Uncertainty grips SMEs ahead of election
Some 50 per cent of small businesses are worried or uncertain about the impact election policies will have on their operations, a new survey has shown.
Australian small businesses are concerned about the impact of the impending federal election and are delaying critical business decisions, which could impact job growth and investment, according to new survey conducted by Westpac in collaboration with Deloitte.
The survey, conducted over five days on either side of the Morrison government's budget, revealed that 50 per cent of small businesses are choosing to delay decisions such as staffing and investment for fear of election impacts.
An estimated 40 per cent of new jobs in the economy are created by small businesses each year, which is equivalent to 107,000 jobs in 2017-18, according to ABS. Similarly, small businesses invest an average of around $530 million each month.
Westpac and Deloitte predict that if the net effect of the election was to delay some proportion of small business investment by two months, overall investment levels could decline for that period.
Timing is an added concern, Westpac noted, with growth already slowing and drags from the housing downturn expected to intensify.
However, the new survey reveals that not all businesses are curtailing activity. According to the report, the most profitable businesses are less likely to delay decision-making, with 56 per cent stating the election does not affect their timing for hiring staff.
"With the increasing pace and unpredictability of change this quarter, it’s encouraging to see many small businesses adopt a proactive, rather than reactive, approach to decision-making. This is credit to the hard working business owners across the country, and we can all learn from their example," Ganesh Chandrasekkar, general manager of SME banking at Westpac said.
He announced that Westpac is making an additional $30 billion available to SMEs in order to ensure more small businesses can continue to operate with confidence.
SMEs want lower energy costs
According to the report, the most helpful thing the government could do to help small business is decrease energy costs, reduce regulation and red tape, and increase small business grants.
"Our customers tell us that small business tax cuts, less regulation and red tape, and energy policy are a top priority in the upcoming election. The recently announced plans to fast track tax cuts for small business will offer some support; but more can be done to help, particularly with grant funding," Mr Chandrasekkar said.
He explained that although there is a significant number of government grants available, over 40 per cent of small businesses are unaware of what’s on offer and almost 80 per cent find the government grant process too difficult to navigate.
"If there is one area which we could boost confidence it is in the areas of grants – both government and corporate – by easing the burden of compliance and complexity so that businesses receive the benefits," Mr Chandrasekkar advised.
Commenting on business conditions for 2019, Mr Chandrasekkar said that the economy is facing a more challenging year, with the housing downturn expected to have a more material impact on growth.
"With the federal election likely to impact business decisions, 2019 is already shaping up as a trickier year for small business; it will be important we work together with government to ensure they are supported and can continue to operate with certainty," he concluded.