Ombudsman slams small business barriers
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has taken aim at the banks and government red tape as significant barriers for small business investment in a new report.
The new report, Barriers to Investment, was released late last week in conjunction with Ombudsman Kate Carnell’s address to the Institute of Public Accountants national congress on the Gold Coast.
Ms Carnell said removing barriers to investment, including access to capital, red tape and energy prices, would give small businesses confidence to grow and boost jobs.
According to Ms Carnell, despite recent claims by bank executives that lending to small firms is booming, borrowers who did not have equity in property were left out.
“Traditional bank loans are backed by real property mortgages and although alternatives are emerging, they are not currently mature and affordable,” said Ms Carnell.
“Young aspiring small business operators are particularly disadvantaged and increasingly rely on their parents to provide seed finance.
“It also raises social equity issues in that the children of affluent parents have greater opportunities to buy and grow businesses.”
Ms Carnell also criticised red tape across the industry, noting that past reduction efforts have largely been “window dressing”.
The report pointed to the unfair compliance burden on small businesses who could not afford to bring compliance specialists in-house, something larger businesses tended to do.
Ms Carnell said a successful pilot project in Parramatta to make compliance requirements seamless should be extended to other areas.
“It was found there were more than 50 pieces of regulation which applied to setting up a hospitality business in Parramatta and that the regulation meant it took up to 18 months to commence trading,” she said.
“Regulation wasn’t removed, but was instead sped up and made invisible. Information provided once was used to automatically complete forms in other areas of bureaucracy.
“This is a smart way of using systems and technology to relieve regulatory burdens on business.”