BANKS v SMALL BUSINESS : This week we highlight important information for small business by reproducing reports on the bank finance debacle and its effects upon small business. “The ABA says data from the Reserve Bank of Australia reveals that over the past six years interest rates for small businesses have fallen to the lowest levels since data started to be collected on the amount SMEs pay for finance. . . However, the small business community has been concerned over the past year not only with the terms of loans once they are acquired, but with actually gaining access to finance in the first place.”
And, “The Sensis index for the December quarter also found smaller operators are finding it more difficult to access finance compared with last year. . . “Co-founder of small business lender Prospa, Beau Bertoli, says it’s not surprising that SMEs feel “let down” in a world where banks may not always have their best interests at heart. However, he observes that when it comes to access to finance, the federal government has been involved in policy moves that he believes are designed to help SMEs on this front.”
Additionally, “The Productivity Commission has warned the federal government that tighter lending rules have –allowed major banks to jack up rates on existing residential and business loans in a profit gouge . . . the report finds some notable failings in competitive behaviour evident in markets of home loans and for small- and medium-enterprise (SME) finance, . .”
Given The Productivity Commission’s report, where small business is concerned, it seems as though the “big four” banks, choose with impunity to ignore the explicit legal principle of “unconscionable conduct” set out in the Decision of the High Court of Australia in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.
Obviously, there is a lot of work to be done, in particular in view of the Productivity Commission’s scathing report into the banks, which will be fodder for the Royal Commission into the Banks and that can’t happen soon enough. Bring it on!
PAYROLL TAX: Should the SA proposal: “Businesses in South Australia with an annual wage bill below $1.5 million will be exempt from payroll tax . . .” come to fruition by the Libs winning the SA election on 17 March 2018, will that be the catalyst for other States, including WA, to follow suit. If so there will be much pressure on McGowan to do so.
“Mr Marshall said lifting the threshold from $600,000 will help stimulate the state’s “sluggish” economy and create employment, a view shared by Malcolm Turnbull . . .”