ELEMENTS within WA’s backpacking industry have criticised the Federal Government’s business start-up scheme, the New Enterprise Incentive Scheme (NEIS), despite its success.
Under the 15-year-old scheme participants can remain on Centrelink income support payments while NEIS providers – private companies contracted to train and mentor participants for a 12-month period – become self-supporting and independent.
Workstay proprietor Don Hyland – whose business helps backpackers find short-term employment in regional areas – told WA Business News the popular national scheme may be becoming “unwieldy” as it prepared to spawn a second locally produced backpacking magazine, Bakpak WA, next month (see Media and Marketing, page 17).
According to the NEIS charter, business ideas will not to be supported where there is an existing business providing the same service, unless it can be shown that there is a demand for the second business.
Go West, a locally produced handbook targeting backpackers and adventure tourists to WA, was established four years ago, also under NEIS. Mr Hyland and Go West publisher Jess Comber are concerned for the publication’s future with the launch of Bakpak WA.
Mr Hyland said although NEIS was a good scheme in-principle, he didn’t believe sufficient research had been undertaken, either by the new publication or its NEIS scheme provider. The marketplace was already overcrowded, he told WA Business News.
He said this was the second case he knew of where a scheme-funded business would threaten an existing business.
Ms Comber said she was concerned about NEIS helping to set up the second publication in an uncertain market.
“I don’t want to bite the hand that fed me,” Ms Comber said. “But it [the NEIS scheme] has in its charter not to do this type of thing.
“Perhaps it is a bit of a fuzzy line when you look at the likes of things like hair dressers looking to get started.
“But I think there are over 600 people involved in the program now and perhaps it has become a bit unwieldy.”
Department of Employment and Workplace Relations WA employment relations manager Ian Richards said the claims against NEIS were unfounded.
He said that, as with all NEIS participants, Bakpak WA was required to submit detailed financial projections and research to its local NEIS provider, Enterprise Management Consulting Service, before any recommendation on viability was made.
Mr Richards said a survey of 50 local backpacker-related businesses demonstrated an opening in the market, with more than 40 per cent saying they would like to advertise, only 29 per cent aware of any existing backpacker publications and just 5 per cent aware of the Go West Handbook.
Mr Richards also said the two magazines’ formats and frequencies were different.
Bakpak WA publisher Haley McKee said the scheme’s requirements were very strict and the magazine’s launch would break a monopoly on the local market.
“I’ve had an amazing response [from businesses],” Ms McKee said.
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