Australian Business Burdens Set To Be Made Easier

The Productivity Commission has been tasked by the Australian Federal government to undertake a study that aims to make businesses easier to operate.

The study will address regulatory reform opportunities and evaluate reform outcomes.

This study will replace the commission’s fifth annual review of regulatory burdens on businesses, seek public submissions and in six months will have to report back to the government.

According to Nick Sherry, the minister assisting on deregulation, a key driver of productivity growth is the ongoing regulatory reform which is being recognized by the Gillard government.

“That is why we have embedded regulatory reform as a core government activity, with a comprehensive agenda aimed at reducing red tape for businesses of all sizes,” said Sherry.

“We are driving this reform process both at a national level through COAG (the Council of Australian Governments) and at a commonwealth level through better regulation ministerial partnerships,” he added.

Identifying regulatory reform opportunities and priorities, as well as evaluating regulation reform outcomes will be targeted by the study. Furthermore, lessons gathered from Australia and overseas will also be examined.

These lessons will be the basis for analyzing possible frameworks in order to identify those areas performing poorly.


“Good regulatory reform relies on effectively identifying reform opportunities in order to prioritize the allocation of resources to areas of the highest likely benefit,” said Sherry.

According to the Organization for Economic Cooperation and Development, Australia was one of the front-running countries in February 2010 in terms of its regulatory reform practices.

“The Gillard government is determined to build on this impressive record, by maintaining the momentum of regulatory reform and making it easier for Australian businesses to operate,” said Sherry.

News Source: Sydney Morning Herald »

CBA: Business Credit Not Yet Seen To Go Up

This year is not the time for business credit to surge. This has been seen especially with the country’s biggest lender stating that the “engine drivers” of economic growth are not borrowing cash but are holding on to it.

The major banks’ prediction of a sizeable rebound in lending to small and medium sized enterprises, and the pickup of the number of loans given to companies in the 2 million or less category in September 2010 gave the industry hope of a sustained recovery especially with the increased demand from small businesses. However, these hopes have been stalled by a subdued retail sector and the natural disasters in Queensland, New South Wales, and Victoria.

Business lending in February, according to APRA, increased by 0.6 per cent which worked out at an annual growth rate of 7.2 per cent. This was considered by Deutsche Bank analyst, James Freeman, as a significant rebound.

National Australia Bank leads the charge followed by ANZ and CommBank. Behind them is Westpac. In the regional sector, Bendigo takes the lead. BoQ declared that its lending to the SME sector for the six months up to the 28th of February increased slightly from $100 million to $5.3 billion.

While Deutsche Bank suggests on not dwelling too much on February lending figures, CommBank also said that there had been a slow start to business lending in the first three months of the year 2011.

The bank said that “while there has been some pick-up in activity, we don't expect a boom. This is largely due to the number of businesses sitting on more cash. Instead, we expect growth levels to be steady over the remainder of the year.”

News Source: Sydney Morning Herald »
Image: Travel-Australia.org »

Accounting Changes To Push For Progress

Businesses compete for their market. And with the many companies that come out these days, the competition even gets tougher. Companies and businesses therefore have to strengthen their strategies and do everything in order to attract their prospective clients.

This is one of the many reasons why the leaders of the accounting profession have come to a decision to implement the International Financial Reporting Standards or IFRS by January 2012. The IFRS is part of their goal for change. However, the problem seen is how they will get to that goal.

“It's not a question of where we should go but of how [we should get there] and at what pace," said Deputy Finance Minister Sergei Shatalov.

The IFRS is seen to allow accounting professionals to participate in the formation of a global financial system.

However, the biggest problem seen here is that even if there are only several months remaining before the implementation of the IFRS, there is still no Russian translation considering that the target capital is Moscow.

“There is need for official guidance, official policy and official understanding for the public," said Kirill Altukhov, a partner at audit and advisory firm KPMG in Russia and the CIS.

Furthermore, the impact of the mandatory implementation of the IFRS will only be beneficial to the minority publicly listed companies. All of which have already started using the new system.

On the other hand, Surgutneftegas, has submitted recently its accounts under US generally accepted accounting principles of 2001. Its value has reached $33.6 billion. However, the company has not yet been publicly listed. And that is the problem seen now with the implementation of the IFRS.

Another obstacle to the implementation of the IFRS is the lack of trained professionals. Professors and teachers are also having arguments on the issue.

Despite the benefit of implementing the IFRS, the problems have to be settled first before moving on to the next stage.

News Source: The Moscow Times