The first Labor budget in a decade will be dropped on Tuesday 25 October by the new Treasurer, Jim Chalmers. Amidst an existing economic climate that’s replete with consecutive interest rate rises, mortgage pressure, soaring inflation and a higher cost of living — this will be an important budget for both individuals and small businesses.
Reckon recently polled over 350 Australian small businesses to test the temperature ahead of the budget.
So, what did Reckon discover? What do Australian businesses want to see? Let’s unpack the findings and have a chat to Reckon CEO Sam Allert to add his two cents.
When Reckon asked over 350 Australian businesses how confident they were that the Government would assist small businesses with inflation and rising cost of living, the response was decisive.
“Three in four small businesses (75%) say they think the Federal Government’s response to inflation/cost of living pressures has not been appropriate in balancing the needs of small business.”
That’s a stark lack of confidence coming from a small business community that’s feeling the pinch. This is clearly reflective of the tumultuous past few years, which was peppered with a host of challenges, from COVID-19, to supply chain issues, and soaring inflation.
This lack of confidence was also echoed when we asked Australian small businesses about their concerns of a recession:
“4/5 businesses are concerned about the chance that Australia may be heading into a recession.”
It’s clear from these stats that we’ll be looking to the budget for signs that these issues will be more adequately addressed.
But as Allert notes, “Australia’s robust economy, which has weathered the storms of the last few years, will be tested once more. I find myself quietly confident that we’ll emerge with strength, like the resilient nation we are.”
In terms of taxation, we also asked the small business community what kinds of stimulus measures they would most like to see announced and actioned in the 2022/23 budget.
The most popular measure the business community voted for (at 51%) was the ‘lowering of personal income tax rates to encourage spending”. This was closely followed (at 47%) with ‘simplified tax processes and rules’.
Outside of tax breaks and tax stimulus, we were also interested in what other measures were important for businesses in 2022.
Far and away the top response was for the Government to “reduce regulatory pressure” at a whopping 86%. We also saw strong support for the idea that the Government should do more to ‘increase labour supply’, at 67.5%.
Interestingly, the global challenge of climate change was lowest on the list of priorities, perhaps pointing to the idea that short term business challenges are so stark that monumental long-term issues like climate change are not an immediate priority, despite the severe long-term economic implications of inaction.
In recent years, the issues of mental health have gladly started to gain more recognition. As Reckon CEO Sam Allert noted,
“As a nation, we’re becoming much better at recognising the importance of delivering mental health support to the community. Let’s hope this recognition and action continues through 2023 and beyond.”
When we asked our SMB respondents “Do you think the Federal budget should address provisions for small business mental health support?” 60% said yes, with the remaining 40% saying no.
With the recognition that Australia is lagging behind the rest of the developed world when it comes to digitalisation of our business community, we wanted to know how local business owners felt about this phenomenon. We were also interested in the rising wake of sophisticated cyber threats, which have dominated headlines of late, and whether they would like to see more support in this regard.
The result was a resounding ‘yes’ — with 84% of respondents agreeing that more support was required. Only 16% didn’t think this was a priority necessitating concern.
Allert commented on the high support for digitisation assistance, “The vast majority of small business owners want to see the government assist them to digitise and protest themselves from cybercrime, especially given how critical digital capacity is in modern business operations, and how prominently digital adoption grew over the COVID-19 pandemic.”
We were also keen to understand how confident (or pessimistic) Australian SMBs were of the upcoming budget’s ability to mitigate their business concerns and provide adequate support.
We found that 90% of Australian small businesses were not confident that the Federal budget would deliver positive change to small businesses.
Let’s wait and see what happens on Tuesday 25 October 2022 to understand what actually comes to pass and how well the SMB community has been catered for.
At Reckon we are more than just accounting software, we aim to help small businesses build the foundation to grow and succeed – easy and affordable compliance is an essential part of this.
