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Two SME surveys put cost-of-living pressures well ahead of traditional concerns over tax rates and red tape.
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Small business names inflation as first priority in budget
09 May 2023
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10 minute read
Almost half of SMEs put relief from cost-of-living pressures at the top of their budget wish list and 44 per cent believe Australia is heading towards recession, according to the latest MYOB survey.
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The survey, of 1,000 SMEs, found almost six out of 10 had never run a business through a recession and 48 per cent nominated inflation as priority number 1 for government, well ahead of reducing red tape or cutting the company tax rate.
MYOB chief employee experience officer Helen Lea said many businesses were struggling already, recession or not.
“There’s no doubt small businesses are doing it tough – one in five survey respondents describes their current financial position as either fair or poor,” she said.
“While they’re still showing signs of resilience, increasing rates and input costs will only make operating a business harder.
“I encourage the government to deliver meaningful outcomes for small businesses in this budget. In the short term, cost-of-living measures and energy incentives will give support during the winter months.”
Ms Lea welcomed the government’s move to subsidise energy costs for SMEs, with the survey revealing the top pressures on business were the cost of utilities (36 per cent), fuel prices (34 per cent), interest rates (32 per cent), and price margins and profitability (26 per cent).
“The government’s pre-budget announcement of the energy incentive is a step in the right direction, with our data showing rebates for energy usage are a top priority for small businesses,” she said.
But also she called for targeted assistance by legislating and extending two initiatives announced a year ago by the previous government: the Small Business Technology Investment Boost and the Skills and Training Boost.
“In a market where SMEs need to do more with less, there is greater importance on the adoption of digital tools to increase efficiency and help SMEs navigate tough times,” she said.
“For almost one fifth of small businesses respondents, cost is still a top barrier to adopting digital tools. This is an area we’d like to see prioritised to help small businesses boost their productivity.”
Another pre-budget survey by listed accounting software company Reckon also found inflation was the top concern for SMEs, with 92 per cent seeking relief measures from the budget and 75 per cent worried about a possible recession.
The survey, with a smaller sample set of 290 small business owners, revealed widespread pessimism about the budget with just 13 per cent expecting positive change.
“Most SMEs are significantly concerned about the pressures of high inflation, as we can clearly see from the survey results. With the cash rate being raised by the RBA yet again, and the cost of living remaining high, SMBs want to see relief for these issues in the upcoming federal budget,” Reckon CEO Sam Allert said.
The Reckon study found SMEs top priorities for investment were inflationary pressures (22 per cent), healthcare (21 per cent), tax cuts, (20 per cent) interest rates (15 per cent), and power costs (14 per cent).
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