The federal government has made an additional 2300 places available to new business owners under its New Enterprise Incentive Scheme (NEIS).
In the 2016 budget the federal government pledged to invest more in the scheme and said at the time that an expanded NEIS program would come into effect from December 2016.
The aim was to bring the total number of places available in the scheme to 8600 — something that Small Business Minister Michael McCormack says the government achieved last week.
The NEIS offers support and training for new small business owners and young people who “want to be their own boss”.
Support offered through the program includes mentoring, accredited training, and even income support where eligible.
The scheme is intended to make it easier for young job seekers to pursue a life as a small business owner, with a number of “Being Your Own Boss” workshops running each year as a part of the NEIS.
Last May, the government said the planned expansion of the NEIS would cost $89 million over four years, and Minister McCormack said in a statement last week the changes will offer “practical” assistance for entrepreneurial jobseekers.
“This announcement will help those who want to have a go with practical skills they can use in small business and long-term assistance to see their dreams become a reality,” McCormack said.
“As I travel across Australia meeting small businesspeople inside their operations, I have met a number of young people who have the energy and determination to make a success of their small business.”
“These are the people who create the jobs and opportunities for Australians which our communities and our economy needs.”
NEIS a good start, but better financing options needed
Michael Kaff, a former small business owner who ran as an independent Senate candidate for the Gold Coast at the 2016 election, told SmartCompany he supports the NEIS scheme but believes some changes should be made to make it more helpful to young job seekers.
Kaff ran his own business until he sold it in the 1990s and says he’s has seen both sides of the NEIS system.
“I have been through NEIS and I’ve taught on NEIS, so I’ve seen it from both sides,” Kaff says.
“Anything, where the government is helping more people to start their own business, is a good thing.”
Kaff believes the period of time where the government provides income support is not enough, noting it takes “a good year to get a business up and running”, and thinks the income support period should be stretched from 39 to 52 weeks.
An increase in the period where job seekers are ineligible to go on NEIS after having used it once would be welcomed, says Kaff. Currently, that time period is three years.
“I’ve seen some people go on the program every three years with a new business, so some people take advantage of the scheme. I think we need a longer period before people are able to go back on NEIS,” he says.
While Kaff believes the government can “never have enough” support for new business owners, he welcomes the increase to 8600 NEIS places, calling it a “good start”.
While the program does a good job of educating young business owners, Kaff says he’d support better business financing through the scheme.
“NEIS does a good job but it doesn’t help them at all with business financing. They get the initial training, then they’re just let loose,” he says.
“If you don’t have initial funding, where’s the money going to come from? The government should provide them with a low interest or no interest loan to finance the business. Additionally, once the business is up and running it should pay no tax on its first year income, and in the second year low tax.”
SmartCompany contacted Minister McCormack’s office for further information but did not receive a response prior to publication.
This article was originally published on SmartCompany.