Tuesday 23 April 2019, Sydney: The announcement today of the Coalition’s re-commitment to a new $1 Billion Business Growth Fund is good news for Australia’s two million small and medium sized enterprises, says the Australian Investment Council.
“We know that investing in the growth and expansion of Australia’s SME business sector is vitally important to our future economic prosperity. We need politicians across the spectrum to ensure they have the right policies in place to help create a more innovative and competitive business sector that can grow economic productivity and new employment opportunities,” according to Australian Investment Council Chief Executive, Yasser El-Ansary.
“Both the ALP and Coalition understand how important it is that we transition our economy to be more competitive, more innovative and more productive over the years ahead – and much of that will happen as a direct result of our capacity to support the growth and expansion of Australian businesses within domestic, regional and international markets,” said Mr El-Ansary.
“We have been too slow at making progress in implementing the sort of reforms we need to make our economy more competitive through productivity gains and technological innovation. We don’t have any more time to waste in getting on with the hard work of building a more diversified economy that builds on the strength of our past,” he added.
Over the past two decades Australia has slipped down the list of diversified and agile economies, as measured through Harvard University’s Economic Complexity Index. In 2016 Australia ranked 86 for economic complexity* with a score of -0.592, only just above Iran and below Senegal. Australia’s 2016 ranking is the lowest of any developed market economy, and compares unfavourably with the equivalent ranking in 1996, when Australia was listed at number 57 on the index.
“One of the smartest strategies we can use to improve the competitiveness and productivity of our economy is to ensure we grow the pipeline of private capital investment into innovative Australian businesses across all sectors of the economy,” said Mr El-Ansary.
As part of this year’s federal election campaign, the Australian Investment Council released a policy roadmap setting out 13 recommendations for reforms that will help to build a stronger Australian economy for the future. Investing for Growth – Policy Proposals for the incoming Federal Government details the important role that targeted policies, such as government co-investment programs including the proposed new Business Growth Fund, can play in key sectors of the market that haven’t traditionally attracted a depth of capital investment (see Recommendation 7).
Over recent months the Australian Investment Council has been involved in the preliminary design process with some of Australia’s leading banks for the proposed new Business Growth Fund. While more work will need to be done to ensure the design of the program delivers on its core objectives, the over-arching framework has been supported by the Australian Investment Council.
*“Economic complexity” is a measure of the knowledge in a society that gets translated into the products it makes. A country is considered ‘complex’ if it exports not only highly complex products (determined by the Product Complexity Index), but also a large number of different products. The more complex a country's economy, the stronger its infrastructure and the more adaptable it is to market changes. (source: http://atlas.cid.harvard.edu).