The Federal Government has released consultation for the exposure draft legislation to allow the government to invest in an Australian Business Growth Fund (BGF) to help small to medium-sized enterprises (SMEs) increase financial access.
The government aimed to supply SMEs with access to more competitive finance in the hope they would grow and improve the economy.
In a joint statement from Treasurer Josh Frydenberg and Michaelia Cash, the minister for small and family business, skills and vocational education, the government would commit $100 million to establish the BGF.
They would also partner with other institutions to provide equity to fund SMEs, with the aim for the fund to grow to $1 billion.
“Small and medium-sized businesses find it difficult to obtain finance other than on a secured basis – typically, against the family home,” the statement said.
“They also find it difficult to access additional funding, once they have pledged all of their real estate as collateral.”
Legislation to establish the BGF would be introduced at the end of the year and submissions for consultation can be submitted before 8 November 2019.
The BGF aimed to complement the Coalition’s other plans to support SMEs, which included:
- Adding the $2 billion Australian Business Securitisation Fund;
- Increasing and expanding the instant asset write-off to $30,000 for businesses with a turnover up to $50 million; and
- Providing tax relief for businesses with a turnover less than $50 million and reducing the tax rate from 30% to 25%.