Australian small businesses have not been supported through economic turmoil in the way they should have been, FIFO Capital CEO Wayne Morris says, as robust interest rates and the cost of doing business weigh on countless enterprises across the country.
Speaking on Wednesday during a SmartCompany webinar, Morris said epithets about the small business sector — that it is the nation’s largest net employer, and the ‘engine room’ of the economy — have not inspired enough institutional support for the sector.
“You can’t have SMEs stall, because the country does stall,” Morris said.
“And yet there hasn’t been the support for SMEs that there should have been.
“There’s been a few snippets, but it’s about time things were made a bit easier.”
FIFO Capital offers business finance, meaning high-interest rates should, on paper, benefit its bottom line through higher repayments.
However, Morris said a high-interest rate environment has hampered many small businesses, especially those entering into fixed-rate loans.
Further support should be offered to traders doing it tough, he said, particularly entrepreneurs.
“Crikey, we’re talking about people giving up their jobs, and really going out on the coal face, saying, ‘I’m going to try,'” he said.
“You’ve got to take your hats off to those people, and you’ve got to support them.
“And I think there are too many SMEs that have been missed in the last few years, and we’ve done these countermeasurements to protect the country, but at the expense of the SMEs.
“It’s time for that to be fixed.”
The Reserve Bank of Australia left the cash rate target unchanged at 4.35% on Tuesday, guaranteeing at least another month before any significant movement in interest rates.
Despite what he calls a lack of support for SMEs doing it tough, Morris suggested the central bank’s battle against inflation is working, and that an interest rate reprieve is on the horizon.
“I’m positive about a change,” he said.
“I don’t think it will come soon enough, but if we bide our time we’ll soon see we’ll be back in a good position.”
Interest rate hikes themselves are intended to limit consumer spending to curtail inflation.
The federal government has framed its small business support measures the same way, insisting that targeted spending is better for the economy than dousing SMEs in monetary support.
Such policies include investment in cyber security training and support, tax incentives for businesses investing in green upgrades, and competition reforms designed to level the playing field between SMEs and major competitors.
Source: https://www.smartcompany.com.au/finance/economy/wayne-morris-fifo-institutional-sme-support-interest-rates/