Small firms to seek tax relief and easier credit access

SMALL business leaders will ask the Rudd Government for tax relief and easier access to credit at summit with federal ministers on Friday.

SMALL business leaders will ask the Rudd Government for tax relief and easier access to credit at summit with federal ministers on Friday.

With the Rudd Government moving to prevent the effects of the global financial crisis leaking into the real economy, Kevin Rudd yesterday announced the summit of small business leaders would follow from his meeting with business chiefs in Sydney last Friday.

The Council of Small Business Organisations of Australia also wants the Government to take whatever action it can in addition to its $10.4billion economic stimulus package to help small firms retain cash flow.

Wayne Swan, Small Business Minister Craig Emerson and Superannuation and Corporate Law Minister Nick Sherry will also attend Friday's meeting, along with representatives of the banking sector.

News of the summit comes amid similar moves by the British Government and follows last week's announcement of one-off cash payments to pensioners, low-income families, carers and first-home buyers as part of a $10.4billion package to stimulate the economy.

There are nearly two million small businesses across the nation, employing up to four million people.

COSBOA chief executive Jonathan Brake told The Australian many operators feared for their futures.

"The conversation we want to have is looking at initiatives that are going to allow small businesses to function well at this time," Mr Brake said.

"That includes access to credit (and) sensitive leniency with the tax office."

Mr Brake said small business people were also concerned about access to credit and how to maintain cash flows.

Many were using credit to maintain cash flows, a worrying trend because when bills were due operators might have to start shedding jobs.

"It's not about profit and loss," Mr Brake said. "It's about cash flows. If you start dropping even one or two staff in some of the larger employers, you're starting to talk about tens to hundreds of thousands of people."

Mr Brake said small business people had been hearing about government guarantees for individuals' bank deposits but had "kind of been left out there" by the Government.

Announcing the summit, Mr Rudd made no comment about his intentions for the meeting on Friday.

However, it is understood the Government is hopeful that its $10.4billion stimulus package would help the sector by boosting retail spending.

Senior government sources have indicated over the past few days the Government wants to see the effects of the package, as well as the recent interest rate cut and government moves to unfreeze credit markets, before committing itself to further action.

Mr Rudd told question time yesterday his Government had acted firmly and decisively on the global crisis.

"The Government remains determined to act further in the future as is necessary, firstly to ensure the continued stability of the Australian financial system, and secondly to ensure that we continue to deliver additional support for growth in this economy in what will be a troubled and difficult time ahead," Mr Rudd said.