ACCI Tells Senate Inquiry: Reduced Bank Competition Is Hampering Economic Recovery
15 December 2010
The Australian Chamber of Commerce and Industry, today released new data showing that even though the economy is experiencing a patchy recovery, the experience of small and medium businesses in accessing finance for growth is getting worse, not better.
ACCI also announced that it has accepted an approach by the National Australia Bank to meet ACCI’s Business Finance Taskforce, and has extended a call for dialogue to all major banks.
Giving evidence today in Canberra to the Senate Economics Committee Inquiry into Banking Competition, ACCI's Chief Executive Peter Anderson said that recent surveys by ACCI and ACCI members showing a worsening of business experience in securing credit over the past 12 months were a ‘wake-up call’ to the market and the parliament.
“ACCI’s survey shows that 25.4% of businesses now report that changes in bank lending criteria negatively affect capital expenditure plans. This is up from 22.9% a year earlier, even though financial markets are stabilising," he said.
A recent VECCI-Victoria University study showed a similar trend. 30% of businesses reported passing up business opportunities in the past two years because attempts to access external finance were unsuccessful and 34% of businesses saw the issue as a major or moderate obstacle to growth.
ACCI expressed concerns that lack of access to standard business finance was forcing more Australian small businesses to secure credit on credit cards, at higher costs. On an international comparison, Australian small business had the highest reliance on credit cards for finance (62.6%) compared to less than 45% for businesses in Singapore, Malaysia and Hong Kong.
ACCI Deputy President Richard Holyman, addressing the Senate Committee, said that these lost investment opportunities never show up in economic data, but are real and cost jobs.
The co-chair of ACCI’s Business Finance Taskforce, Andrew Scobie, also appearing before today’s Senate Committee hearings, applauded NAB for their willingness to enter dialogue with representatives of the business sector, and encouraged other major banks to do likewise.