Treasurers to receive business report

Paul Osborne, AAP Senior Political Writer
(Australian Associated Press)

 

A new Treasury report on why business investment is not meeting expectations will be delivered to the state and federal treasurers’ meeting on Friday.

Treasury secretary John Fraser told a parliamentary hearing on Wednesday it was expected business investment would continue to strengthen, “supported by increasing demand and low financing costs”.

But he said Treasury had consulted with small, medium and large businesses to find out why investment was “underperforming relative to expectations”.

“We met with the CEOs and CFOs of the top ASX-listed companies and the chief executives of peak industry bodies, while (small business ombudsman) Kate Carnell led consultation with SMEs,” Mr Fraser said.

AAP understands small business operators raised concerns during the consultations of poor access to finance when seeking sums in the hundreds of thousands of dollars, as opposed to tens of thousands, to expand their operations.

Banks were showing a preference for businesses with significant equity in bricks and mortar.

Small businesses also voiced concerns about cost pressures from the July wage rise and a doubling of power bills.

It was suggested governments could look at ways to free up banks and other lending institutions to support SMEs, as well as encourage superannuation funds to invest.

The treasurers, meeting in Sydney, will also be briefed by Productivity Commission chairman Peter Harris on his latest report, Shifting the Dial, which recommends reform in education, health, transport, housing, cities and energy.

Distribution of the GST and the new national housing and homelessness agreement will also be on the agenda.

NSW Treasurer Dominic Perrottet told AAP the GST was a crucial issue.

“I’ve made no secret of my views on the redistribution of GST and how heavily NSW is short-changed under the horizontal fiscal equalisation model and we will be making our case for change on Friday,” he said.

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