State Government investment in its small business portfolio has fallen by two thirds since Jay Weatherill became Premier, with the budget allocation now equating to only $9 a year for every business in the state employing fewer than 20 staff.

That’s despite a bid to make South Australia “the best place to do business” being identified by the Government as one of its 10 Economic Priorities.

The budget for small business, incorporated into the new mega-department of State Development but overseen by Treasurer Tom Koutsantonis, has incrementally fallen from $4.2 million in 2010-11 to $1.4 million in the current financial year.

“They’re just not taking it seriously at all,” Opposition Leader Steven Marshall told InDaily.

“All the programs that have supported small business have essentially closed … We’re going to spend more on television advertising attacking the federal budget than we are on small business in SA.”

From eight ministerial staff employed in 2012-13 to support small businesses in SA, there are now only six, co-ordinating services for 148,058 enterprises.

“In other words, we’re spending nine bucks per business per year,” Marshall said, noting that the total annual spend is now less than one day’s interest on the state debt.

According to the Opposition, this has been coupled with the demise of a raft of programs, including Business Enterprise Centres, the Youth Entrepreneur scheme, the Small Business Emergency Helpline, the SME-Investment Development Program and Innovate SA, along with a $300,000 reduction in the budget for the Small Business Commissioner in the 2014-15 budget.

However, recent weeks have seen the announcement of a raft of new targeted initiatives, including Small Business Contact Service, the South Australian Young Entrepreneur Scheme (SAYES) and the Business Coaching and Mentoring program. Just yesterday, Labor announced a new Micro Finance Fund, offering $1.7 million over three years to help entrepreneurs develop business concepts.

Koutsantonis rejects the Opposition critique, saying the Government’s “commitment to the small business sector is reflected by reforms and initiatives delivering millions of dollars in savings and creating opportunities for small and medium businesses to grow and employ more South Australians”.

“Last month, the Premier and I announced the first participant of the State Government’s $50 million Unlocking Capital for Jobs Program,” he said in a statement.

“The program will allow local small to medium enterprises to apply for financial guarantees from the State Government to help them grow and create jobs by bringing forward plans for expansion or transformation.”

However, Australia Bureau of Statistics figures show SA had the lowest business entry rate of any mainland state or territory in 2013-14, at 11.4 per cent compared with the national average of 13.7 per cent. While the survival rate of businesses hovers around 65 per cent, the state had 14 fewer business operating by June 2014 than it had the previous year.

“We’re the only state in Australia which didn’t create businesses (on aggregate), which is quite unusual … we’ve always created more businesses than have gone out of business,” Marshall said.

“And that’s the problem: more businesses are closing than opening, and we have the lowest start-up rate (on the mainland) but we’re now spending a third of what we were spending four years ago.

“And a consequence is that so many young people are giving up hope, which is reflected in the mass exodus of young people away from our state.”

Business SA CEO Nigel McBride said small to medium enterprises (SMEs) represented 98 per cent of all businesses in the state, and those employing fewer than 21 staff accounted for 88 per cent of private sector employment.

He said cutting programs was only justified if they “weren’t working”, but added, “if they weren’t working, what are the alternatives?”

“Given the pressure on SMEs, we need to do everything we can to get the sector moving,” he said.

“Anything that’s actually seen to be going in the opposite direction – cutting funding rather than increasing it – would seem to be counter-intuitive, at a time we need to create jobs.

“The new jobs have got to come from the private sector, and most of the sector in this state is SMEs.”

It’s a perspective shared by Marshall, who says “if you look at where we’re going to create jobs, it’s got to come from the small business sector”.

“The wellspring of new employment has always been the small business sector, (but) this Government’s got a silver bullet mentality, focussing on one big project at a time as a panacea for all our problems,” he said.

He said the Liberals, whose ill-fated election slogan was “Backing business to grow the economy”, had advocated “more money going into start-ups” along with reducing taxes and regulations.

“There’s just no doubt that’s the great opportunity for SA,” he said.

Koutsantonis emphasised supporting SMEs was about more than just dollars, pointing out the Government’s initiatives “are complemented by the expert advice, support and assistance provided by the Office of the Small Business Commissioner and the Office of the Industry Participation Advocate”, who advocate during disputes and compliance issues and “ensure local businesses leverage maximum opportunities from the $3.8 billion of contracts let annually by the State Government”.

“In addition, we have established a Small Business Roundtable to improve communication between the State Government and the business community and a Simpler Regulation Unit to work with industry to improve regulation that better supports jobs growth,” he said.