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Katrina Hodgkinson NSW Minister for Small Business

Minister replies to questions on changes to NSW small business programs

Today we received the answers to the questions editor Jen Bishop put to NSW Small Business Minister Katrina Hodgkinson last Thursday, regarding the axing of SMB events in New South Wales.

While we appreciate the clarification she has given on some aspects of the changes to small business programs, we are disappointed that several of the questions have not been addressed (highlighted in red). We have reproduced the Q&A in full below.

There is no answer to the question of why the axing of Small Business September and other mentoring programs wasn’t mentioned at the same time as Small Biz Connect was announced.

There is also no answer to where the data is that proves people do not want small business events or that they would prefer something different. We would like to see evidence of this quantitative and qualitative analysis.

There is also no answer as to whether past participants, sponsors, mentors or contractors were consulted. This leads us to assume they were not. It is questionable whether international experience showing telephone support works for small business is relevant in Australia. And why do these events work in other states like Victoria, but not here in NSW?

There was also no response to the question around Micro Biz Week having grown significantly in the last three years. The Minister also avoided the question of whether a revamp, rather than completely getting rid of the programs, was ever considered.

Q1 – The programs are being cut and the IP is being released to contractors but is the State Government still funding them?

The NSW Government is committed to backing small business in NSW and as part of this commitment we are dedicating $5 million for the delivery of small business support services under the Small Biz Connect program.

Under the new program, small businesses will have access to a State-wide network of skilled small business advisors funded by the NSW Government.

Mentoring programs such as the Women in Business and the Young Entrepreneur Program will be available to small business across NSW through Small Biz Connect and other providers.

Stage 1 of the Expressions of Interest (EOI) will assist the Department to canvas a range of methods for delivering small business advisory services based on local needs.

The NSW Government is determined to establish a contemporary program that ensures improved local regional coverage and whose effectiveness is measured by outcomes.

Q2. Why was getting rid of the events not announced at the same time as Small Biz Connect? Only two weeks later was it hailed as a replacement?

NSW has underperformed in assisting small businesses compared to other states. Many businesses in important economic regions of NSW currently have no or limited access to local business support services.

There has recently been a degree of optimism that small business confidence is starting to pick up, however, there is a long way to go overcome systemic challenges they face. While small business events can be a great way to get out and network, as part of our commitment to back small business, the NSW Government has decided to redevelop the existing Business Advisory Service (which expires on 30 June 2012) into the Small Biz Connect program.

NSW Trade and Investment will make the intellectual property associated with programs such as the Women in Business program available to all current BECs, all future Small Biz Connect providers and local councils, at no cost.

This will broaden the accessibility of these programs across the State and allow more small businesses to benefit from these programs through better connected services.

Q3 + Q4 – Releasing IP to a contractor does not ensure a program is properly managed and that trainers/facilitators are accredited. What measures have you put in place to ensure this? How will you ensure the effectiveness of this new scheme?

Small Biz Connect will be managed by the Department who will monitor the performance of contractors and business advisers engaged by contractors under the new program. The program will be based upon a web-based diagnostic system which also includes a mandatory reporting mechanism. Regular performance meetings will be scheduled between the Director, the contractors and business advisers so all contractors can work collaboratively and adopt continuous performance improvement.

Q5. Mentors currently provide their services for free. If this becomes a pay as you go service, how can it be affordable?

The NSW Government is committed to providing relevant and affordable services for small business operators across the State.

Q6. Small Biz Connect already exists (as an online portal for the current mentoring programs). Is the “newly announced” $5 million Small Biz Program new or part of the existing program?

Small Biz Connect is a new, contemporary program which will provide high quality support and advisory services for small businesses across NSW. The online portal will be retitled once the new program becomes operational.

Q7 + Q8 + Q9 – The Small Business Commissioner consulted with 1% of the small business community. Did she consult with current participants, past participants, mentors, contractors or sponsors? Where is the data to prove the findings that people don’t want events?

The Small Business Commissioner has undertaken broad consultation and a combination of qualitative and quantitative analysis to identify what assistance to small business is the most effective.

International experience has demonstrated that the most effective form of assistance to small businesses is through a two-pronged approach of an extensive telephone-based helpline (in NSW this operates through the Office of the Small Business Commissioner) and an intensive business development service (the recently announced Small Biz Connect – a widely accessible and networked support and advisory program).

The process for developing Small Biz Connect is through an Expression of Interest under which respondents, including contractors under the Business Advisory Service, are being asked to suggest ways in which the services can be improved and their positive impact can be measured.

NSW small business operators can expect positive and practical plans from the NSW

Liberals & Nationals Government. Small Biz Connect will place a heavy emphasis on performance/outcomes and will provide expanded and deeper support for small businesses across the State (especially outside of major regional centres).

The NSW Government is of the view that small business events can be a great way to get out and network, but in these times of economic uncertainty, it is important for small businesses right across the State to know that Government is standing alongside them for support and advice to help them start, grow and prosper.

The Business Advisory Service Contracts for the current program expire on 30 June

2012. The Government is using this opportunity to refocus its resources on improving small business performance and growth by expanding small business support at a local level.

Q10. One of your press releases says there will be other events. Can you please advise what the current event strategy is?

To meet local needs, this will be determined at a grass roots level in each of the State’s regions by the successful local Small Biz Connect provider.

Q11 – If contractors and BASs are meant to run these events, is the funding for these events coming from the $5 million? Will this also include covering the cost of infrastructure like rent, vehicle expenses and wages?

Respondents to the Expression of Interest have been advised that the emphasis of Small Biz Connect will be on providing enhanced services to small business rather than overheads.

This is in line with the operation of the Commonwealth’s Enterprise Connect program.

Funding has been significantly increased over the existing Business Advisory Service and is being provided to boost the level of face to face support and the number of businesses supported under the program – especially in regional NSW.

Q12 + Q14 + Q15

MicroBiz Week and Small Business September touched over 5,000 people per program, do you expect the one-on-one advisory service to touch that many?

MicroBiz Week has grown significantly in the last 3 years. Isn’t this evidence it is needed? Small Business September might have needed to be changed and revamped rather than cut altogether.
Was this ever considered?

The small business events program and networking initiatives, including Small Business September have mainly been based on ‘touching’ as many small businesses as possible.

The NSW Government believes there is a clear need for an effective program which

demonstrates clear linkages to NSW 2021 growth objectives, and a program that will achieve longer term and improved outcomes for small business.

Preference has now been given to a comprehensive program that will focus on achieving strong outcomes, not just outputs.

Under the $5 million Small Biz Connect program, each region in NSW will see an expansion of small business advisory services at a grass roots level.

The Small Biz Connect provides an opportunity to look at what local networks already exist or can be developed and leveraged to boost outcomes for small businesses.

Small Biz Connect providers, local councils, existing program providers and BECs will be given access to the IP from the Department’s programs and will have the opportunity to run events if they so choose.

Q13 – How do you propose to get the information out to a wider audience?

All range of communication channels will be considered to maximise the reach of the new program.

Q.16 – Can you clarify over how many years the $5 million will be spent?

$5 million per annum has been allocated to Small Biz Connect for 4 years.