Small business hotline a waste of money says Ciobo

A FREE Federal Government service that offers small business advice and support over the phone will cost taxpayers $2400 an hour.

Opposition Small Business Minister Steven Ciobo, says the $10 million spent on the scheme has the hallmarks of the ‘calamitous Grocery Watch and Fuel Watch’.

Ciobo doubts that the initiative will benefit small business owners on the Gold Coast – the SME capital of Australia.

“Over two years at 40 hours a week, that’s more than $2400 an hour for something which you could bill as Son of Fuel Watch, or Grocery Watch II,” says Ciobo.
“Here is a support line purported to help small businesses costing taxpayers $2400 an hour, but which offers none of the tangible help which small businesses need day-to-day. Honestly, how much will this help small business effectively at a time when insolvencies are mounting around the country? We’ve seen increases of almost 10 per cent in Queensland and 16 per cent in Western Australia in the year to June.”

Launched by Small Business Minister Craig Emerson yesterday in Sydney, the support line has been hooked up to help small business operators navigate the myriad of government departments and specialised services needed to establish or improve a business.

"Establishing and maintaining a small business can be a daunting prospect at the best of times, but even more so during an economic downturn," says Emerson.

"In many cases people just don't know where to turn. The lines will be staffed by advisers with business experience and strong customers service skills. They have also been trained by 'beyond blue' to help callers who may be suffering from depression or personal issues associated with running a small business."

Emerson says the support line would double as a complaints clearing house for those experiencing problems with access to and cost of bank finance. When Gold Coast Business News called the hotline today, there was no wait time for a customer service operator.

Ciobo, the Member for Moncrieff, reiterated his stance on lack of cash flow as the real barrier hindering growth to the sector.

“The government should concentrate on real, tangible support for small business that will assist their cash flow, like the help proposed in the Coalition’s plan for small business recovery,” he says.

“The tax-loss carry back; relaxation on the allowable margin of error for PAYG instalment variations from 15 per cent to 30 per cent; cutting red tape to the lowest level in the developed world; incentives for small business to take on apprentices – they’re the sorts of things small business needs to lead the recovery, not another 1800 number.”

Corporate adviser the Azure Group, says SME'S are currently seriously challenged to cover their fixed costs due to reduced revenues by up to 20 per cent in some sectors.
Local business investment recorded stunning increases in the June quarter rising by 3.3 per cent against expectations of a 5 per cent contraction.

The Australian Bureau of statistics has reported that the increase was “stimulated by the federal governments investment allowance scheme incentives” meaning businesses are taking advantage of the stimulus opportunities for their business, resulting in increased spending.

Managing director of Azure Group Michael Derin, believes the government has ‘definitely played a positive role’ in stimulating business with its investment allowance scheme, but urges caution on spending.

“Small corporates are still burdened with dropping revenue streams by up to 20 per cent and fixed costs which are high and were set at a time when the market was booming, so if business spending is not managed well by these businesses we could see major repercussions in early 2010.”

The Rudd Government has also announced a $10 million program to help equip small businesses to go online and improve their e-business capabilities. The online program is expected to be operational before December.

The small business support line is toll free on 1800 777 275 between 8am and 6pm weekdays.