LIFT PRODUCTIVITY TO SAVE THE ECONOMY
Australian small business productivity and efficiency must lift significantly if economic decline is to be avoided, according to the Institute of Public Accountants (IPA).
The issues of productivity and efficiency feature heavily in the latest Australian Small Business White Paper released by the IPA Deakin SME Research Centre.
“Our first Small Business White Paper in 2015, was aimed at policies to arrest the declining productivity of small business,” said IPA chief executive officer, Prof Andrew Conway.
“Australia’s productivity challenge has been further compounded by a global environment that has seen the election of Donald Trump as US President, uncertainty in Europe attributable to Brexit, rising protectionism, implications from the rise of China as a super power, ongoing technological advances with the advent of the Fourth Industrial Revolution, continuing demographic shifts, transnational cybercrime, climate change and continuing refugee crises.
“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.
“Our 2018 White Paper which has been based on significant research and insight gathering, makes a number of recommendations to improve productivity and efficiency of the small business sector.
“From a productivity perspective, we want to see the introduction of initiatives to improve managerial capabilities of SMEs.
“We are 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,” said Prof Conway.
For more detail on the Australian Small Business White Paper go to: https://www.publicaccountants.org.au/news-advocacy/small-business-white-paper