The federal government released its budget with some initiatives that were targeted at small and medium enterprises (SMEs).
However, some of these initiatives are not really what the small businesses were hoping for in order to flourish.
With an election around the corner, a national survey reveals what the small to medium business sector wants government to prioritise.
How does the budget stack up against what SMEs asked for?
Below are the main Federal Budget initiatives targeted at SMEs, along with whether small to medium business owners really wanted the government to prioritise that initiative.
The data comes from a survey released this week of 1257 Australian SMEs, as part of Scottish Pacific’s March 2019 SME Growth Index.
SMEs crave company tax cuts more than anything else
SME Growth Index research shows that, when asked what SME priority the new Federal Parliament should focus on, company tax cuts was the top response.
Scottish Pacific CEO Peter Langham said SME company tax cuts being brought forward would be welcomed by the sector, given this was the top initiative SMEs wanted to see (nominated as top priority by 27 per cent of business owners).
One in five SMEs want the newly elected government to prioritise cutting red tape by reducing their administrative and regulatory burden.
Businesses greatly welcome asset write-offs
Almost 24 per cent said continuing the asset write-off should be the Federal Government’s top focus for SMEs.
Mr Langham said they will be delighted with the budget’s flagged increase of the instant asset write-off up to $30,000 (from $25,000) and opening this initiative up to SMEs with up to $50m turnover (an increase from $10m turnover).
$2b securitisation fund for SME access to finance
This government announcement will not have much of an impact at the coalface for business owners.
SME Growth Index results showed that a very small percentage of business owners believed this should be the government’s SME priority.
“Despite significant publicity around the announcement of a $2 billion SME lending fund, not even 3 per cent of respondents felt that implementing this fund should be the top priority,” Mr Langham said.
What does all this mean for the SMEs?
Mr Langham said SMEs wanted government action on things they see affecting their business on a day-to-day basis, rather than big picture projects such as the NBN or small business funding initiatives.
“Over the past six years, the SME Growth Index has repeatedly highlighted that company tax cuts and a reduced regulatory burden are the most pressing reforms SMEs are crying out for. Nothing has changed this round,” Mr Langham said.
“The Index has recorded a three year high in SMEs expecting to grow in the first half of 2019, despite the uncertainty surrounding the property market, Royal Commission aftermath and pre-election period.”
He continued, “Simplifying the complex tax system and cutting red tape, and on a state basis getting rid of payroll tax, would have the biggest daily impact for Australia’s small to medium business sector.
“These are the everyday impact items that will energise SMEs, encourage business investment and drive growth and innovation.”
Mr Langham said Federal Government efforts to simplify BAS must be starting to hit the mark – in this latest research, only one in 10 SMEs named further BAS simplification as their top priority, down from one in four when this question was last asked 18 months ago.
Only 7 per cent thought reducing SME energy costs should be the main focus for the new parliament.
What exactly does Scottish Pacific do?
Scottish Pacific is a specialist working capital provider, helping thousands of business owners with the working capital they need to succeed.
It lends to small, medium and large businesses with revenues ranging from $500,000 to $1 billion.
The SME Growth Index research is conducted independently by banking analysts East & Partners, on behalf of national working capital funder Scottish Pacific.
The owners, CEOs or senior financial staff of 1257 SMEs across all states and key industries, with annual revenues of $A1-20 million.