Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

Minister, for those in the chamber here today who are here to witness the Senate doing its job, which is scrutinising government legislation and holding you to account, I note that you can't even provide some of the most basic information that we need to make a decision to pass this legislation today. You can't even, for example, tell us how many SMEs weren't able to access capital that's required to, for example, expand their businesses. You've said that there's a need for patient equity or patient investment in SMEs, yet we don't even know how many SMEs have been asking for that patient investment. I understand if you don't have the information. You can choose not to answer the question, or you can just stand up and say, 'Senator, we haven't assessed what the market failure that we're trying to address here actually is.' But I think you've got to be honest, and fundamentally honest, with the Senate about this. We are about to give $100 million of taxpayers' money at a time when your government is riddled with scandals from pork-barrelling—using public funds for your own personal and electoral benefit. You're about to take $100 million of taxpayers' funds and put it into a private equity fund that will have enormous power in this country. It is essentially going to be run by the big banks at a time when we have worked as a chamber over many years to breakdown the power of the banks and the concentration of the banks in Australia. Why give them a leg-up, by essentially giving them control of an enormously influential private equity fund in the area of small and medium enterprise financing?

You've admitted to the Senate today that you haven't even talked to some of the existing IPOs, the public equity financers, who have clearly raised concerns with us as a Senate about the fact that they're going to be crowded out. They will not be able to compete. They are providing capital to hundreds, if not thousands, of small businesses already, and successfully providing capital. They have rung the loudest alarm bell you could possibly ring about your fund.

We all know in here why this is happening, because this government made an election promise that they would put in place a business growth fund. The amendment we have before us today from Senator Patrick is a very sensible amendment. When I first heard about this—it's been very rushed; I didn't know anything about it—my immediate assumption was that the Reserve Bank said we need to do better to help small businesses, everybody agrees with that. My immediate assumption would be this would a lender of last resort facility for those SMEs and others who couldn't access finance. My second thought was they'd be very high risk. They'd be very high risk SMEs if everyone else had knocked them back. But there are valid reasons why some Australian businesses won't get finance in a tough environment. And, yes, it's true, APRA, ASIC and others have been a lot tougher, as they need to be for our systemic market risk. Why are we not considering, as a chamber, Senator Patrick's amendment that would at least make this fund provide finance, or be in a position to potentially provide finance, and funding as an underwriter to those SMEs that can't access finance? Where's the information on where that market failure is?

The numbers we've seeing here are that up to 30 per cent of SMEs—the best small and medium enterprises, the ones with the best balance sheets and the best investment propositions—are going to be cherrypicked by this bank-funded, massive private equity fund of enormous influence. The benefits of that are going to flow straight back to the big banks. It'll give them more money and more power and the SMEs that actually really need the funds aren't going to get anything. Those investors out there at the moment—be they the concerns of the Australian Shareholders' Association, be they stockbroking companies—those that provide private equity are going to get left with the SMEs that are the highest risk and potentially lowest return, while this massive private equity fund, that we're essentially giving to the banks through your initiative, is going to cream the profit off the top, to use the name for Senator Patrick's dissenting report. It doesn't make sense. Minister, you have a background in finance. I know you understand this stuff better than most people in this place so I know that you can answer these questions.

I wanted to clearly put it on record today that you can't tell us how many SMEs have even applied for funding. You can't tell us how many have been knocked back from funding, be it a debt funding stream, be it a private equity funding stream, be it an IPO stream through initial public offerings on the share market. We don't know what benefits the UK BGF have delivered for their economy—no information could be provided to us on that. We have never really got a response from your government and Treasury as to why banks only put aside 25c in the dollar. Why is the very sensible proposal to make the Business Growth Fund an underwriting fund not being considered, rather than this flawed current proposal? It's also not being considered by the Labor Party either. I'm very surprised about that after what we've been through. I don't think we would have seen the Labor Party supporting it and giving the big banks more power and more money in the last parliament.

I'm very troubled by the idea that Labor will support this proposal today. This is a proposal to give it to the big banks and many of them are reluctant. It has been reported in a number of media articles that at least three of the big banks are reluctantly participating. We've heard from the minister today that they're still working through the details with those big banks. They're not quite sure exactly what that participation is going to look like. Minister, have you had personal conversations with those banks about their doubts and will you be able to provide the chamber today some background as to why even some of the banks that we're giving more money to—and the Australian public are giving another leg up to—have concerns over this fund?