Ed Husic (Chifley, Australian Labor Party) Share this | Hansard source

On the face of it, there are some in this place, as we heard from the previous speaker, who welcome the opportunity for the injection of these types of funds, the raising of equity in this way for smaller businesses. We've come a long way in this chamber from debating government involvement in the financial services or in the investment part of banking, given that we on both sides of politics were all so pro the privatisation of formerly government owned banks. We said that there was no role for banks to be involved in financing in the way that they were involved way back when the Commonwealth Bank was in government hands. We've taken the view that capital, in particular, should be raised externally and that government funds should be liberated to invest in—in many respects, picking up the form of words that we use time and time again, that we stick to our knitting—the things that provide a broader community benefit and have much more enduring enhancements to people's quality of life. Now we've got those opposite arguing that we should set aside potentially $100 million of government money to support this fund, buttressed by approximately $400 million from other sources, designed to be extended to smaller and medium enterprises to help them achieve what they want to do in their business. So government, as much as it was described by the previous speaker—taking a role in providing patient capital—will, in effect, step in in a way that banks haven't been able to. But also curiously, the government is taking yet another step in this area of providing a framework for the extension of capital to smaller and medium enterprises.

In this chamber during the last parliament we debated the establishment of a particular form of equity raising designed to do exactly what this bill is saying it will do today. That bill was the equity crowdfunding bill that was passed by this parliament. It was passed despite advice from those who would benefit from this, especially start-ups—tech start-ups—and smaller businesses who wanted a much more liberalised framework than what was being offered by the government. Despite the fact that we said the government would have to come back and fix this bill, that it should just defer it and get a proper bill in place and then institute that new regime. The government ignored our advice and, sure enough, within six months we are back doing what the opposition advocated—to work with the government to ensure that there was a framework that would provide equity capital, especially for smaller businesses, and start-ups in particular, and that would be in place and be workable.

We have heard very little out of this government as a result of that equity crowdfunding framework. How much has been raised for small business? It would not require a dollar of government funding; it would rely on investors outside supporting these small firms. This is an important thing. Having access to capital has previously been—and I emphasise the words 'previously been'—a priority, because a lot of small businesses and particularly start-ups had found challenges in accessing capital. But, having said that, we've had no report out of this government as to what their previous initiatives have done to ensure that privately held capital of people who want to invest of their own volition to support small businesses or where that is at. Why have we heard nothing there?

We have had taxation arrangements changed to allow for angel investors to be able to support smaller businesses as well and receive a taxation benefit through the Commonwealth, and we've had very little detail about whether or not that has been successful—none. On top of that, we've changed employee share ownership schemes, particularly for start-ups that can't necessarily pay income in a way that many other people would expect when they're working for a firm: there is a deal struck, which is perfectly reasonable, that someone will be given an equity stake in return for income.

There have been reforms. There was a second round of reforms that had been announced and have gone nowhere as well. So we've had all these announcements, one after another, where we were told that this would revolutionise the way money is made available for smaller business but there's no accountability; none what so ever is provided to us about what's happening. Now we're being asked to do this, which the opposition said in a bipartisan way we will support. But, again, we've got no clear metric, no real figure that the government will put forward that will say, 'This will provide X benefit to so many small businesses as a result of the investment of $100 million by government.' Bearing in mind there's an opportunity cost when you're making a decision, as we will here today in this chamber, to set aside this amount of money which will mean that there is money not going to some other investment in the community. That is a very important point that should be made. I make these comments because I think it is about time, given the raft of different decisions taken, be they equity crowdfunding, taxation reform for angel investors or employee share ownership reforms, that have not progressed and now we have this bill.

We should have a point in this debate where we say: 'We want to come back and get details out of the government about all these things they have done. What they have achieved?' Then, if they haven't achieved them—not to criticise them necessarily, though I think they should be open to that criticism—we should find out how to improve them, because that is very important.

The final remark I'll make is this. We'll spend $100 million to make more capital available on top of everything else I have said. But when you talk to start-ups and when you talk to venture capital and you talk to angel investors, guess what they say? They say the capital is there; they're awash with capital. What they're having problems finding is the deal flows, the type of businesses they can invest in, so that rightly, as investors, they'll get a return on that money, on that investment that has been made. But they can't find enough firms to invest in. That's very important—if that capital is there and then we are adding to it as a government. A few moments earlier, I said we are making a $100 million investment here through this but we are making a decision not to do it elsewhere.

The thing that a lot of small firms want to see is access to talent, to human capital. Financial capital is available; human capital is not. And they are struggling to find people. This government should be investing in human capital, and the best avenue for that is through education—and ensuring Australians have longer term skills that will hold them in good stead to hold down jobs that will be in high demand over the years to come. Where we are seeing transition in the economy through automation and technology, we must ensure our people are ready. And they should be from a wide range of backgrounds—not just from the closest parts of the biggest cities but also from the suburbs and the regions. We need to ensure that that skills development is happening there right now.

A lot of firms are saying they can't find the talent here, and they are increasingly dependent on what? On overseas labour. So then we ramp up the visas to bring in skilled labour. I believe that is absolutely crucial. There is no point in seeing our small firms wither because they don't have the talent available. But the government is doing very little to invest in skills development for the very businesses they are saying they are going to help through this fund or through all the other things I've mentioned in my contribution today.

That should be the priority of this government—that the nation has a pool of skills that will not only meet the needs of firms now but will also have the biggest long-term benefit for this nation, which is to make us smarter. That will allow us to devolve, to broaden out the capacity of the economy, to create new firms and new jobs and make people's lives better in the longer term. Being a smarter nation through development of and investment in human capital should be this nation's priority. That is why I have made these remarks today.

As much as this is a very noble plan by the government, it ignores everything else it has done. It has failed to report on whether it has been successful. It is putting more government resources into an area where capital is quite plentiful. And it is neglecting the longer term investment required in our nation's people to ensure we have a more prosperous, stronger, robust and diversified economy for the years ahead. I ask that the government today, or at some point in the near future, account for all the measures it has taken to support capital within the innovation space, tell us whether those things have been successful, and demonstrate that what it is doing today will actually deliver for what is required for the nation in the longer term.

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