New SME association with ties to publisher rules out lobbying role

A new small business industry association with close ties to a publicly-listed publisher has ruled out lobbying the Government on SME issues just days after receiving public backing from small business minister Nick Sherry.

The SME Association of Australia was officially unveiled by Sherry on Friday, with the minister saying: “I hope your new organisation will flourish in its commitment to the wellbeing of SMEs. It’s a commitment shared by the Government for our most significant business sector.”

The non-profit association says it will work to “link small businesses to other businesses and government” via events, networking and group buying. But it will not directly lobby government on any of the issues that concern small businesses.

It is targeting 50,000 members over the next five years, with individual memberships starting at $110 per year.

Benefits of joining include a subscription to MyBusiness magazine, the official publication of the association. MyBusiness‘ annual exhibition, MyBiz, is also included in the package.

MyBusiness is published by CommStrat. The SME Association of Australia says on its website that it is supported through “a service agreement with CommStrat Limited for the provision of administration, education and membership services to its members”.

CommStrat, which was established in 1963 and has been listed on the Australian Securities Exchange since 1986, is a media company which publishes a range of magazines, websites and publications in print and online. It also has a conference and events arm.

The connections between CommStrat and the SMEAA run deeper than the services agreement – the founder of the SMEAA, Matthew Johnson, is also the chief executive of CommStrat.

Johnson joined CommStrat as chief executive in May 2010 (he was previously managing director of DMG World Wide Media Australasia) and produced a solid result in his first year in the top job.

According to the company’s annual report, revenue in 2010-11 increased 23% to $11.3 million, while net profit more than trebled to $804,070. The company also reduced its debt load during the period by $550,000 to $3.5 million.

In its review of the 2010-11 year, the company makes specific mention of the establishment of an “association services” division “which allows industry associations to outsource a broad range of functions to CommStrat”.

CommStrat has a market capitalisation of $5 million. Its share price hit a five-year peak of 11.5c in November 2006 but has not traded above 1c in the last 12 months.

Caroline Hong, a former dental surgeon and now CEO of SMEAA, tells StartupSmart that the association’s motives are “completely altruistic”.

“Other websites, like yours, are doing a good job, but the market is huge and not everyone can possibly reach the whole market,” she says.

“We are a not-for-profit that is about linking people and helping small businesses grow and market themselves.”

“My background is in associations. They have to start somewhere, sometimes with a sponsor. We decided to adopt MyBusiness as our official magazine.”

“Matthew Johnson wears two hats, like many other people. We plan to grow, but we haven’t set a date when we will be independent (of CommStrat). We just want to benefit society as a whole.”

“Many organisations are very good at lobbying on behalf of small businesses. We’ll let them continue. We won’t be spending our resources on that.”

Sherry said in a statement he was comfortable launching the new association.

“As I said in my speech, representative organisations are relevant and important participants in the nation’s political and policy debate.”

“In any public policy space, especially one as deep as the small business sector, it is important to have a diversity of views in relationship with Government.”

“I value any opportunity to spend time listening to small business people and their representative organisations.”