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Wednesday, 3 April 2019
Page: 14578


Mr ROBERT (FaddenAssistant Treasurer) (11:05): I thank those members who have contributed to the debate and I thank the shadow minister. The Australian Business Securitisation Fund Bill 2019 will support Australia's small and medium businesses by establishing the $2 billion Australian Business Securitisation Fund. The fund will enhance access to debt finance for Australian small and medium businesses by improving small lenders' access to the securitisation market. The fund will be able to invest in Australian dollar denominated securitisations backed by SME loans, which are defined as a business loan to the value of less than $5 million. It's intended that the minister will issue an investment mandate that establishes more detailed rules for the fund including further eligibility requirements, financial performers requirements, risk management and transparency obligations. Key elements of the investment mandate were released for public comment in December 2018.

The bill and its instruments will seek to develop the SME securitisation market and unlock more competitive funding for small lenders. This set of interventions is critical in establishing more competition in the SME lending market where 80 per cent of loans are with the majors. The fund will allow these smaller lenders to compete more effectively in the SME lending market which should improve borrowing conditions for SMEs in the long run. Importantly, the bill provides for the effectiveness of the fund to be reviewed after two and five years to ensure it is meeting its objectives. These reports will be tabled in parliament.

The government understands the importance of SMEs to jobs and our economy. Businesses tell us they struggle to get finance without a home for collateral or find it difficult to access credit to expand their growing businesses once all their real estate is pledged. For those who can access finance, the interest rates charged are often high and the process of applying for finance can be long and onerous. The fund builds on this government's commitment to create more competition in the financial sector to ensure that small businesses are getting access to credit on better terms. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.