Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Finance and Public Administration Legislation Committee
Indigenous Business Australia

Indigenous Business Australia


CHAIR: We will now welcome Indigenous Business Australia. I welcome Mr Rajiv Viswanathan, acting Chief Executive Officer of Indigenous Business Australia, and officers. Mr Viswanathan, do you wish to make an opening statement?

Mr Viswanathan : Yes, I do.

CHAIR: Please.

Mr Viswanathan : As this is my first appearance before this committee as the new CEO of IBA, I would like to inform the committee as to how we are positioned to support Aboriginal and Torres Strait Islander people to fulfil their aspirations for economic independence. As a commercially focused statutory authority with a major Indigenous board, as you know IBA has a unique and important role to play in economic development. In order to keep pace with the growing demand for commercial solutions sought by Indigenous communities and entrepreneurs, IBA is committed to continuous improvement and innovation. As such, we are working on expanding our offering, developing new products and services, building impactful partnerships with communities as well as government and the private sector. In doing so we are ensuring that our approach is evidence based, built on proper consultation with Aboriginal and Torres Strait Islander people as to their needs and their aspirations.

In the small business space IBA's business development and assistance program is delivering a range of services to first Australians seeking to start or grow a business. As at the end of February the program was meeting all but one of its KPIs, with significant efforts underway to continue to drive performance through to the end of the financial year. We now provide an end-to-end business development and assistance program to assist our customers to build knowledge, gain greater skills and develop a sustainable business model.

A substantial proportion of our work is in regional and remote Australia and customer feedback has been very positive. In addition to offering products linked to building capacity, we offer business loans and are developing new finance products based on identified needs. This includes a pilot of a new start-up loan package and an invoice finance solution to support businesses with managing their cash flow.

We are also building new partnerships that I believe will enhance outcomes for our customers. We are piloting an accelerator program for entrepreneurs, which we are offering in partnership with a leading business incubator, and we are finding places in a collaborative co-working space in Western Australia with embedded business support. We are also actively exploring how we can partner with Indigenous organisations that incubate businesses and provide support on the ground in regional and remote Australia.

In home ownership, we have had continued improvements to our systems, product development and increased accountability for regional managers. We are working very hard to reach our target of 530 loans for this financial year and we have written 308 loans to the end of February. Housing affordability remains a key challenge for many of our customers as it does for many Australians. In September last year the IBA board introduced policy changes to help make purchasing a home more accessible for our customers. This included reducing interest rates for first home buyers to as low as one and a half per cent and reducing deposit requirements. In addition, we have introduced online expression of interest processes and more targeted marketing. That has seen an increase in applications when compared to the prior year.

We are also looking at innovation in our home ownership offering. Next week we are hosting a roundtable with Indigenous housing organisations from across the country to look at how we can create new products to support more families to transition into home ownership.

Our investment program continues to perform strongly, particularly in offering investment opportunities for Indigenous organisations. We are actively engaged with more than 40 organisations, many of which are in regional or remote Australia, to develop improved governance, sustainability and commercial capability.

Finally, I am pleased to advise that we have recently announced the Elevate initiative, which is a program to build Indigenous leadership through our subsidiary boards. Thank you. I look forward to your questions.

Senator SIEWERT: I have a couple of brief questions. We heard briefly from the ILC about the combining of the administrative end and we talked about it at last estimates. Can you give us an update on progress on that approach and how much of that has now been implemented?

Mr Viswanathan : So far the key step that has been taken is to share some office space. In Perth, Adelaide and Canberra IBA or ILC, or vice-versa, had vacant space. It made sense to sublet that to the other organisation. I am advised that that will result in an annual saving of over $300,000, and so it made commercial sense.

Senator SIEWERT: That is across-the-board from the three?

Mr Viswanathan : Yes.

Senator SIEWERT: I apologise for interrupting.

Mr Viswanathan : That is the first step that has been taken. In terms of the wider project, we are still in the due diligence phase. There is a steering committee that has been established. We are really looking at the detail of the implementation plan. At this stage it is really only the co-location of office space that has taken place.

Senator SIEWERT: Could you take on notice who is on the steering committee?

Mr Viswanathan : I can answer that now. The steering committee is myself, John Maher and there is an independent member that we have invited, who is a person with significant experience in commercial operations and these types of projects.

Senator SIEWERT: Somebody from private enterprise?

Mr Viswanathan : Private enterprise, yes.

Senator SIEWERT: Are you able to tell us the name of that person?

Mr Viswanathan : The person we have identified is Neil Schafer. He formerly worked with the Commonwealth Bank and Citigroup and has a lot of skill in integrating these sorts of back office functions.

Senator SIEWERT: Does that mean the steering committee has not started?

Mr Viswanathan : The steering committee has met. Mr Maher and myself have met twice. The next meeting is scheduled for mid-March.

Senator SIEWERT: For mid-March?

Mr Viswanathan : Mid-March, yes.

Senator SIEWERT: What is the time line for the rolling out of the rest of the process?

Mr Viswanathan : We are still working through that. The next key step is to get a detailed implementation plan that we will then follow through in a very structured way.

Senator SIEWERT: Do you have terms of reference for that steering group to the extent of what is in scope?

Mr Viswanathan : We do, yes.

Senator SIEWERT: Can you provide that to the committee?

Mr Viswanathan : Yes. It is very much focused on what we call the transactional back office functions—things like IT, payroll, accounts payable and receivable. It is process oriented functions.

Senator SIEWERT: I know you were not precise in terms of the timeline. Is this intended to be finished by the beginning of the new financial year?

Mr Viswanathan : No. It is intended to be rolled out over an 18-month period.

Senator SIEWERT: Commencing when?

Mr Viswanathan : We have started the process. Broadly we would be looking at the middle of next year to be fully completed. There are phases that are mapped out but, as I said, that detailed plan is still being worked through.

Senator SIEWERT: So, the steering committee is looking at the due diligence. When do you intend finishing that process?

Mr Viswanathan : I anticipate there is still a few weeks worth of work to really bottom out the first phase and then that will be an ongoing process. There will be further due diligence with the second phase, which involves other functions being transferred.

Senator SIEWERT: Could you provide on notice the terms of reference and also the information about the phases?

Mr Viswanathan : Yes.

Senator SIEWERT: Thank you.

Senator DODSON: I will just put my question on notice. I will give you an idea of what the question is going to be about. It is to do with the strategic positioning of the IBA in relation to northern development and the enhancement of opportunities for traditional owners and native title holders. So, it is in that vein.

Mr Viswanathan : I can comment on that today or I can take it on notice, whichever you prefer.

Senator DODSON: You can make a comment now, but I definitely will be—

Mr Viswanathan : We are very actively engaged with a number of organisations across northern Australia, as I mentioned in my opening statement. One of the things that we are looking at is how we can bring together a steering group of Indigenous organisations across the north and connect in with the various opportunities that are now emerging. We are looking to construct a formal group around that.

Senator DODSON: Thank you.

CHAIR: Thank you to the Indigenous Business Australia.