Division Description Changes — Bills — Australian Business Growth Fund Bill 2019; Second Reading — 6th Feb 2020

Change	Division
representatives vote 2020-02-06#5 Edited by mackay staff on 2020-02-07 13:44:05	Title Bills — Australian Business Growth Fund Bill 2019; Second Reading Australian Business Growth Fund Bill 2019 - Second Reading - Criticism of Government Description ~~<p class="speaker">Melissa McIntosh</p>~~ <p>When the Morrison government talks about backing small businesses and creating jobs, what follows is considered measures to enable Australians to unlock their potential, expand their business and employ more people. The Australian Business Growth Fund Bill 2019 will fill the gap in the equity market that leaves entrepreneurs and small and medium-sized business owners unable to reach their growth potential. There are almost 15,000 small and medium-sized businesses in my electorate of Lindsay, and I want to see each and every one of those able to achieve their goals. The Morrison government is implementing policies to enable just that.</p> <p> <i>(Quorum formed)</i> I want to ensure that every single one of those almost 15,000 small and medium -sized businesses in my electorate of Lindsay can reach their potential, and the Morrison government is implementing policies to enable just that.</p> The majority voted against an amendment to the usual [second reading](https://www.peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) motion, which is that the majority agree to read the bill for a second time - parliamentary jargon for agreeing with the bill's main idea. ### Amendment text > "whilst not declining to give the bill a second reading, the House: > *> (1) notes the Government's lack of adequate public consultation in relation to the Australian Business Growth Fund;** and* > *> (2) further notes that the G*overnment has failed to support the economic climate faced by small and medium sized businesses, with the economy deteriorating well before the bushfire crisis and the coronavirus outbreak hit". <p>Access to capital can be a barrier for small and medium businesses trying to grow, while entrepreneurs often struggle to receive the capital required to conduct their day-to-day trading activities. What these businesses need is access to something called 'patient capital'. The Reserve Bank and the Australian Small Business and Family Enterprise Ombudsman have both identified the lack of a long-term patient equity capital market in Australia. The Morrison government has taken this on board. We will explore every opportunity that seeks to back Australian small, medium and family businesses, and entrepreneurs in both metropolitan and regional Australia.</p> <p>Established Australian businesses will be eligible to apply for equity capital investments between $5 million and $15 million. Small-business owners will not have to give up control for this investment and nor should they. The Business Growth Fund's investment stake will range from 10 to 40 per cent, striking the balance between business owners keeping control of their business while providing sufficient incentives for investors, backing small businesses to grow and attract investors. This is what is the Business Growth Fund has been designed to achieve.</p> <p>Having run my own small business, I know just how important this fund will be to support small-business owners as they look to take that next step. Initially, the Business Growth Fund could support 10 investments per year, with the aim to increase to 30 per year as the fund develops. We expect to see banks and superannuation contributions to see the fund grow to $500 million.</p> <p>The Business Growth Fund will be based on similar successful models that are in existence in both the United Kingdom and Canada. It will undertake minority equity investments in small and medium enterprises that have demonstrated growth potential. It will be a patient investor, holding long-term stakes in small and medium enterprise and offer managerial support to the business owners to navigate their next step and fulfil their potential. It is important in this process that we provide the necessary support and advice to business owners so they can sustain their growth.</p> <p>As Liberals we believe in Australian businesses. We want to see government supporting local small and medium businesses but not getting in their way, because when Australian businesses are strong our workforce is strong. In December 2019, labour force statistics demonstrated that there are more Australians in work than ever before. From the start of last year to December 2019, employment rose by an average of 2.1 per cent, which was higher than the decade-average growth rate of 1.8 per cent. These statistics show that the measures the Morrison government is implementing are supporting aspirational Australians. We've already implemented policies to back small businesses—delivering tax relief, extending the instant asset write-off, incentivising more businesses to expand and employ more people—but we won't stop there. The Business Growth Fund is yet another measure to back small and medium businesses, to fuel the engine room of our economy and to create more jobs.</p> <p>It's an exciting time for small and medium-sized businesses in my electorate of Lindsay. The Morrison government's investment in Western Sydney and the Western Sydney international airport is unlocking the potential for business growth in my community. We are creating industries and attracting emerging industries in our region, backing Australian businesses and creating local jobs. Eligible entrepreneurs and small and medium-sized businesses in these emerging industries in Western Sydney will now be able to access the capital they need to expand their business opportunities. I am passionate about local jobs and about the future of these emerging industries, particularly coming with the development of the airport and aerotropolis. This fund will give local small and medium-sized businesses the chance to grow and expand. As businesses in my community are able to grow, I want to see more and more local jobs and more local people taking advantage of those jobs. That's why on Friday this week I'll be hosting a jobs fair in Penrith, so we can connect local employers and businesses with jobseekers.</p> <p>The Business Growth Fund is yet another example of another supportive measure. It's providing advice to business owners so that they can take these next steps to success. I am proud to be part of a government that will continue to explore innovative and world-leading initiatives to back small and medium-sized Australian businesses.</p> ~~<p class="speaker">Matt Keogh</p>~~ <p>Since coming into the shadow portfolio of minister assisting for small and family business, I've had the opportunity to travel all over the country to meet with small and family-sized businesses—Darwin, Hobart, Gosnells, the Central Coast of New South Wales, Katoomba and Melbourne—and discuss what government can do to help them, to understand what is confronting them in their lives and in their businesses. And whilst they have raised many issues that are quite specific to their industry or their town or city, or the businesses in which they operate, there are some commonalities. One of the biggest commonalities that comes up time and time again is access to finance, particularly getting access to capital. It's hard for small and family businesses to get off the ground or to find that necessary finance to expand, especially when they're being forced into the situation of having to put up their own home as security. After all, you wouldn't feel that secure if your business or your home, and especially not both, was at risk of being lost in the current economic circumstances.</p> <p>The Council of Financial Regulators tells us that lending to small business has hardly grown over the past year. In November last year, they reported that lending to small businesses has hardly grown over the past year, compared to a five per cent increase in lending to large businesses. One of the consequences of anaemic wage growth in our country that we're seeing under this government is there is no money flowing into small businesses around Australia. I've heard this frequently on the high streets around our country: there is no income for people to spend in their shops.</p> <p>Small businesses and their representatives tell us frequently that banks are not lending money to small business and the life support that this country's economy is currently relying on means that people are holding onto money; they're not spending. So even if small businesses are able to get off the ground, it's difficult to survive, let alone expand. The banks tell us that they're not doing anything to throttle the small businesses of our nation, they're not restricting access to capital, but we are now in a circumstance where it's time for them to put their money where their mouths are.</p> <p>The Australian Business Growth Fund Bill 2019, by all intents and purposes, should be a step in the right direction with regard to supporting small and medium enterprises around Australia. Small and medium businesses, after all, are a huge proportion of our businesses across the nation, with about 3 million SMEs across the country employing over seven million Australians. For years, the sector—specifically, the Small Business and Family Enterprise Ombudsman—has been crying out for assistance for small business in getting access to finance. That's why they've championed the Business Growth Fund model that is before us today. Because these businesses need help, they need our support, and, frankly, in the current circumstances that confront so many areas of our nation that are dealing with the tragedy of bushfire, they need even more. Labor absolutely wants to see small business across our nation grow and thrive, and that's why we will support this legislation in this place.</p> <p>But we do also want to be sure that this fund will work properly, in order to best benefit commercially viable small and medium enterprises who legitimately need finance but are unable to access it now. Questions must be asked about such legislation when only four days of consultation were provided in relation to it. You would think that if this government were serious about getting this legislation right and making sure that it actually delivers on its promise more time for consultation would have been provided.</p> <p>Frankly, the engagement that the Treasurer has had with relevant stakeholders has been woefully inadequate. As with any piece of legislation within the economic realm, the devil is absolutely in the detail, and we don't have all of that detail in front of us. The government has not publicly provided sufficient detail on the governance and operation of the fund. The fund will not be in a Commonwealth business enterprise or a Commonwealth company and nor will it be within the public service, but it will be an incorporated company, meaning that the Commonwealth will end up as a minority shareholder in a private company. The fact that this is a private company—not a government business enterprise, which brings with it government regulation and oversight—raises questions about how the Commonwealth and the banks will end up working together for this common purpose. This is difficult to determine, given that there has not been any demonstration of the mandate that will govern the fund.</p> <p>A short Senate inquiry will of course provide an opportunity to get clarity on the mandate and the government's arrangements for the fund. It will also ensure that anything that is required to guarantee the success of this program can be done. It's our prerogative as a parliament to ensure the success of this fund and to properly oversee any proposals. Frankly, small and medium enterprises across the nation are relying on us to do that with this legislation.</p> <p>We are still waiting on promised reform to support small businesses in so many different areas from this government, whether it's unfair contract terms, fair payment times, dealing with the unfairness of the current franchising regimes or, indeed, phoenixing. So we want to ensure that at least this initiative before us today will come into effect as soon as possible and operate as it is intended, to make sure that we have this positive benefit that small and family business is so desperately crying out for right now, and that's why we're happy to support the legislation in this place.</p> ~~<p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>~~

~~Melissa McIntosh~~
When the Morrison government talks about backing small businesses and creating jobs, what follows is considered measures to enable Australians to unlock their potential, expand their business and employ more people. The Australian Business Growth Fund Bill 2019 will fill the gap in the equity market that leaves entrepreneurs and small and medium-sized business owners unable to reach their growth potential. There are almost 15,000 small and medium-sized businesses in my electorate of Lindsay, and I want to see each and every one of those able to achieve their goals. The Morrison government is implementing policies to enable just that.
 (Quorum formed) I want to ensure that every single one of those almost 15,000 small and medium -sized businesses in my electorate of Lindsay can reach their potential, and the Morrison government is implementing policies to enable just that.
The majority voted against an amendment to the usual [second reading](https://www.peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) motion, which is that the majority agree to read the bill for a second time - parliamentary jargon for agreeing with the bill's main idea.
### Amendment text
> *"whilst not declining to give the bill a second reading, the House:*
>
> *(1) notes the Government's lack of adequate public consultation in relation to the Australian Business Growth Fund; and*
>
> *(2) further notes that the Government has failed to support the economic climate faced by small and medium sized businesses, with the economy deteriorating well before the bushfire crisis and the coronavirus outbreak hit".*
Access to capital can be a barrier for small and medium businesses trying to grow, while entrepreneurs often struggle to receive the capital required to conduct their day-to-day trading activities. What these businesses need is access to something called 'patient capital'. The Reserve Bank and the Australian Small Business and Family Enterprise Ombudsman have both identified the lack of a long-term patient equity capital market in Australia. The Morrison government has taken this on board. We will explore every opportunity that seeks to back Australian small, medium and family businesses, and entrepreneurs in both metropolitan and regional Australia.
Established Australian businesses will be eligible to apply for equity capital investments between $5 million and $15 million. Small-business owners will not have to give up control for this investment and nor should they. The Business Growth Fund's investment stake will range from 10 to 40 per cent, striking the balance between business owners keeping control of their business while providing sufficient incentives for investors, backing small businesses to grow and attract investors. This is what is the Business Growth Fund has been designed to achieve.
Having run my own small business, I know just how important this fund will be to support small-business owners as they look to take that next step. Initially, the Business Growth Fund could support 10 investments per year, with the aim to increase to 30 per year as the fund develops. We expect to see banks and superannuation contributions to see the fund grow to $500 million.
The Business Growth Fund will be based on similar successful models that are in existence in both the United Kingdom and Canada. It will undertake minority equity investments in small and medium enterprises that have demonstrated growth potential. It will be a patient investor, holding long-term stakes in small and medium enterprise and offer managerial support to the business owners to navigate their next step and fulfil their potential. It is important in this process that we provide the necessary support and advice to business owners so they can sustain their growth.
As Liberals we believe in Australian businesses. We want to see government supporting local small and medium businesses but not getting in their way, because when Australian businesses are strong our workforce is strong. In December 2019, labour force statistics demonstrated that there are more Australians in work than ever before. From the start of last year to December 2019, employment rose by an average of 2.1 per cent, which was higher than the decade-average growth rate of 1.8 per cent. These statistics show that the measures the Morrison government is implementing are supporting aspirational Australians. We've already implemented policies to back small businesses—delivering tax relief, extending the instant asset write-off, incentivising more businesses to expand and employ more people—but we won't stop there. The Business Growth Fund is yet another measure to back small and medium businesses, to fuel the engine room of our economy and to create more jobs.
It's an exciting time for small and medium-sized businesses in my electorate of Lindsay. The Morrison government's investment in Western Sydney and the Western Sydney international airport is unlocking the potential for business growth in my community. We are creating industries and attracting emerging industries in our region, backing Australian businesses and creating local jobs. Eligible entrepreneurs and small and medium-sized businesses in these emerging industries in Western Sydney will now be able to access the capital they need to expand their business opportunities. I am passionate about local jobs and about the future of these emerging industries, particularly coming with the development of the airport and aerotropolis. This fund will give local small and medium-sized businesses the chance to grow and expand. As businesses in my community are able to grow, I want to see more and more local jobs and more local people taking advantage of those jobs. That's why on Friday this week I'll be hosting a jobs fair in Penrith, so we can connect local employers and businesses with jobseekers.
The Business Growth Fund is yet another example of another supportive measure. It's providing advice to business owners so that they can take these next steps to success. I am proud to be part of a government that will continue to explore innovative and world-leading initiatives to back small and medium-sized Australian businesses.
~~Matt Keogh~~
Since coming into the shadow portfolio of minister assisting for small and family business, I've had the opportunity to travel all over the country to meet with small and family-sized businesses—Darwin, Hobart, Gosnells, the Central Coast of New South Wales, Katoomba and Melbourne—and discuss what government can do to help them, to understand what is confronting them in their lives and in their businesses. And whilst they have raised many issues that are quite specific to their industry or their town or city, or the businesses in which they operate, there are some commonalities. One of the biggest commonalities that comes up time and time again is access to finance, particularly getting access to capital. It's hard for small and family businesses to get off the ground or to find that necessary finance to expand, especially when they're being forced into the situation of having to put up their own home as security. After all, you wouldn't feel that secure if your business or your home, and especially not both, was at risk of being lost in the current economic circumstances.
The Council of Financial Regulators tells us that lending to small business has hardly grown over the past year. In November last year, they reported that lending to small businesses has hardly grown over the past year, compared to a five per cent increase in lending to large businesses. One of the consequences of anaemic wage growth in our country that we're seeing under this government is there is no money flowing into small businesses around Australia. I've heard this frequently on the high streets around our country: there is no income for people to spend in their shops.
Small businesses and their representatives tell us frequently that banks are not lending money to small business and the life support that this country's economy is currently relying on means that people are holding onto money; they're not spending. So even if small businesses are able to get off the ground, it's difficult to survive, let alone expand. The banks tell us that they're not doing anything to throttle the small businesses of our nation, they're not restricting access to capital, but we are now in a circumstance where it's time for them to put their money where their mouths are.
The Australian Business Growth Fund Bill 2019, by all intents and purposes, should be a step in the right direction with regard to supporting small and medium enterprises around Australia. Small and medium businesses, after all, are a huge proportion of our businesses across the nation, with about 3 million SMEs across the country employing over seven million Australians. For years, the sector—specifically, the Small Business and Family Enterprise Ombudsman—has been crying out for assistance for small business in getting access to finance. That's why they've championed the Business Growth Fund model that is before us today. Because these businesses need help, they need our support, and, frankly, in the current circumstances that confront so many areas of our nation that are dealing with the tragedy of bushfire, they need even more. Labor absolutely wants to see small business across our nation grow and thrive, and that's why we will support this legislation in this place.
But we do also want to be sure that this fund will work properly, in order to best benefit commercially viable small and medium enterprises who legitimately need finance but are unable to access it now. Questions must be asked about such legislation when only four days of consultation were provided in relation to it. You would think that if this government were serious about getting this legislation right and making sure that it actually delivers on its promise more time for consultation would have been provided.
Frankly, the engagement that the Treasurer has had with relevant stakeholders has been woefully inadequate. As with any piece of legislation within the economic realm, the devil is absolutely in the detail, and we don't have all of that detail in front of us. The government has not publicly provided sufficient detail on the governance and operation of the fund. The fund will not be in a Commonwealth business enterprise or a Commonwealth company and nor will it be within the public service, but it will be an incorporated company, meaning that the Commonwealth will end up as a minority shareholder in a private company. The fact that this is a private company—not a government business enterprise, which brings with it government regulation and oversight—raises questions about how the Commonwealth and the banks will end up working together for this common purpose. This is difficult to determine, given that there has not been any demonstration of the mandate that will govern the fund.
A short Senate inquiry will of course provide an opportunity to get clarity on the mandate and the government's arrangements for the fund. It will also ensure that anything that is required to guarantee the success of this program can be done. It's our prerogative as a parliament to ensure the success of this fund and to properly oversee any proposals. Frankly, small and medium enterprises across the nation are relying on us to do that with this legislation.
We are still waiting on promised reform to support small businesses in so many different areas from this government, whether it's unfair contract terms, fair payment times, dealing with the unfairness of the current franchising regimes or, indeed, phoenixing. So we want to ensure that at least this initiative before us today will come into effect as soon as possible and operate as it is intended, to make sure that we have this positive benefit that small and family business is so desperately crying out for right now, and that's why we're happy to support the legislation in this place.
~~Long debate text truncated.~~