As Robert Menzies famously once said, we are “a nation of lifters, not leaners”. Time and time again, we have seen Australian small businesses come up with the best ideas, the best products and employ the best talent to really get the job done. As any small business owner knows, there is nothing more important to our local economy than the ability of the little guys to push back and carve out their own space. But now we need the government to play ball.
The environment for small businesses in Australia has grown increasingly difficult.
Restrictive regulations and high taxation combined with the usual issues of irregular cash flow and the struggle of raising capital has meant that most Australian small businesses spend their time surviving rather than thriving.
When you look at the Australian Government’s commitment to SMEs in comparison to other nations like the UK, it is clear that there is more to do before our business landscape takes on a healthy glow.
Recently, the UK Government introduced four initiatives to alleviate ongoing funding stress for their small business constituents.
• The Funding for Lending Scheme (where the Bank of England provides banks with cheaper funding than they can arrange in the capital markets and the benefits are to be passed onto small business).
• The National Loan Guarantee Scheme (Treasury backing allows commercial banks to borrow more cheaply in the world’s wholesale money markets, with benefits again to be passed onto small business).
• The Business Bank (making more finance available to SMEs).
• Business Finance Partnership (increasing supply of funding through alternative and non-bank lending channels).
Each of these programs has been highly successful in increasing access to much-needed finance and stimulating the economy from the ground up. By easing the channels for entrepreneurs to access the capital they need to grow and thrive, the business environment has significantly improved and confidence has returned.
Meanwhile, in Australia, there is very little to compare these efforts with. While the UK has proposed real, measurable ways to improve SME owners, our government has some catching up to do. What we are lacking is a coordinated national approach. Years ago Churchill said, ‘Give us the tools and we’ll finish the job.’ Our businesses need the tools to get the job done. Small business is not looking for handouts, but rather supporting lending policies that enable them to pull themselves out of a hole.
The challenges facing SMEs were widely discussed as part of the election campaigns of each major party, but we have not yet seen anything close to the support the UK gives its economic backbone. Changing the budgetary priorities could provide relief for many Australians and absolutely change the business environment for the better.
It is my hope that the government makes improving small businesses a priority. Taking note of the UK Government’s rollout of better business strategies could be the first step.
Excerpted from an article originally published in the February/March 2014 issue of Think & Grow Rich Inc. magazine. If you are a subscriber to Think & Grow Rich Inc. magazine, you will receive this article in your February/March 2014 issue of TGR. If you are not a subscriber, click here to subscribe.