24 June 2015

PSDI-led reforms endorsed in Australian Government report on private sector support

A report by the Australian Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade has endorsed PSDI reforms and drawn on numerous inputs from PSDI’s submission to the Committee.

The report is entitled ‘Partnering for the greater good: The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific region’. Tabled on 22 June, it examines best practices domestically and internationally in PPPs, provision of finance, and facilitating participation and growth in the formal economies of developing countries.

In the report, the Committee specifically endorses PSDI’s business law reform work that is making business incorporation easier and more accessible (paragraph 3.31). The report also notes inputs from PSDI’s submission on the additional costs, market distortions and reduced ‘public good elements’ of the informal sector (par 3.14); the many barriers businesses face to entering the formal economy in the Pacific (par 3.19); and the PSDI-led reforms that are lowering these (par 3.26).

Elsewhere, the report notes PSDI’s identification of roadblocks to women’s economic empowerment as a constraint to national growth potential (par 4.6); the systematic and legal barriers to women’s formal economic participation, and the need for broader interventions to be mindful of these (par 4.44); and the success of PSDI-supported reforms to empower women at the corporate level (par 4.79).

PSDI’s comments on the harm done to the business environment through outdated and inappropriate business laws are also noted (par 5.65), as are PSDI’s comments on the need for effective financial systems (5.79).

Finally, the report incorporates PSDI’s inputs on the poor maintenance record of public infrastructure, and the economic harm of SOEs’ that are often inefficient, raise input costs of the private sector and are a drain on government budgets (par 7.11). 

Of the report’s 37 recommendations, five relate to PSDI-supported reforms discussed in PSDI’s submission. These are:

Recommendation 2.1: ‘…that the Australian Government support and facilitate opportunities which foster the participation of low income men and women in supply chains.’

Recommendation 3.2: ‘…that the Australian Government ensure aid initiatives support the 
establishment of in-country company legislation that accommodates social enterprises and other community and village corporate forms to reduce costs and the complexity of business formalisation; and promotion and assistance, particularly for women, to help them engage in the business registration process and ongoing requirements of operating a formal business.’

Recommendation 5.1: ‘…that the Australian Government prioritise access to financial services and financial education, in particular to the most disadvantaged populations, and explore options to expand current private sector and donor programs beyond the Pacific.’

Recommendation 19.3: ‘…that the Australian Government support and participate in PPPs, where found to be effective, to address social and other infrastructure needs in the Indo-Pacific region, ensuring that the Department of Foreign Affairs and Trade … continue targeted public sector capacity building initiatives for recipient governments in relation to PPPs.’

Recommendation 20.1: ‘…that in those countries or regions where access to finance is a development priority the Department of Foreign Affairs and Trade … develop a more expert understanding of the financial sector in priority countries or regions, including financing constraints for groups (such as women) targeted by the aid program.’