Family business needs ignored, inquiry told
GOVERNMENTS do not fully understand family-owned enterprises whose long-term focus makes them different from other small businesses, a parliamentary committee into family businesses has been told.
GOVERNMENTS do not fully understand family-owned enterprises whose long-term focus makes them different from other small businesses, a parliamentary committee into family businesses has been told.Graham Packer, of family-owned Packer Leather, says the government needs a family business minister and agencies that cater to family-owned business as distinct from a small business minister.He said there was little understanding of the specific needs of family businesses - not always small businesses - and of the owners' desire to pass them on to the next generation."Family businesses have long-term goals, commit their whole-of-life philosophy to making a success of their business in the hope that the next generation will follow on," Mr Packer wrote in his submission to the inquiry. "Surely that is the backbone for a strong and well cared for community."Queensland's Packer Leather has been operating since 1891, employs 92 people and exports to 17 countries. Even so, it has struggled to get financing to buy the land its factory occupies, despite having had the same bank for more than a century. He says banks are too risk-averse and do not value innovation and research and development.With submissions due on Friday, Coalition small business spokesman Bruce Billson is urging family businesses to take part in the inquiry."While family businesses have many advantages and a proven record of success, challenges exist such as when the dining room table becomes the boardroom table and family structures morph into business structures and with policies and laws that inadequately reflect the family business dynamics," he said."These challenges can include communication between family members, senior family members letting go of leadership and ownership control, providing liquidity for family owners to exit the business, securing adequate capital for growth and retirement, and choosing a suitable ownership structure for the next generation."The committee was established this year to inquire into the challenges unique to family-owned and operated enterprises.It is examining the contribution of family businesses to the economy and the structural, cultural, organisational, technological, geographical and governance challenges facing them. It is also looking at access to finance and insurance for family businesses and what it costs them.The Council of Small Business Australia says family businesses can range from small to large businesses and they have different needs."For the larger or wealthier families, where there have often been generations involved in the business, there is much complexity and more to be gained and lost. Therefore structures, succession plans, inheritance and management styles become important and open to scrutiny and at times abuse," the council says in its submission."For the smaller less wealthy businesses they are more focused on day-to-day activity and making an income then they are on structures and succession planning. Indeed in most cases succession planning is about selling the business rather than passing the business on to family members."It says more research is needed to better inform government policies, including the number of wealthy family groups, which sectors they're found in, and the number of family members employed.Family Business Australia says more information is needed to highlight the importance of family-owned enterprises to the economy."Australian governments have thus far failed to recognise and appreciate the importance of the family business sector," its submission says.