National Commission of Audit

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Yesterday the Government released the report of the National Commission of Audit. The report made a number of recommendations which cover major aspects of the Australian Government’s operations.

Recommendation 33 of the Commission’s second report relates to Efic, our operations and our place in providing export finance to Australian companies. The Commission’s recommendation is that Efic should cease to exist, with the existing loan book transferred to DFAT. The report states that:

“As noted by the Productivity Commission, virtually all of Australia’s exports by volume and value take place without Efic’s assistance. Support provided by Efic has mostly been directed at a small number of large businesses, including major resource projects. There is no convincing evidence of systemic failures in financial markets that impede access to finance. In recent years Efic has earned most of its income through the investment of surplus funds and its capital and reserves, not the provision of financial services.”

With regards to this recommendation, it is important to note that it simply recites the Productivity Commission observations from 2012. There is no new material presented. Efic was not provided any opportunity to respond.

Since the Productivity Commission report, Efic has made a significant submission to the Financial System Inquiry which argues that there are in fact inefficiencies in Australian financial markets. An efficient financial system is one that meets the needs of financiers, households and business. In our experience, small to medium enterprises (SMEs) and businesses of all sizes operating in emerging and frontier markets, cannot consistently access the finance they need to succeed.

The Treasurer and Finance Minister made clear when releasing the report that the recommendations do not reflect Government policy:

“The National Commission of Audit report is not a report by the Government but a report to the Government. It is one important input to the Government's considerations for the upcoming Budget. While the Government will not be providing an immediate response to each recommendation, our response to the National Commission of Audit Report will be our first Budget on 13 May.”

For the team at Efic, it is business as usual. We are focused on providing simple and creative solutions to Australian companies to enable them to win business, grow internationally and achieve export success.