In the midst of a global financial crisis, this is an important gathering.
We're here today because we, as the business community, we as a nation must work together to protect the nation's economic future.
Today's gathering brings together economic decision makers in the government and the commercial acumen that each of you represent, from the business community.
It's an opportunity for us to discuss economic conditions in the small business sector and how policies can help address the challenges that we face.
It follows a meeting that the Treasurer and I and the Small Business Minister Craig Emerson had with the business community in Sydney last Friday.
As many of you will be aware from your own experiences, our country faces difficult economic circumstances.
What began as a sub-prime crisis in the United States mortgage market has quickly become a global economic problem spreading to Europe, spreading to Asia, spreading from financial markets, spreading now to the real economy.
Australia is a robust economy - but we are not immune from what happens in the rest of the world.
That is why our government has been determined to take decisive action to protect our long term economic prosperity.
We've acted to maintain the stability of the financial system with a government guarantee for deposits.
We've acted to support continued bank lending to business by providing a government guarantee to the term wholesale funding arrangements of the banks.
We've acted to stimulate the economy with a $10.4 billion Economic Security Strategy.
These three actions are unprecedented in the history of the Commonwealth.
We are in the midst of unprecedented times.
All three of these actions have been necessary to maintain the stability of the Australian financial system and to maintain positive economic growth.
All three of these measures have been necessary to maintain confidence in the financial system and in the economy.
And as I said at the time with each of these measures and when they were announced, the Government stands ready to take whatever action, whatever action is necessary in the future to continue to maintain the stability of the financial system and to continue to maintain positive growth in the economy.
The truth is that the international financial system and the international economy are travelling through virtually unprecedented times.
And the truth therefore is that the Australian economy and the Australian financial system are travelling through uncharted waters. And there will be rough waters ahead for us to negotiate. Challenges will continue to arise that need to be dealt with.
And as the Government we will work through each of these systematically, calmly and methodically. Together with our financial and economic regulators we will work through each of these.
As a business community we will work through each of these with you. As a nation we will work through them together.
In the midst of this global financial crisis, Australia remains in strong shape.
It's important in a crisis to be mindful of the challenges we face, neither to understate them nor to overstate them. It is equally important to be mindful of the strengths that we have.
We have the best regulated banking system in the world. The World Economic Forum recently rated Australia's banking system equal second out of 134 banking systems in the world when measured against soundness and stability - with those of the US and UK ranking 40 and 44. The world today has now approximately 12 AA rated banks - and four of those 12 are the four major Australian banks.
Our banks' balance sheets are strong. Our banks are profitable.
Since the introduction of the government's guarantee 10 days ago, the banks have reduced their mortgage rates by a further 20 to 25 basis points - directly attributing these moves to the actions taken by the Government.
Spreads in interbank lending have also started to reduce - although they remain high by historical standards. The Government's bottom line is also in excellent shape.
The Government set aside a large budget surplus in May as a buffer for the future, as a buffer for tough times ahead. And those tough times have come. That's why we were able to act quickly, effectively and decisively on the $10.4 billion stimulus package last week.
Most other governments around the world are faced with the similar need for a stimulus package, but were not in the same strong position as Australia because most were already in deficit.
Australia by contrast has been able to harmonise fiscal policy stimulus with the recent monetary policy moves by the Reserve Bank of Australia - the 100 basis point interest rate cut.
The Government has also indicated that come December, we will begin to bring forward our nation-building agenda on infrastructure - needed for our economic future, needed also to provide continued stimulus to the economy.
As a result, while most of the developed world has gone into negative growth, we continue to project positive economic growth for the future - although at a rate considerably slower than before.
And while this will be tough to maintain, the Government remains absolutely determined to do what is necessary, to do whatever is necessary to continue to support positive growth, to continue to support stability, to continue to support confidence into the future.
Part of the Government's strategy lies in the proper coordination of policy action with the global economic community as well. A global financial crisis requires a global financial solution on liquidity, on regulation, on transparency.
A global economic crisis also requires global economic action - including coordinated fiscal policy action. After intense economic and political diplomacy in recent weeks, Australia now has a formal seat at the negotiating table of the world when the G20 heads of government sit down on these matters in Washington on the 15th of November.
Some argued that the G7, the Group of Seven Nations of old, was just sufficient for this purpose. We argued the reverse.
I congratulate the Government of the United States for its decision to recognise the reality of the 21st century economic order, where the centre of gravity in the global economy is increasingly moving to the Asia Pacific region.
Australia has vital national interests at stake in the negotiation of the new rules of the global financial system and the new rules of the wider global economic order.
Australia will be playing an active role because decisions taken in Washington and in the meetings that will follow the Washington summit will directly affect our economy, our financial system, our businesses and our jobs.
Getting the international regulatory system in order is also part of the overall confidence equation for the future as well.
And confidence is critical, hence my earlier remark to be absolutely objective about the strengths we in Australia have, as well as objective about the challenges we face.
Confidence is also built on the integrity, the independence and the performance of our financial and economic regulators: The Treasury, the Reserve Bank of Australia, the Australian Prudential Regulatory Authority and ASIC.
These are national institutions. They are first class national institutions. They are national institutions worth defending and they have served this nation well at a time of unprecedented financial and economic challenge. At a time of global financial crisis, all Australian leaders should be supporting our institutions, not undermining them.
To attack these institutions at a time of global financial crisis is not just irresponsible. It is also reckless given the impact such attacks have on confidence and on the real economy.
When people's businesses, people's jobs and people's confidence in our financial institutions are at stake, this is not a time to play political games.
I believe that small business also has a crucial role to play in fortifying our economy during difficult economic circumstances.
Australia's two million small businesses employ four million. Australia's small businesses contribute one third of our nation's gross domestic product. If small business is strong, the overall economy is strong. It is as simple as that.
If small business is held back then the economy is held back and it is as simple as that.
Running a small business can be a tough job at the best of times. I know that from my own experience, having run one for a time myself. While many people depend on you, sometimes the only person you can depend on is yourself.
Customers want deliveries on time and on budget. Suppliers want payment on time.
Employees want reliable hours and payment and career opportunities.
But if there is extra paper work to be done, or another crisis to solve, it's your responsibility, as the owner, to look after it. There's no government policy that is going to make running a business easy but I do believe that we can make it less hard.
And that's what I am here to talk to you about today and that is why the Ministers are here together with you today to hear what you have to say to us. This is a two-way dialogue.
And how we can do this, that is, bring about good policy for the future in an economic climate such as what confronts us at the moment represents a unique challenge to us both.
But I believe we can do it.
We've heard a lot about the global financial crisis but there's been less public discussion of the impacts it has for small business. It is well known that small business is the first to feel the effects of weaker economic conditions.
Customers close their wallets. Orders drop. Cash flow dries up.
Small business is also the first to feel the effects of tighter credit markets. Getting credit in the current environment is not only about business growth and new opportunities, it's about also having sufficient credit to sustain cash-flow and staying afloat.
Recent evidence paints a sobering picture of the challenges facing our small business community.
According to the October edition of the Private Business Barometer published by PricewaterhouseCoopers: sales growth is down from 13.2 per cent to 10.9 per cent in the past year; profit growth is down from 11.3 per cent to 10.3 per cent; hiring intentions have fallen from 46.1 per cent to 26.7 per cent; credit availability is a growth impediment in two-thirds of businesses; and the family home is security to obtain business finance for two-thirds of businesses.
That data precedes the most recent twists and turns in the global financial crisis.
These findings are backed up by the macroeconomic indicators available for Government showing lower consumer and business confidence, lower new housing starts, and lower motor vehicle sales.
These sort of findings have also underpinned the Government's decision to introduce the $10.4 billion Economic Security Strategy last week.
That strategy was designed to provide stimulus to the economy, stimulus to households through payments through the family payments system of $1,000 per child over the next nine months. Payments also to pensioners, single pensioners and married pensioners, $1,400 for single pensioners, $2,100 for pensioner couples - again designed to provide stimulus to the economy.
Beyond that we have been mindful of the impact which the financial crisis is having directly and indirectly on the housing sector.
That's why as part of this economic security strategy we are investing $1.5 billion in the First Home Owners Boost to strengthen the housing sector:
Doubling the First Home Owners Grant to $14,000. Trebling the First Home Owners Grant to $21,000 where a first home buyer chooses a newly constructed dwelling.
These are designed to provide a much-needed shot in the arm for the housing sector and to provide a boost for small businesses such as builders, material manufacturers, and those working in the property market more generally.
By strengthening lines of credit and strengthening consumer demand, the Government is doing its best to strengthen the small business sector in this economy during this difficult period.
As I said before, Government cannot make running a small business easy, but we can make it less hard.
What I'd like to propose today is a government guarantee to pay all of the federal government's contracts, up to $1 million, to small business, on time, within 30 days. That's almost 70,000 contracts a year. And if we don't, the proposal is this: you and small business can charge us interest until we do. We intend to lead by example.
I'd also urge larger businesses to pay on time as well. It makes a big difference to small businesses with cash flow challenges.
Another aspect is procurement. Every year the Commonwealth spends about $30 billion on goods and services. And today I commit the Government to making it easier for small businesses to gain access to Australian Government business.
Following on from the SourceIT template contract design for simple ICT procurements, we're moving to standardise other procurement documents. Agencies will also be required to review their operations and simplify procurement processes.
Greater consistency and simpler processes will make it cheaper and easier for small business to participate in tenders.
I'm also aware that the Tax Office is committed to working with small businesses that are having difficulty in meeting their tax obligations, including allowing for tax debts to be paid by instalments over a period of time.
If businesses are having problems, they should talk direct to the Tax Office. Assistance offered will be based on the taxpayer's individual circumstances.
And today I'm also announcing that we're putting an extra $4 million into business enterprise centres and other registered business organisations to assist in getting information out to the small business community on the sorts of services which are available and on information necessary to negotiate some of the difficult times which will lie ahead.
These initiatives build on our recent economic policies for the broader economy in our stronger commitment to a prosperous small business sector.
Many thousands of small businesses already have access to the advice and assistance through the Government's $42 million Small Business Advisory Centre initiative which provides Commonwealth funding for the first time to 36 business enterprise centres around Australia.
Ladies and gentleman, these are the beginning of the government's response to the challenges that small business faces as consequence of the global financial crisis.
More fundamentally, we're been concerned to ensure that this economy continues to generate positive economic growth. That has underpinned the government's decision to bring forward this significant stimulus package which equals some one percentage point of GDP.
But the stimulus, as I've indicated before, that is step one.
Step two will come in December when the Government unfolds its plans for the beginning of a roll out of our national infrastructure program - a Building Australia program - building infrastructure for the future. Ports, roads, rail, hospitals, education institutions and the rest. All to support the country's long term infrastructure needs. All for continued sustained economic stimulus in what will be a challenging time ahead.
But finally, also in providing the guarantees that we've provided to our banks for their term wholesale funding arrangements. Anchored in this simple principle, that as a business it is absolutely necessary to have lines of access to credit. And therefore, in the face of a global credit squeeze which has come off the back of this global financial crisis, to provide the necessary guarantees by government, unprecedented guarantees by government in this country, to ensure that our banks can continue to access effectively international lines of credit in order to make credit available to business users in this country.
These are the measures we've taken so far. As I've indicated before, we stand ready to take other measures as becomes necessary to maintain continued confidence and stability in the Australian financial system and to continue to support positive economic growth in Australia.
To do that, we need the cooperation and support of the Australian business community, we need the cooperation and support of the small business community within it, and we look forward to your comments today.