want this version of the scheme to work better than the last, but we believe very strongly that we also need direct support. What the government is offering is not a lifeline for small business; it's a death sentence. Small businesses and their workers deserve a real plan from this government, a comprehensive plan to help them through this health pandemic that's limiting economic activity in our nation, not a promise of more debt. The Reserve Bank governor has predicted some job shedding once JobKeeper ends and, of these workers and employees of businesses and, indeed, these very businesses, there are many that simply won't make it. They'll be on this manifestly inadequate JobSeeker amount. A third version of this unpopular scheme is simply not good enough— (Time expired)