Following opposition leader Bill Shorten’s Budget reply speech last week, in which he announced a package that would partially guarantee loans for some small businesses, IPA chief executive officer Andrew Conway said he supported more assistance for small business and called for a loan guarantee scheme to be introduced.
“It is pleasing to see that such a scheme is being contemplated by the opposition in its 2015 Budget response,” he said.
“In our view, a loan guarantee scheme would help increase the availability of much-needed, affordable loan finance to the small business sector."
Mr Conway said Australia is actually one of the only countries in the developed world not to have such a scheme.
“A limited State-backed guarantee would encourage banks and other commercial lenders to increase loan finance available to small business at affordable rates," he added.
Mr Conway said access to responsible and affordable finance will help many small businesses reinvest in their businesses and help create new ideas, new capacity and new jobs.
However, he also accepted that much work would need to be done to establish a successful scheme.
“We appreciate that the scale of a potential program needs to be established in a detailed feasibility study as this determines the parameters of the initial and ongoing demands on the Government,” Mr Conway said.