What do 1000 small businesses want to see in this year’s Federal Budget?
Reckon recently polled over 1000 Australian small businesses to test the temperature of the market ahead of the federal budget. So what are people saying they would like to see coming from our Federal Government? What is important to our SME’s this year? What do they wish not to see?
With energy on the cards in 2019 and environmental concerns beginning to gather pace, we look to some views regarding energy prices.
In our survey we found that 69% of businesses were affected negatively by energy prices. This is a clear indication the majority of businesses wish to see energy electricity cost reductions.
While the coalition have spruiked coal as a way to reduce prices, we see some small businesses seeing benefit while more environmentally conscious businesses becoming completely alienated by the outmoded solution.
To appeal to environmentally conscious small businesses, the Government rolled out Energy Efficiency Grants at the beginning of the year which offer small businesses up to $25,000 to install more efficient and environmentally friendly solutions.
However, Reckon’s research indicates that merely 19% of Australian small businesses will adopt the government’s offer, while close to half (47%) are not even aware what it is.
Wages and income tax
With expected income tax cuts on the budget horizon and iron ore bringing in a possible surplus, small business are eager for support.
With many businesses fearful of stagnant spending and consumer confidence, just over half (56%) say the seven-year personal income tax relief plan announced during last year’s budget benefited them. This suggests more of the same and even further tax concessions would be largely welcomed.
Instant tax asset write off
While currently 53% of businesses have used it so far, our research shows that a whopping 91% of small businesses want to see this scheme extended, making it remarkably popular. With expected extension only until 2020, it is reasonable to assume the general wish is for this to be extended even further, or enshrined in permanency.
Labor has pledged to exactly this and make the instant tax asset write off permanent, satisfying this 91% of small business. The Coalition has made no indication of an extension but it is widely predicted they may bring the short term version up to $25,000 as opposed to $20,000.
With recognisable skills gaps across many Australian SME’s, a large 83% of those polled want to see more subsidies for upskilling, education and training in this year’s budget.
In last year’s budget, additional money was granted to the Skilling Australians Fund to assist in creating more apprenticeships. However, this has been unsuccessful for the most part, with both Victoria and Queensland rejecting the proposal completely.
Labor has already announced plans to increase spending on TAFE and vocational education, with small business owners likely asking for like-minded assurances from the Coalition.
Tighter lending conditions and falling property prices are having an impact on Australian SME’s with 44% of small businesses say they are already being affected by these two restrictive economic conditions.
Small business financing has always been difficult to secure, and this shows no sign of changing with bank loans harder to come by.
Many small businesses also have personal mortgages on their homes, so such price drops are of concern to their overall financial health, which includes confidence in their business.
Labor has pledged to re-tool negative gearing to help first home buyers, with the treasury concluding the impact on prices would be minimal, but the Coalition will likely use this to entice votes from home owners.