Declining productivity calls for urgent action to ensure quality of life: IPA CEO
The productivity growth rate in Australia has declined dramatically over the past 20 years, the CEO of the IPA has warned.
The CEO of the Institute of Public Accountants, Andrew Conway, said at the IPA Deakin Small Business: Big Vision Conference that the decline in productivity growth must urgently be addressed to protect the quality of life for future generations.
“The productivity growth rate in Australia has declined dramatically over the past 20 years, so we need to fix this if we are to protect Australia’s standard of living," warned Mr Conway.
"We need to take some of the burden away; to support small business to achieve the best that they can," he said.
Speaking to an auditorium of accountants and policy makers, Mr Conway explained that while the IPA has had some successes along the way, including establishing the SME Research Centre, it still has much work to do.
"We still have much work to do to address Australia’s productivity crisis; we need government, regulators and policy setters to think ‘small’ first when it comes to forming policy," he said.
Access to capital main barrier
During her presentation at the IPA Deakin conference, the Australian Small Business and Family Enterprise Ombudsman Kate Carnell said that access to capital still remains the biggest barrier to growth in the small business community.
Ms Carnell noted that despite the efforts of the government and the rapidly increasing presence of fintechs, a huge gap in the small business lending space still exists.
She explained that although fintechs numbered almost 700 in 2018, growing rapidly from only 100 in 2014, they alone can not bridge the gap.
“Most fintechs are not happy to lend above $100,000, some do go to $250,000, but if you happen to be a small business looking to expand that is not enough. A refit costs more than that,” said Ms Carnell.
She judged that the pool of lenders in the small business space needs to expand.
The Australian Banking Association (ABA) recently acknowledged that small business loan applications have fallen by 33 per cent since 2014.
Ms Carnell noted she is hopeful that the government's business securitisation fund will push second tier lenders to focus on small business lending.
"The business securitisation fund will hopefully mean that there will be some access to more affordable capital for those second tier lenders to lend and that's the plan. That will create more competition in that space," said Ms Carnell.
The hope is that this initiative will grow the market.
"$2 billion from the government is OK, but it is little in the overall scheme of things. I know that the government is keen for that to encourage a market to start in that capital for small business lending space," she said.