SME’s are being starved of critical funds to grow their business and create more jobs because of red tape and other disincentives to invest in them. So what are these bureaucratic brick walls and what can we do to knock them down?

Small business in Australia is over governed. There are too many regulations and current tax laws make directors personally liable for company debt. This risk puts off major investors and investment restrictions are a turn off to smaller potential shareholders.

Furthermore, potential investors who seek professional advice on their options are steered away from SMB’s because of the financial industry’s fear of being sued for exposing a client to this risk.

So what about government funding? There are grants available but again red tape and restrictions mean that it’s too hard and takes too long for SME’s to take advantage of.

The SBAA was recently invited to make a submission to the Federal Government on business investment for SMB’s. It calls for urgent, major policy changes.

The association wants a return to limited liability for private companies and a simple structure that attracts investment. It’s also called for a reduction in regulations and a more streamlined system for investing in SME’s. In other words it wants policies that encourage Aussie entrepreneurs to “have a go”.

For more information visit SBAA White Papers

Written by

Lionel Barden

Small Business Policy Chair

Small Business Association of Australia

Small Business is the backbone of most contemporary economies including Australia’s, and as a sector plays an important role at the base of domestic business activity. Even in the largest economies they make an impact. In Australia small businesses account for;

• • 96% of the 2.2 million trading business in Australia are SME’s,
  • is the largest employing sector of over 4.5million persons,
  • small companies deliver over 40% of Australia’s GDP.
  • in 2013-14 Australians started over 280,000 small businesses, AND
  • it is small business that are the innovators.

Small business is such an important sector it needs its small business minister in Cabinet to ensure a focus is maintained to help the sector to grow, employ and contribute to the nations trading cash flows. This is vital if we are to create an overall bottom-up recovery at the base and which reverses the present deflationary cycle.

The recent changes by the Turnbull government which saw the ministry position downgraded will do small businesses a disservice and in turn the Australian economy during these uncertain times. It also sends the wrong message as to how it views small business and also creates a lack of confidence.

Prepares by Small Business Association of Australia