Prime Minister Scott Morrison has announced plans to introduce a small business growth fund, but it’s been met with scepticism from some quarters.
Earlier this week, the Morrison government announced plans to launch an Australian Business Growth Fund, with a view to help SMEs with annual turnovers between $2 million and $50 million get access to finance.
The government projects that the fund, worth $100 million, will assist 30 to 50 businesses each year.
Square peg, round hole
While a funding boost is welcome, industry lobbyists believe other options, like cutting red tape, would be an effective move for the small business community.
“Small business growth in Australia requires less red tape, not another taxpayer-subsidised, government-run scheme,” said Daniel Wild, director of research at think tank the Institute of Public Affairs.
“Red tape and a rigid industrial relations system are the key reasons why new business investment in Australia is just 11.5 per cent, which is lower than it was during the economically hostile Whitlam years.
“The best way to boost small business growth is to cut red tape and reduce government interference.
“Government-backed finance schemes have a history of failure, from Fannie Mae and Freddie Mac in the United States to Tricontinental in Victoria.”
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