Record low interest rates will not be enough to help the industry unless banks are given incentives to lend printers money, print owners say.
The Reserve Bank yesterday cut the official cash rate from 2.25 to 2 per cent, the lowest ever in Australian history, ahead of next week’s budget.
Permanent Press Printers managing director Chris Segaert says the government needs to give lenders an incentive to lend money to printers.
“That is what we need. We don’t need incentives for us to spend money; we need incentives for our lenders to lend money. The question for us is that there is no point investing in this industry when we are trying to rationalise,” he says.
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Segaert says the government needs to understand that supporting the sector will support jobs and grow the Australian economy.
“Keeping businesses open, keeps people employed. If a business closes, then the people that work there don’t have a job. But if the owner has an incentive to stay open then there is business that is being done, taxes are being paid, and employees are employed.”
Mail Boxes Etc Parramatta owner Charles Batt says while the government is making some inroads cutting red tape, it is failing to address the taxation system, which is a major issue facing small business.
“For a small business owner there is so much red tape, and so many unanswered questions about how to run your business, if the government could address a lot of those issues themselves it would make life a lot easier for small business,” he says.
“The government is so gun shy after the debacle of last year’s budget that they probably are not going to go out on a limb that they should go on.
“I think politics will win over the right move, there are a lot of things they could do but I think they will not do them because they can’t afford to have another year of hiding from the opposition.
“I think small business from a lot of perspectives is hurting. I know my competitors are finding it tough. The banks need to be more entrepreneurial and I think after the GFC there was a backlash but I think that will slowly step through again.”
PIAA chief executive Bill Healey welcomed the rate cut, saying it will decrease cost to business, but he says it will not be enough to boost business confidence.
He says the government needs to look at its fiscal policy, and encourage lenders to lend to small businesses for there to be a significant boost in consumer confidence and investment.
“The cut on its own does not lead to the achievement of boost in confidence; we really need to see the budget next week to see if there is a package that instils confidence in the consumers and the economy, because that is ultimately what’s going to assist operators,” he says.
“We have seen situations with people with quite modest overhangs on their debt who have been screwed by a bank, we feel quite unfairly, because of their lack of confidence in our sector.
“Now unless that changes, it wouldn’t matter if the interest rate went down to zero.”
Healey says the government needs to show some ‘true courage’ and release a budget that will go beyond the RBA’s rate cut and encourage banks to lend to printers.
“It would be better, and this will come next week, for printers to get an investment concession, where they get an investment allowance, where they can go and get a rebate on an investment,” he says.
“I think something tangible because if you don’t have a loan there is no benefit, whereas if you give business an interest depreciation allowance than they will be encouragement to spend.
“The critical point is that we need a package of reforms that ensures that this economy gets back on track and that requires some sort of fiscal discipline and fiscal change and we can’t rely any further on monetary policy to change the way.”
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