Small and medium business 'pessimistic' about Federal Budget
- 07 May, 2014 10:03
Almost 38 per cent of small and medium sized businesses believe there will be nothing for them in next week's Federal Budget.
That's according to the latest Bibby Barometer SME survey, which has also revealed SMEs are 'pessimistic' about the prospect of the prime minister, Tony Abbott, keeping his promises to the sector.
The survey, conducted by CoreData in February on more than 850 small and medium sized businesses Australia-wide, found Victorian SMEs (42 per cent) were most pessimistic about the Budget, closely followed by Western Australian SMEs (39 per cent), Queensland (37 per cent), and South Australia and NSW (both 32 per cent).
The research also found that 40 per cent of SMEs believe that since the election of the new Federal Government in September, there have been no changes for the small business sector, though close to half (48 per cent) think it is too early to tell.
Looking ahead, 41 per cent of SMEs believe the Abbott government won’t increase support for small businesses this year, while Just 15 per cent of SMEs expect more support from the Government.
Bibby financial services managing director A/NZ, Mark Cleaver, said small businesses want the Federal Budget to reflect the needs of the sector.
"Highest on SMEs’ wish list is no increase in GST (34 per cent), followed by reduced taxes for small businesses (26 per cent), a reduction in Government red tape (16 per cent) and more small business handouts (8 per cent),” Mr Cleaver said.
“Many businesses are experiencing cash flow problems with one in three (36 per cent) reporting cash flow has become more difficult to manage over the past 12 months.
"A further hike in taxes on SMEs or in the GST would spell disaster for the sector."
Reflecting the perceived lack of the Abbott’s government’s engagement with the small business sector, the vast majority of SMEs do not know who the Federal Minister for Small Business is, with only 16 per cent correctly naming Bruce Billson, according to the Bibby survey.
Persistent cash flow problems
Many businesses are experiencing persistent problems with cash flow, with recent analysis from Dun & Bradstreet (D&B) showing businesses are waiting on average 53 days to be paid on their invoices.
Cleaver said the lengthy wait explains the cash flow concern. "Close to half [44 per cent] of SMEs we surveyed said they have had customers making excuses for slow payments," he said.
"It is therefore unsurprising that some SMEs have had to write off bad debt over the past year.
Businesses are also struggling with time management (37 per cent), reduced consumer spending (36 per cent) and increased competition (35 per cent)."
The Bibby Barometer SME survey is conducted bi-annually on business sentiment towards economic conditions, cash flow management, financing and key business challenges.
Each year, SMEs are asked about their hopes for the Federal Budget.
Cleaver said: "Leading up to this year’s budget, to be handed down on May 13, Treasurer Joe Hockey has stepped up his argument for urgent cuts to major spending programs in the Budget, recently declaring that all Australians will carry the burden of cost cuts, including the small business sector," he said.
“Business groups have also have hit out against a temporary increase in personal income taxation, saying any rise in personal income tax rates in this Budget would unfairly hit small businesses by hurting consumer spending,”