The Australian Chamber Small Business March Quarter Survey reveals that Australia’s economy is in transition, an important issue for all parties as we head to a July 2 election, and a change that will have a considerable effect on Australian business confidence.
With Australia’s global competitiveness ranking falling from 10th to 21st over the past ten years, James Pearson, CEO of the Australian Chamber of Commerce and Industry, says that election should be about policies that will improve Australia’s ranking over the next ten years.
“Tax and workplace relations are the areas where the nation has the most work to do, with current rankings outside the top 100. This is unacceptable,” said Pearson.
“We support moves by government to cut the company tax rate and to reinstate the Australian Building and Construction Commission to its full powers.
“Election priorities for our more than 300,000 business members, employing over four million workers, include addressing youth unemployment, reducing government spending to a benchmark of 25 per cent of GDP, better planning and delivery of infrastructure, encouraging tourism through improvements to visa processing and getting greater value from government services through increased competition.”
The results of the survey also showed that small businesses have been utilising budget measures including the instant asset write off, with investment in equipment recording its best result in over six years.
“There has been a significant 5.3 point jump for small business investment in plant and equipment since the 2015 Budget, which brings the index out of negative territory for the first time since the end of 2009,” explained Pearson.
This result shows that small businesses are making the most of the tax incentives available to them, said Pearson, and also shows the decision in the 2016 Budget to extend the instant asset write-off to businesses with a turnover of up to $10 million was the right one.
Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer, welcomed the results saying that they demonstrate the Coalition’s national economic plan is working.
“It is fantastic to see that small businesses have responded to the Government’s 2015 tax concessions and that they are investing in assets which will help them grow, innovate and create jobs,” said O’Dwyer.
“This survey demonstrates the importance of tax cuts and tax incentives to small businesses, which make up 97% of all businesses in Australia.”
Most measures of small business conditions have also strengthened over the past year, led by rises of more than eight points in sales revenue and profits, while pressures on wage and non-wage labour costs continue to rise alongside business conditions, but these pressures have moderated in the most recent results.
“Despite recent improvements, small businesses generally reported weaker conditions than businesses overall, with lower readings recorded for business conditions, sales revenue, profit and employment and more rapid in increases in non-wage labour costs and selling prices,” said Pearson.
“However, small business reported greater overtime utilisation, stronger investment and more moderate wage growth.”
Photo credit: Google Australia Blog