Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Small companies coping better than big firms -

View in ParlViewView other Segments

Reporter: Sue Lannin

ELEANOR HALL: The latest unemployment figures will be out on Thursday this week and it's expected
that the number of Australians out of work will rise.

Small businesses employ more than four million people across the country. But despite problems with
access to finance, recent surveys have shown that small businesses are responding to the changing
economic conditions better than their bigger counterparts.

Finance reporter Sue Lannin has more.

SUE LANNIN: Business confidence is at record lows, but small and medium-sized companies remain the
engine room of the economy.

The National Australia Bank's recent survey on small and medium-sized companies found they did
better than big firms in the December quarter.

Julian Pearce, the NAB's head of business banking in Queensland, says smaller firms have lower
debts than the big end of town.

JULIAN PEARCE: Well I think that's really to do with their capacity to respond to the current
situation in a more agile way than larger companies can. The SME sector has got ongoing access to
bank funding and has gone into this downturn less highly-geared than parts of the corporate sector.

SUE LANNIN: Small business organisations say the cost of credit is one of their major problems, but
Julian Pearce says business interest rates need to be higher because the risk is higher.

JULIAN PEARCE: We are keen to offer as low as possible rates to our business clients, but business
lending requires much heavier support from capital on a bank balance sheet than home lending, and
that's very much driven the outcome for the price for small business lending which is a capital
support required is much higher than for home loans.

SUE LANNIN: Christena Singh carries out the small business survey for Sensis, which found that
business confidence is at record lows.

She says while manufacturing is suffering, other areas are managing to survive.

CHRISTENA SINGH: We are seeing small businesses perform particularly well in health and community
services, in community sectors particularly, some of the tourism sectors had a good quarter last
quarter, some of the sectors that have been having more difficult times we've been seeing in retail
and manufacturing.

And we're hearing a lot from larger businesses of course too at the moment in those sectors. Some
of it has to do with sectoral issues, but at the moment small businesses are very open to
opportunities where larger businesses might be cutting back.

SUE LANNIN: Taine Moufarrige works with thousands of small and medium-sized firms as executive
director of office solutions company, Servcorp.

He says smaller firms are more able to respond to the economic downturn.

TAINE MOUFARRIGE: The nimbleness of a smaller to medium-sized enterprise should allow them to make
quick decisions that are going to benefit their business without having to worry about going
through a massive HR department or through a board of directors. The nimbleness of SMEs we think
will give them a really good advantage working through this terrible economic storm we're in.

SUE LANNIN: He's encouraging small firms to look overseas to increase their markets, especially
towards the Middle East.

TAINE MOUFARRIGE: This is the time to be focusing on your core business, this is the time to be
cutting back to business basics, this is the time to be finding solutions that are going to help
you keep your costs low, but keep the quality of your product or the service that you are providing
at the highest level that you possibly can.

Because people are still looking for products and solutions that are going to help them, that are
going to help their business or help their lifestyle.

ELEANOR HALL: That's Taine Moufarrige from the office solutions company Servcorp ending that report
by Sue Lannin.