Just prior to the election, cloud accounting solution Xero canvassed more than 900 small businesses, accountants and bookkeepers to ask them about the issues that mattered to them the most. Here’s what small businesses want the new government to know.
Almost half (48 per cent) of small businesses said they would be affected if the Fair Work Commission was allowed to mandate higher minimum-wage increases – implying an impact on 1.1 million small businesses across Australia.
Xero Small Business Advocate Angus Capel. suggests any changes to the minimum wage could have an adverse effect on our nation’s small businesses who are already struggling and financially fragile.
“Xero data shows that on average, 46 per cent of small businesses were cash flow negative in 2018. That means they had more money going out the door than coming in. For these employers, granting a large pay rise without a boost in productivity or revenue can put their survival at risk,” Capel said.
While 70 per cent of small businesses said policy announcements affected their vote, the same percentage said they were skeptical that politicians would honour their campaign promises.
“The new government has an opportunity to impress the nation’s small businesses by implementing their campaign proposals quickly, such as seeding the Australian Business Growth Fund with $100 million as the Coalition promised and implementing the Australian Investment Guarantee proposed by Labor,” said Capel
Nearly half (47 per cent) of all employers say they struggle to find workers that can help their business succeed. The biggest obstacle? A scarcity of skilled, affordable employees in their region.
“The government has acknowledged a skills shortage and proposed roughly a billion dollars to help expand vocational training and encourage apprenticeships. The sooner the government deploys this funding, the sooner small businesses can help lift employment. Xero is already partnering with Australian universities such as Swinburne to give accounting students today the tech skills they’ll need tomorrow, and we offer webinars to those who are working in the industry,” Capel explained.
Fifty per cent of all respondents said they lacked sufficient capital to achieve their potential. The biggest obstacle cited was the inability to get approved for a loan. Many businesses noted they were unwilling to pledge their home as collateral. This underscores the bipartisan importance of the Australian Business Growth Fund and Australian Business Securitisation Fund.
“Access to bipartisan finance initiatives will help fill a capital hole for small business, but it will also take a combination of technology, data and competition,” said Capel. “Open banking could be at the centre of this. It will help small business owners, the lifeblood of our economy, better understand their full financial position, get the best deal on loans they need to manage their business and help remove much of the paperwork that makes credit applications so daunting and time-consuming. It will also give lenders greater confidence in making unsecured loans.”