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1 in 4 SMBs convinced government is working against them

Over a quarter of small and medium businesses believe the federal government is working against them, an increase of 3 per cent from last quarter.

1 in 4 SMBs convinced government is working against them
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  • Maja Garaca Djurdjevic
  • November 25, 2019
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Some 26 per cent of small and medium businesses (SMBs) think that federal government policies are detrimental to their growth, according to the latest Sensis Small Business Index (SBI).

“Over the years we have seen a growing perception among SMBs that federal government policies do not affect them. This change in sentiment may be small but is a significant trend,” said Sensis CEO John Allan.

According to Sensis, the national drop in support for the federal government policies is led by South Australia (30 per cent), Tasmania (29 per cent) and Victoria (28 per cent).

Conversely, support from Queensland SMBs has seen the most positive change, growing 5 per cent from last quarter to 36 per cent.

At a state and territory level, the majority (37 per cent) of small businesses think their state government policies have no impact.

Mr Allan said this showed that a significant proportion of small business owners believe their state and territory government policies could be more effective.

“Whether this belief is right or wrong, the figures show a clear need for improvement in how state and territory governments are engaging with the small business community and communicating their efforts to support local small business owners through policy,” he said.

The sentiment comes as SMB confidence in the Australian economy drops 5 per cent quarter on quarter, with 39 per cent of SMB owners now believing the economy is in slowdown compared with 34 per cent in the last period. Compared with the previous quarter, fewer SMB owners now believe the economy is growing (3 per cent drop to 13 per cent).

Thirty-six per cent of SMBs also believe the nation’s economy will be worse in 12 months’ time, compared with 30 per cent last quarter. Only 16 per cent said it would be better a year from now, compared with 22 per cent last quarter.

Access to finance increasingly difficult

Sensis revealed that SMB owners are having an increasingly hard time accessing finance, with 35 per cent saying it is now more difficult – a 5 per cent increase from the previous period.

West Australian (42 per cent) and South Australian (41 per cent) SMBs are the most likely to say that finance is more difficult to access than six months ago.

Conversely, SMB owners in Victoria (18 per cent) are most likely to think finance is now easier to access, with NSW coming second (14 per cent).

“Small businesses nationally are facing a worsening credit squeeze as banks continue to react to the intense scrutiny and criticism of the royal commission,” said Mr Allan.

“Lenders are becoming increasingly risk averse and introducing more onerous checks on borrowers, which means SMBs are being unfairly caught in the fallout from disciplinary action on the banks.”

Bank loans remain the preferred finance option for small businesses nationally, holding steady at 39 per cent quarter on quarter. Interestingly, consideration of equity capital raising for finance saw a rise of 3 per cent from last quarter to 15 per cent.

The November 2019 Small Business Index (SBI) surveyed 1,011 small and medium business owners or managers across metropolitan and non-metropolitan regions throughout Australia between 17 and 31 October this year.

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