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Efficiency of Australian businesses has fallen below the national median, prompting a call-out to the government to reform key productivity triggers.
The Institute of Public Accountants (IPA), which represents the interest of small businesses in Australia, is calling for a rise in efficiency of the small business sector.
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The call-out follows the association’s small business white paper release, which highlights a lacklustre performance from Australian business.
“Among the findings is the fact that the average level of efficiency in the Australian business sector is 0.81 [of a percentage point] (the median level is at 0.85 [of a percentage point]). This implies that value-added in the business sector could potentially be increased by 15 to 19 per cent using the same amount of capital and labour inputs and the state of technology,” said IPA chief executive Andrew Conway.
There are several measures the federal government could take to boost business productivity, according to the IPA, ranging from tax concessions to ground-up reform. They include:
- Encouraging business start-ups to stimulate efficient, dynamic resource reallocation
- Introducing initiatives to enhance the technological absorption rates in “older firms”
- Introducing supply-chain efficiency initiatives
[Related: Weakening property prices could leave SMEs exposed]
