Small Business pessimistic about the Budget Outcome
Many small businesses don’t expect much support from next month’s Federal Budget, with many hoping for – but not expecting – reduced taxation and a cut in red tape, according to the latest Bibby Barometer survey.
The key inclusions that small businesses would like to see in the Federal Budget, to be handed down on May 14, are reduced taxes for small businesses (51%), a reduction in Government red tape (40%) and relaxed import/export regulations (20%).
But small businesses aren’t optimistic about a positive outcome. The number of decision makers who expect the Budget to actually hinder small business growth outnumber those that expect it to support small businesses by almost two to one (47% versus 25%).
Turning to the Federal Election in September, twice as many small business decision makers think the Coalition winning the next election would be better for business than those who think the Coalition will be worse for business (47% versus 23%).
Gary Green, National Sales Director, Bibby Financial Services, said: “Small businesses want to see more certainty from government addressing the issues facing the sector. For example, the manufacturing sector is contracting, insolvencies are a major concern for retailers due to reduced consumer demand and businesses are concerned about the lack of available funding.
“As a result many SMEs are in a holding pattern with regard to investment, and have been for some time. Our survey found approximately half (49%) intend to maintain their current level of investment over the next 12 months compared to 28 per cent who intend to invest more in their business.
“Policies such as a reduction in company tax rates for all companies by more than 1 per cent for the 2013-14 income year and a reduction in the cash rate will help encourage reinvestment and productivity, but more needs to be done.”
The Bibby Barometer survey, conducted in February, found the majority of business decision makers (86%) have experienced cash flow issues in the past year, most commonly because customers make excuses for slow payments (34%).
Other major problems experienced include issues with government red tape, compliance and tax administration (24%), higher costs of credit (24%) or limited access to credit (23%), trouble getting payment from large companies or government departments (22%) or having to write off bad debts (22%). Of all respondents, 16% have had difficulties meeting their tax payments on time.
Looking ahead, many small businesses have become more pessimistic about payment terms with 37% expecting the length of time to be paid to increase in the coming quarter. Most (57%) expect the time it takes for them to be paid to remain the same.
“The Government needs to listen to the small business sector. Small businesses want to see a Federal Minister appointed that is dedicated solely to the Small Business portfolio. The recent appointment of Western Australian MP Gary Gray as the sixth federal Small Business Minister demonstrates unacceptably high turnover. The small business sector wants and deserves consistency, continuity and certainty,” Mr Green said.