Small Bizz Buzz: Banking Code Dismissal & Federal Government boost for SMEs

From the Small Business Ombudsman claiming the banking code is unfair for SMEs to the Federal Government developing economic incentives for small businesses, here's what made small business news this week.

Claims Banking Code Unfair to Small Businesses

The Small Business Ombudsman has called for a major overhaul of the Banking Code of Practice, amid claims of its unfair treatment of small businesses.

The appeal from the Ombudsman, Kate Carnell, followed findings from the interim report into the banking sector.

Banking Royal Commissioner Kenneth Hayne reported the, “chief protection for small business borrowers remains the code.”

But Ms. Carnell questioned the reliability of the code to protect small and medium enterprises (SMEs). 

“We have examined the code clause by clause and found banks can still change their risk appetite and call in loans with no notice,” said Ms. Carnell.

“We also found that each clause that provides notice periods is offset by a clause giving the bank the right to disregard if, in their opinion, they need to.”

The Ombudsman also recommended looking at how a code of conduct could be applied across the entire financial service sector.

Federal Government Policies to Help Small Business

The Morrison government is set to develop a suite of economic incentives aimed at boosting small businesses, ahead of the federal election campaign.

The initiatives being worked on include increased access to funding, an improved tax dispute resolution service with the ATO, and a campaign to help small business get paid quicker by their bigger counterparts.

According to the Australian Financial Review, the development of the policies is being undertaken by Treasurer Josh Frydenberg, Small Business Minister Michaelia Cash, and Assistant Treasurer Stuart Robert.