Efficiency of Australian businesses has fallen below the national median, prompting a call-out to government to reform key productivity triggers.
The Institute of Public Accountants (IPA) – which represents the interest of small business in Australia – is calling for a rise in efficiency of the small business sector.
The call-out follows the association’s small business white paper release, which highlights a lacklustre performance from Australian business.
“Amongst the findings is the fact that the average level of efficiency in the Australian business sector is 0.81 per cent (the median level is at 0.85 per cent). 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:
- Encourage business start-ups to stimulate efficient, dynamic resource reallocation
- Introduce initiatives to enhance the technological absorption rates in ‘older firms’
- Introduce supply-chain efficiency initiatives