Michael McCormack, the new federal small business minister, has been set his first task.
If small firms are to be the driving force to lift employment, governments must make it easier to employ.
A new survey by business software provider MYOB found 75 per cent of small and medium sized enterprises have experienced at least one headache during the employment process.
Finding new staff, dealing with payroll compliance, the ability to dismiss employees and end of year paperwork were listed as the top pressure points for small business owners.
The findings in a survey of over 1000 business owners comes as recent figures showed the jobless rate ticking up to 5.8 per cent in June and youth unemployment at 12.7 per cent.
MYOB's Alla Keogh says while SMEs are a possible solution to the unemployment problem, state and federal governments need to work with the sector to make an impact.
She welcomed initiatives like in South Australia where the state government announced earlier this month its 140,000 SMEs will be able to claim a $10,000 cash grant for each new employee they hire.
The NSW budget also revealed a $6000 payroll tax rebate per new hire for businesses with under 50 employees.
"Governments at both state and federal levels must continue to recognise that if small and medium businesses are going to be a tangible solution to rising unemployment figures, they will need economic support in order to encourage growth in their workforce," she said.
