A Shorten Labor Government will support a 21st Century regulatory framework for access to financial information for small businesses.
If the industry status quo isn’t suitable, a Shorten Labor Government will mandate Comprehensive Credit Reporting.
Nearly every small business at some stage of their life cycle will need access to finance. New businesses need finance to establish themselves and give opportunities to others looking to grow or diversify.
Labor knows the best way to create new net jobs is from young businesses turning into strong, growing businesses.
Sharing positive credit information improves access to finance for small business and creates greater competition amongst lenders.
Historically, Australian banks have shared negative credit information. Yet we lag the world when it comes to sharing positive information. This inhibits competition and reduces the potential number of successful loan applications. Other OECD countries like Japan and New Zealand have pushed ahead with positive credit reporting.
We don’t believe in picking winners, but we can ensure a regulatory environment to encourage and promote efficient and fair lending. That’s why Labor supports David Murray’s recommendation in the Financial Services Inquiry concerning Comprehensive Credit Reporting.
Allowing more lenders to access positive information about clients, such as account information, will promote competition for small business financing in the banking sector.
The Turnbull Government’s recent announcement on data sharing was entitled, ‘Supporting Australia’s FinTech Future’.
But the question we should be asking is: how can we derive more benefits for consumers and small businesses from comprehensive credit reporting?
We have yet to see this reflected in the public debate. This is disappointing as small businesses are the big winners from positive credit reporting.
David Murray promoted the idea of positive credit reporting to benefit small businesses. This is where the economic benefits will flow. This conversation is not just about FinTech start-ups, but all lenders looking to engage with small businesses.
Innovation occurs each and every day in millions of small businesses across Australia. Leaving them out of this conversation will create a massive opportunity cost.
Last month Labor outlined how we will make it easier for small businesses to bring actions and seek remedies in cases of alleged anti-competitive behaviour. Our Access to Justice for Small Business policy will empower judges to remove the liability of defendant’s legal fees if a small business brings a case in the Federal Court.
Where small and medium businesses allege anti-competitive behaviour, they will be better placed to fight it in the courts, evening the playing field. Effective competition law should not be about the deepest pockets.
Labor’s policies are practical and help small businesses address first order issues.
Small businesses are a Labor imperative. That is why we have formulated practical, straightforward policies to address real issues small businesses face on a daily basis.
For more information, please see this factsheet.
FRIDAY, 29 APRIL 2016