IPA chief executive Andrew Conway said a number of recommendations in its 2018 Small Business White Paper are aimed at improving productivity and efficiency of the small business sector, including the introduction of initiatives to improve managerial capabilities of SMEs.
He said the IPA is also asking for a review of capital market efficiency to address the problem of ‘zombie companies’ (those businesses that require bailouts to survive), where too much capital is currently held.
“There also needs to be a review of the regulatory framework around insolvency resolution. Australia has the fourth-longest insolvency resolution time in the OECD. This situation creates resource misallocation and reduces growth opportunities for efficient firms,” Mr Conway said.
Mr Conway said the first Small Business White Paper in 2015 was aimed at policies to arrest the declining productivity of business, including small business.
“Australia’s productivity challenge has been further compounded by a global environment that has seen significant change occur in the United States, uncertainty in Europe attributable to Brexit, rising protectionism, China’s rise as a super power, ongoing technological advances with the advent of the Fourth Industrial Revolution, continuing demographic shifts, transnational cyber crime, climate change and continuing refugee crises,” Mr Conway said.
“However, this global environment cannot be ignored and it is now more important than ever to drive small business productivity and growth, particularly considering it is this sector that makes up more than 70 per cent of employment in Australia.”
