Monday, 20 October 2008
Questions without Notice
I would like to thank the member for Dawson for his question and for his ongoing and very strong support for small businesses. I am delighted to be able to join him on 3 November at a luncheon being hosted by the Mackay Chamber of Commerce and business.
Small business is usually the first to feel the effects of an economic downturn. Our Economic Security Strategy will inject $10.4 billion into the Australian economy and that will boost consumer spending, to the benefit of Australian small businesses. The Reserve Bank’s decision to cut the official cash rate by one percentage point will both stimulate the economy and help reduce small business borrowing costs. The Rudd government’s decision to guarantee bank deposits and term funding arrangements has helped keep credit flowing to small businesses, though we obviously acknowledge that there are some difficulties there in the midst of this crisis.
Yesterday’s decision by the National Australia Bank to cut its variable rate for small business lending takes the reduction in small business borrowing costs from Australia’s largest lender to small businesses to a total of at least 1.2 percentage points. In announcing yesterday’s decision by the National Australia Bank, its Executive Director, Ahmed Fahour, said:
While our current cost of funds remain at a historical high, policy measures announced by the Australian Government earlier this month have started to have a positive impact on the credit market.
We welcome this new development and anticipate that we will see some relief in the significantly higher premium we are currently paying for wholesale funds. Should this be the case, then we hope to be in a position where we can pass on further interest rate cuts to our customers.
That would be further good news for small businesses. What the executive director of the National Australia Bank did yesterday was to lodge a vote of confidence in the government’s policies announced in response to the financial crisis.
I am delighted that the Prime Minister and I will be hosting a small business summit on the global financial crisis in Brisbane on this Friday, 24 October. The summit will also be attended by the Treasurer and by the Minister for Superannuation and Corporate Law, so it will be the Prime Minister, the Treasurer, the Minister for Superannuation and Corporate Law and me as small business minister. The summit is being organised in collaboration with the Council of Small Business Organisations of Australia, COSBOA, and with Commerce Queensland. Small business organisations around Australia and individual small businesses will be invited to share with the Prime Minister and economic ministers their experiences during these challenging economic times. We are also inviting the major banks so that they can set out their lending policies for small businesses and engage with the small business community.
The Rudd government is committed to supporting Australia’s small businesses through this financial crisis. The government greatly appreciates the contribution of Australia’s 1.9 million small businesses in creating prosperity for themselves and their families and in generating jobs for nearly four million Australians.