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Small businesses hurt by package delay, says -

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Small businesses hurt by package delay, says council

The World Today - Friday, 13 February , 2009 12:21:00

Reporter: Sue Lannin

BRENDAN TREMBATH: Small businesses say the delay in the stimulus package has cost them hundreds of
millions of dollars in lost revenue.

The Council of Small Business of Australia says the Government spending can't come soon enough for
the more than two-million small companies in Australia.

Credit reporting firm Dun and Bradstreet estimates more than 100,000 of these companies could go
under because of the economic downturn.

The head of the council, Peter Strong, has told finance reporter Sue Lannin that companies are
desperate for help.

PETER STRONG: For small businesses the best part of the stimulus package is the infrastructure
development. What we like about it is that's something that's going to go across all of Australia;
it's going to go out to small communities right across Australia, which then sends an opportunity
for small businesses out there to take advantage of and get something from it.

SUE LANNIN: So how exactly will they benefit?

PETER STRONG: They'll benefit from access to more jobs, to more business, the construction
industry, which at the moment is falling quite remarkably, means that it won't fall as much and
that means that there will be more money in communities. And when there's more money in communities
hopefully people will spend that with small business.

SUE LANNIN: Now the $950 payout to taxpayers has been reduced to $900. What effect will that have?

PETER STRONG: The $900 is not a big issue for us. The general feeling among small retailers is that
most of that is going to go to the big end of town because the big end of town dominates the market
anyway.

SUE LANNIN: How much have small companies been losing from the delay in passing the package?

PETER STRONG: The loss from the delay is going to be measured over a long period. The reason we
want the package passed quickly is so we can start these infrastructure projects. They need to
start as quickly as possible. So if a small business is lasting six months and then they fold, and
they fold because the infrastructure package hasn't started, that's a problem. And of course it's
into the hundreds of millions, if not the billions of dollars.

Let me say, small businesses are the tax collectors of the nation. We collect billions and billions
and billions of dollars for the Treasury and that will start, well it has started declining already
and will continue to do so and everybody will feel the loss as small business feels it.

SUE LANNIN: Your council is calling for a $30-million rescue package for small companies. What
difference would that make?

PETER STRONG: It would make a huge difference. Number one, they read about it in the paper. Small
businesses run on confidence and if we read in the paper that there's money going in specifically
for small business, not for big business, specifically for small business so that we can have a
package of financial support for those that are really in trouble.

So if I'm running a business and I know that for the next six months I'm going to struggle, I might
have to close and go on the dole, well why wouldn't we pay me some money to stay in business for
six months and then trade my way through it. So that's the sort of money we're looking for.

And a lot of small businesses would not access that money but gee they'd like to know it's there.
It gives them the confidence to continue on and it gives them the confidence to trade and give a
service to the public.

SUE LANNIN: What's been the Government's response to your plan?

PETER STRONG: Well at the moment we haven't heard anything from them. We've sent letters off to the
Prime Minister and Deputy Prime Minister and several others. The other day someone said there may
be something in with Cabinet but we haven't heard anything. There's been no response for small
business.

BRENDAN TREMBATH: Peter Strong, the head of the Council of Small Business, speaking to Sue Lannin
there from his bookshop in Canberra.