Melissa McIntosh (Lindsay, Liberal Party) Share this | Link to this | Hansard source

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.

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 (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

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.

Anne Webster (Mallee, National Party) Share this | Link to this | Hansard source

I rise to support the Australian Business Growth Fund Bill 2019, which will authorise the Commonwealth government to participate in forming and acquiring shares or debentures of the Australian Business Growth Fund, appropriating—

(Quorum formed) With more than three million small businesses employing seven million Australians—and in Mallee, 15,000 small to medium businesses—the government recognises that small and medium enterprises are a key driver of activity and growth in the Australian economy. Through strategic support and capital investment, the Nationals and Liberals in government support the Australian BGF, which will help these businesses reach their growth potential.

The Business Growth Fund is an investment model where a company owned collectively by financial institutions provides long-term patient equity capital investment and business guidance to small and medium businesses. The model was initially developed in the United Kingdom and has also been adopted in Canada. Since the UK's fund was established in 2011, it has invested $2.7 billion in a range of sectors across the economy, including health care, energy, manufacturing and technology.

In separate reports released in 2018, the Reserve Bank of Australia and the Australian Small Business and Family Enterprise Ombudsman identified that a long-term patient equity market for small and medium enterprises is absent in Australia. Venture capital and private equity are not filling this shortage. The Australian Business Growth Fund is therefore designed to fill this gap in Australia's equity finance market by opening a new pathway to investment for small and medium enterprises. The $100 million investment by the Morrison-McCormack government is being met by $400 million from the four big banks—NAB, CBA, ANZ and Westpac. The Macquarie Group have also invested $20 million each. As it stands, the initial capacity of the fund could support up to 10 investments per year. Given that this fund is one of the best opportunities that Australian banks will ever have to undertake equity investments in small and medium enterprises, there will be scope to increase the fund's size to $1 billion and with a capacity to support around 30 investments per year. I am aware that the government is in active discussions with other financial institutions, including superannuation funds, and I look forward to learning of any new developments in this regard.

The fund will invest between $5 million to $15 million in small and medium enterprises that have a turnover of between $2 million and $100 million, where they can demonstrate three years of revenue growth and a clear vision to expand. By selecting high-performing businesses which meet these requirements, the risks sometimes associated with investing will be mitigated. I would ask the Treasurer to monitor the performance of the fund once it is established to ensure that the risk to taxpayers remains low and so that we may see strong returns on the government's investment.

Another feature of the fund circumvents a problem often found with private equity investment. Private equity is not always an attractive option for small and medium-sized enterprises, due to the loss of management control of the enterprise. The equity position taken by the Business Growth Fund will be a minority stake of up to 40 per cent of the company in which it invests, meaning the existing owner can retain a controlling interest in the business. The Business Growth Fund will aim to hold a diverse portfolio, investing in a range of small and medium-sized businesses that will benefit from an equity injection to support their growth plans. There are thousands of businesses across the country that would benefit from accessing this fund, including 15,000 in my electorate of Mallee.

The horticultural industry in the northern part of my electorate continues to grow. However, the industry faces extreme difficulty with the rising cost of conducting business, due to increased input costs. I recently spoke to a local farmer, Rocky Lamattina—a carrot farmer operating out of Wemen and Kaniva, in my electorate. Rocky has been in business for almost 30 years and runs the business with his sons. He employs over 80 people and maintains an integrated transport service to deliver his produce around the country. He exports his carrots internationally but says his focus is on a more reliable domestic market. Rocky, like so many other innovative and passionate producers across Mallee, has an eye to the future. He has recently invested in on-farm and transport infrastructure upgrades and has plans to grow further to secure the ongoing viability of his business.

However, Rocky is concerned that small and medium-sized operators will not survive against large corporate entities that are increasing in size. He says that accessing finance and investment is an ongoing challenge for growers in the industry, which is adding to this problem. Some growers don't want to lose management control over their business to secure private equity. Many, like Rocky, want to keep the business in the family to secure the livelihood of their family for generations to come. Other growers have reached a ceiling in their borrowing capacity, having pledged all their assets as collateral to secure finance. This can lead to businesses stagnating as plans to expand are put on hold until finance can be secured.

Mr Lamattina was pleased to hear that this government is addressing these issues through the Business Growth Fund. Patient or long-term equity investment through the fund will allow growers to retain control of their businesses, and the capital injection received will be an attractive alternative to incurring debt. The Business Growth Fund will offer choice and flexibility to small and medium-sized enterprises, and will foster growth and expansion in this competitive industry.

This is an important bill that, as a Nationals member, I am happy to support. It will deliver positive outcomes for many businesses in the Mallee and across the country. I thank and applaud the Treasurer for the introduction of this bill, and I encourage other banks and superannuation funds to seriously consider this fantastic opportunity to invest in the future of small and medium-sized enterprises and the ongoing strength of the Australian economy.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I begin by commending the member for Mallee on the very eloquent way she has outlined the exact types of businesses that are going to benefit from this government initiative.

Generally, as a free market capitalist, I'm not in principle comfortable with governments investing in the private sector. But this is a very important and specific initiative to address what is a real problem for our smaller businesses in this country—that is, the way in which they can access alternatives to debt finance, specifically, in this case, through equity. We've got a very mature equity market for larger businesses through the stock exchange and other avenues where, if they're of a certain scale, they can pursue equity financing to expand and grow their business. But there's a point at which the cost of pursuing that becomes completely prohibitive, if their scale isn't significant enough.

In this bill, the Australian Business Growth Fund Bill 2019, we are talking about businesses with a turnover of between $2 million and $100 million a year. Clearly, businesses of that scale are not in a position to go through the very significant cost of developing an IPO, going into the equity market and satisfying all of the hoops they should jump through before they can access finance through listing. For businesses that find that cost prohibitive, clearly their only real source of capital for their business at the moment can be through debt. We certainly have historically low interest rates at the moment, but we can't count on that being the case indefinitely into the future. Regardless of interest rates and the cost of debt finance, there's a big difference between financing business growth through debt and financing it through equity. This is clearly an initiative that will provide that opportunity. (Quorum formed) I've slightly lost my train of thought there. I think I was talking about the narrow opportunities that debt-only as an avenue provides to smaller businesses that are covered in this fund.

What we're doing is creating a mechanism where these smaller businesses—small and medium-sized businesses—can pursue equity financing to expand their businesses. This is going to make a really big difference to those businesses, because until now there hasn't been a logical avenue for them to pursue that sort of capital. It does change the dynamic of capital raising and how you can pursue business expansion, because when you borrow money there's a completely different objective, a different risk profile and a different set of criteria that someone who's lending money provides over a new business expansion plan than that of someone who's investing equity, particularly in this case, which is going to be long-term equity—not capital to be moved in and out of the business quickly for short-term profit seeking but patient capital that is going to be in the business for the long term to help support a new business-growth plan. That's completely different to borrowing money. Borrowing money requires, obviously, a process that is going to be relevant to the lender as far as repayment of the loan and confidence in repayment of the loan are concerned—that is, being able to meet those repayments in the period that the loan is provided. When you're investing in equity, given you're on the ownership side rather than on the debt side, you have to take the risk that the idea and expansion are going to have a return in the long term. It takes the risk off the business and the idea to expand the business when you don't have to meet very-strict repayment criteria, particularly in the early years of the expansion that you're pursuing.

I think this is going to be very exciting. I hope it's going to see a lot more new opportunity created for small and medium-sized businesses in this country—that is, businesses with up to $100 million in turnover. We're talking about businesses that can be quite significant but not quite big enough to warrant going into the mature equity markets in this country and the other avenues that are there for the bigger players. So I'm very excited about this. I note that in the United Kingdom and in Canada—two economies quite similar to the Australian economy, with the same kind of profile of SME businesses—it's been remarkably successful.

Initially, we're talking about a fund towards about $500 million, with $100 million of government funding and then money from the four banks and Macquarie. Hopefully, as proof of concept comes through in the initial stages of this fund, businesses will get off the ground and start to make investment decisions, and hopefully those decisions will be successful. Of course, the scheme does require that businesses have demonstrated revenue growth over three years and profitability. So it's not overly speculative; it does require track record. I hope that there will be more enthusiasm from other people in the financing sector to put their money into this fund as it proves its concept. But we need to seed it and we need to show that we're backing it, and that's exactly what this bill does with $100 million.

I've got a lot of businesses in my electorate who will fit the profile of the type of business that can access equity funding through this fund, and there will be many, many thousands—tens of thousands—of businesses across the country that will be able to consider this. It's an option. There'll be some businesses that will still seek to finance through debt. They might find that more appealing based on the business plan that they've got and based on the trajectory that they're on, but there'll certainly be categories of businesses that will see this as a new way of expanding their business that they didn't have open to them earlier. What that's going to mean is not only business growth but, more importantly, jobs. It's going to mean more employment outcomes in our economy, and I warmly commend the bill to the House.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to 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.

Vince Connelly (Stirling, Liberal Party) Share this | Link to this | Hansard source

It's my pleasure to rise today in favour of the government's proposed Business Growth Fund. This fund will offer capital and strategic support to growing companies and entrepreneurs to assist them to reach their growth potential. In Stirling, there are 19,818 small and medium businesses—

Anika Wells (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I draw your attention to the state of the House.

The bells being rung—

Barnaby Joyce (New England, National Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, can I bring your attention to the fact that we have a condolence motion over the bushfires currently going in the Federation Chamber. Every time we call a quorum we are breaking from the capacity of those people to express those condolences to come down here. I think that should be an item of consideration in the future.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member. The standing orders require the quorum to be called as it's called, so I have called a quorum.

(Quorum formed)

Vince Connelly (Stirling, Liberal Party) Share this | Link to this | Hansard source

I was just making the point that in my wonderful electorate of Stirling there are 19,818 small to medium businesses. So for me, this policy is absolutely relevant and I look forward to its implementation.

Those businesses in Stirling will continue to thrive with strong and ongoing support from the Morrison government. Our support to small and medium enterprises is broad and it is detailed. To contextualise this new legislation, it's worthwhile to briefly reflect on just how extensive this government's support is for SMEs—support which includes tax cuts, instant asset write-offs, red tape reduction and cash flow improvements.

Ahead of the election we announced increased support to SMEs through the instant asset write-off scheme, which enables businesses to invest in machinery and equipment up to the value of $30,000. The tax rate for small businesses with a turnover of less than $50 million has also been reduced from 30 per cent to 27½ per cent, and this will be reduced further to just 25 per cent. When it comes to cash flow, the Morrison government is setting an example to make sure that small businesses are paid on time. From January 2020, the government has started paying invoices within five days for contracts up to $1 million. We will also require large businesses seeking to tender for government contracts to match this policy.

Now let's talk about trade. With regard to trade and export opportunities, the Morrison government has boosted the Export Market Development Grants scheme by $60 million for small and medium Australian exporters. We have provided more opportunities for Australian businesses with China, with Japan and with North Korea, as well as via the Trans-Pacific Partnership. We've signed the Pacific Agreement on Closer Economic Relations and agreements with Indonesia, Peru and Hong Kong.

Just last week I visited ADENCO, a water management and civil engineering company in my electorate of Stirling. This company is supporting the crucial mining sector in Western Australia. I was really pleased to congratulate them also on securing an Export Finance Australia loan. ADENCO proudly display an award they received from BHP iron ore called an 'Oresome effort' award. It's displayed in their reception because it's in recognition of their contribution to BHP's charter values, including sustainability and safety, which they are very passionate about.

Increasing opportunities for Australian businesses to sell goods and services overseas and partner with larger corporations forms a critical part of the Morrison government's plan to deliver a strong economy and another 1.25 million new jobs over the next five years. But we are not stopping there. It's our intention to improve SMEs' access to finance as well. That is because we on this side of the chamber understand what businesses need to thrive and understand that when SMEs thrive they create local jobs; they invest in the local community. Many small and family businesses find it difficult to attract passive equity investments without additional debt or giving up control of their businesses. The Business Growth Fund will provide long-term capital, enabling small businesses to grow while their owners retain control of their business. The Business Growth Fund will invest in established Australian small and medium-sized enterprises with revenue between $2 million and $100 million and a track record of three years of revenue growth and profitability. The Business Growth Fund will have a diverse portfolio, investing in a range of industries in both urban and regional areas. The final investment mandate for the Business Growth Fund will be agreed upon by shareholders within the next few months.

By contrast, Labor took an atrocious handful of policy settings to the last election—policies that would have taxed Australians and hurt businesses. Our coalition government's support for small and medium-sized businesses is steadfast, and we will continue as long as we have breath in our bodies because we are the party of small businesses and of local jobs.

Karen Andrews (McPherson, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I start by thanking those members who have contributed to the debate here today. The Australian Business Growth Fund Bill 2019 introduces new legislation that authorises the Commonwealth government to participate in forming, and acquiring shares in or debentures of, the Australian Business Growth Fund, the BGF, and appropriates $100 million for that purpose.

The government recognises the challenges that small and medium-sized enterprises, SMEs, face in accessing capital and the lack of a patient capital market for SMEs in Australia. Through the Australian Business Growth Fund, the government will offer growing established companies patient capital and strategic support to assist them to reach their growth potential. The government is making a substantial contribution to the BGF, which will have an initial investment capacity of $540 million with the potential to grow to around $1 billion as it matures.

The government wants to take the opportunity to thank the other banks involved in the announcement made last week for their investment in the BGF: NAB, CBA, Westpac, ANZ and HSBC. The government also wants to take the opportunity to thank stakeholders, such as the Australian British Chamber of Commerce, that have assisted with the development of the BGF. With this bill, the government is delivering upon its election commitment to invest $100 million to help establish the Australian Business Growth Fund and its wider promise to support Australian small businesses.

I'd also like to take the opportunity to speak on behalf of the many small businesses—small and medium-sized enterprises, but particularly small businesses—right around Australia. We do understand how difficult it is for many small businesses at the moment, particularly those that have been affected by bushfires. We know the fires have had a significant impact on them, particularly over the Christmas period, when they have had significant disruptions to their ability to earn income through their businesses. We know that many of the small businesses that have been affected rely on the revenue they get during the Christmas holiday period to sustain them throughout the year and to get them ready for the following period of time. We are aware that those businesses have been hit quite hard. I appreciate the opportunity to be able to add those comments. I commend this bill to the House.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I'm pleased to rise this morning to speak on the Australian Business Growth Fund Bill 2019, and as I do it's good to see some clouds overhead in Canberra. I understand that back in my hometown of Sydney we're looking at about nine days of substantial rain, which I'm sure will be great news for all those small businesses across the country that have been looking for the drought to slowly come undone. Even though there's a long, long way to go these recent rains are most appreciated.

This bill introduces new legislation that requires the Commonwealth government to participate in forming and acquiring shares in or debentures of the Australian Business Growth Fund, and the bill appropriates $100 million for this purpose. The small-business growth fund was an investment model established in the UK, and which has also been adopted in Canada, where a company collectively owned by financial institutions provides long-term capital and business guidance to small and medium-sized businesses. One important point there is that it's not just the capital—although the capital is very important, and almost every small business in the nation is always looking for more capital—but also the business guidance it gives. It's very important for many small businesses to have their investors providing that oversight and some guidance.

(Quorum formed) I will not overly delay the House on the vote on this most important legislation but I will add that this legislation shows the government's commitment to supporting Australian small business. We on this side understand that governments do not create jobs. The only time that we in government create jobs is when we take money from small business and spend it. It is those small-business entrepreneurs who get up every morning and who put their own capital on the line and go out who create the wealth that we in this nation need to pay for our hospitals, our schools, our aged care, the things we need for kids with disability. It is the wealth created by the small businesses of this nation that pays for all these things. We must never forget that. We are not the creators of jobs here in Australia; it is those small-business people who go out there every single day. With this legislation we show that we in the coalition are right behind them.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be read a second time. To this the honourable member for Rankin has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for Rankin be agreed to.