Productivity Commission Floats Credit Guarantees for Firms
A government-backed scheme would cover part of lenders' losses to help young, collateral-poor and under-served businesses secure finance.
Updated on Nov. 9, 2026 in Economic Indicators
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The Productivity Commission has proposed credit guarantee schemes under which government would cover an agreed share of a lender's losses if a borrower defaults. The proposal targets funding difficulties faced by young firms, businesses with limited collateral, and businesses led by women or Aboriginal and Torres Strait Islander people.
Why it matters
The commission says the funding gaps affect firms with little collateral and limited track records, which can restrict business growth. Its inquiry terms exclude tax, workplace relations and merger frameworks, a limit industry groups have criticised.
The inquiry timetable runs from submissions closing on 11 December 2026 to public hearings on 8-12 February 2027, with a final report due to government in May 2027. The extraction gives no quantified funding gap or guarantee coverage percentage, so the scale of the proposal remains unestablished.
The players
Productivity Commission
The Productivity Commission is the Australian Government's independent research and advisory body on economic, social and environmental policy.
Australian Chamber of Commerce and Industry
The Australian Chamber of Commerce and Industry is the national peak body representing business interests across Australia.
The details
The commission proposed a credit guarantee scheme in which government covers an agreed share of a lender's losses if a borrower defaults. It also proposed changes to the Consumer Data Right to make business information easier to obtain and share, including bringing ASIC and Australian Business Register data into the framework, and allowing individuals already authorised on an online business account to consent to data sharing. The commission declined to advocate broader relaxation of prudential safeguards.
Timeline
11 December 2026: Submissions to the inquiry close.
8-12 February 2027: Public hearings are scheduled.
May 2027: The final report is due to government.
Economic Indicators Context
The proposals extend the Consumer Data Right beyond consumer data to cover business information, a step that would widen the framework's reach into business finance. The inquiry's terms exclude tax, workplace relations and merger frameworks, which limits how far the economic review can address business conditions.
If adopted, a credit guarantee scheme could make it easier for young firms and businesses with limited collateral to obtain loans, since lenders would be partly protected against default. Businesses would also gain easier access to their own information for sharing with lenders and advisers, though no changes have been enacted yet.
The takeaway
The Productivity Commission's proposals signal that access to finance and business data are likely to become more readily shareable, though the final shape of any reform will depend on the May 2027 report and government response.
What happens next
Submissions to the inquiry close on 11 December 2026, public hearings are held on 8-12 February 2027, and the final report is due to government in May 2027.
Further reading
For broader context on the economic conditions behind this inquiry, see Economic Indicators.
Source note: This article includes information reported by The Adviser.
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