NAB Group Chief Executive Officer and Managing Director – Ross McEwan
As published in The Australian on 17 July 2020.
The pandemic has shaken our economy and the livelihoods of many Australians.
As the spike in Victorian infections shows, we will be living with uncertainty for some time and the path to recovery won’t be straightforward.
It’s an unpredictable and unprecedented health and economic crisis, and there’s no playbook.
Many people are suffering. From an economic perspective, small businesses, and the people who work in them, are among those suffering the most.
Our economy has always been powered by our small and medium-sized enterprises. They comprise 99 per cent of all Australian businesses, contributing 56 per cent of total production in the economy.
Two out of three working Australians are employed by these businesses, so it comes as no surprise that many households suffer when business conditions deteriorate.
NAB sees first-hand the harsh economic realities many of our business customers are facing. But this environment has also shown us the potential of getting behind shared goals.
Since COVID-19 hit, I have been talking to leaders of businesses, big and small, to understand what they’re dealing with and how the bank can help.
I have heard tough stories about businesses that have fallen to zero revenue overnight.
I’ve heard how instrumental the JobKeeper program has been to retaining staff, and how loan deferrals have given businesses much-needed time.
I’m also hearing how quickly they’ve innovated and adapted; shifting businesses online in a matter of weeks or finding new ways to speak to their customers.
And when our bankers speak to their customers, their conversations are as much encouragement as they are financial — to say, “you’ll get through this”.
Faced with complex challenges, it’s not only our financial advice they need, it’s a listening ear to make sure they know they’re supported. I’m buoyed by the optimism that exists in the face of this crisis.
There are many very good small businesses in this country and we are confident that a good business before COVID-19 will most likely have a positive future on the other side of the crisis. If we can see a positive future, we will work with that business to get it through.
We rely on our SMEs to build workforce skills, disrupt and challenge our markets and create jobs for Australians.
It’s a critical goal for our nation to keep supporting that entrepreneurial spirit. For our economy to recover and then grow, we need to act to help SMEs prosper.
Return to ‘normal” not enough
But it won’t be enough to return to “normal”. SMEs were already facing tough conditions before COVID-19 hit, and those conditions have only intensified.
Family businesses, local shops, the cafes where we buy our coffee — they have been stifled for many years now.
When it comes to procurement contracts, SMEs have been overlooked by big business because scale is often an overweight consideration.
And for small businesses, compliance has a huge impact. A worker might be paid at five different rates within a single 14-hour working week. This is complex red tape taking up time.
Business owners don’t want to spend Sunday afternoons sorting out administrative issues when they could spend them with families or growing their businesses.
If we were to remove administrative burdens on small businesses by only five hours a week, I expect we’d see a big productivity uplift.
We’ve seen what’s possible through COVID-19. NAB has been working closely with government and industry to support our customers to the other side of this crisis. This collaboration has been one of the strengths of our response as a nation and why, as tough as it still is, Australia is doing better compared with other parts of the world.
Need to look beyond
We also need to look beyond. We know that co-ordination and action by industry, governments and regulators can address some of the challenges that have held the sector back.
Our government has shown its willingness to find practical solutions to boost the economy. Now is the time to use that same willingness and work together to make our economy more accessible for SMEs. This is our shared responsibility.
New research by NAB, prepared by AlphaBeta, identifies eight actions we can take. These include making it easier to hire new staff, cutting regulation, ensuring SMEs are paid faster to increase cashflow, harnessing the power of digital tools, opening procurement opportunities, lifting SME management capability and improving state business conditions.
We all have a part to play in breaking down these barriers. I expect all NAB’s SME suppliers to be paid in less than 30 days. That’s our responsibility and it’s why we signed on to the Supplier Payment Code. NAB currently pays over 90 per cent of our SMEs suppliers within 20 days and that’s the right thing to do.
We’re also giving our SME customers access to a free digital health check to improve their online presence. This is more critical than ever, especially for those operating under social distancing restrictions.
There is more we can do to make life easier for our SMEs. It won’t be just one big change. It will take a series of small moves across industries and governments to get our economy back up and running again.
As we deal with the effects of the COVID-19 pandemic, we have to think about long-term growth creation.
Small and medium businesses will be critical to our country’s ongoing prosperity. If we worked together to ease burdens on SMEs enough for them to hire one more person each, we’d quickly get our economy firing up again.
Let’s take the opportunity we have now and create the foundations for stronger Australian small businesses.
Read the full report here: Supporting Economic Recovery: What we can do for Small Business