The federal government has pledged $100 million to the Australian Business Growth Fund, but there are some notable absences which may work against the initiative's success.
As reported earlier this week, the Morrison government has announced plans to launch an Australian Business Growth Fund, with the intention to help businesses with turnovers of between $2 million and $50 million get access to finance.
Although support for the SME community's funding struggles was welcomed, scepticism continues about the effectiveness of the fund.
For example, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, questions the absence of commitment from major players in the financing and business support space for SMEs.
“We support government investment of $100 million into the Australian Business Growth Fund and a matching commitment by the Commonwealth Bank of Australia, National Australia Bank and HSBC Bank," she said.
“However, we question the absence of commitment by Westpac, ANZ and Australia’s super funds," she said.
This follows concerns from the Institute of Public Affairs (IPA), which said the red tape hurdles the SME community face should be a principal priority in supporting operational costs for SMEs.
“Small business growth in Australia requires less red tape, not another taxpayer-subsidised, government-run scheme,” said Daniel Wild, director of research at the IPA.
“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," he said.
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