Almost half of Australian small to medium businesses believe the government's policies to spur investment, over the past 12 months, have not worked and are calling for business tax cuts ahead of tomorrow's budget.
Research conducted by Bibby Financial Services among small and medium-size businesses (up to 200 employees), found that SME's are ready to invest, despite weak economic conditions and concerns that government policies are not working.
According to the survey, conducted before last week’s cut to interest rates, 72 per cent of medium-size businesses intend to invest in their businesses in the next 12 months.
Bibby Financial Services A/NZ, managing director, Mark Cleaver, said the good news was that interest rate cuts were having a positive effect.
"We have seen an increase in the level of borrowing after several years of below trend growth in business lending," he said.
"Among businesses that intend to borrow over the next 12 months, 32 per cent said they will borrow to fund growth and more than one-in-five [22 per cent] will borrow to fund innovation projects.
"Both indicators have increased from July 2014, which is an encouraging sign, showing businesses are prepared to invest in the future and become more proactive in driving growth.
He said, with interest rates at historic lows and SMEs prepared to put their money to work, the government had an opportunity to send businesses a clear signal that now was the time to invest.
"Our research shows that SMEs are looking to the government for support and are calling for a 1.5 per cent cut to their tax rate, increased funding for training and more flexible labour relations,” he said.
“The federal government should recognise that SMEs, which are responsible for almost 70 per cent of employment in Australia, feel that the government policies introduced in the past 12 months have not worked."
Fewer than half the businesses surveyed thought the government’s policy initiatives had helped them to grow [43 per cent] or provided them with confidence in their future [49 per cent].
Bibby said less than half the businesses surveyed said they had reduced their operating costs [43 per cent], hired more staff [45 per cent] or improved their access to finance [48 per cent] as a result of government policy initiatives.
"Tomorrow’s Budget is an opportunity to put that right,” he said. “The majority of the 620 businesses surveyed in the research are medium-size businesses, employing up to 200 people.
"These are significant businesses that have the collective ability to boost national economic growth, employment and productivity."
The Bibby Barometer surveyed businesses employing between 1 and 199 people. Almost half the businesses (46 per cent) employ 20 to 199 people, while 38 per cent employ five to 19 people and 17 per cent employ one to four people.
Slightly more than half the businesses surveyed are family-owned.