As inflation and rising costs continue to add pressure on local businesses, SMEs have little confidence Budget 2023 will deliver much reprieve for their needs.
According to MYOB’s latest SME Snapshot – a nationwide survey of 500-plus SME owners and decision makers – a majority (62%) of SME leaders aren’t confident that the upcoming Budget will deliver benefits for businesses like theirs, while just under a third are ‘quite’ or ‘very’ confident it would, and the remainder were unsure.
Despite low confidence that they will see targeted investment in the Budget, SMEs are clear on what they would most like to see announced by Government this year. While most are wishing for some cost reprieve for themselves, the insights show clear SME support for investment that will deliver wider benefits for the country.
Considering your business needs, what would you most like to see announced in this year’s Budget?
- A reduction in company tax rate to 25% (44%)
- A permanent reduction in public transport and petrol prices (30%)
- Increased investment in healthcare (30%)
- Increased investment in infrastructure (25%)
- Support for training e.g. apprentices, upskilling employees, intern programmes (24%)
- Support for businesses looking to grow, e.g. R&D, financial growth assistance (24%)
SME leaders also say that they’d like to see increased spending prioritised for areas including: healthcare (63%), education (43%), living standards (40%), infrastructure (37%) and mental health (34%).
MYOB spokesperson, Jo Tozer (pictured), explains that while businesses are doing it tough, they still strongly support investment in improving or safeguarding the future of their communities.
“Local SMEs are on the front line of a difficult economy, which is likely why we’re seeing a strong level of pragmatic realism as we go into Budget 2023,” says Jo. “Most recognise there’s may not be a great deal in it for them and are therefore keen to see the Government to prioritise spending in areas like healthcare, infrastructure, and skills training – each of which the Prime Minister recently acknowledged as focus areas – which will contribute to the long-term growth and wellbeing of our country and our economy.”
Inflation and rapidly rising costs
“The call for a slight reduction in the company tax rate is a perennial feature on the Budget wish-list for local SMEs. However, in this high inflation environment it’s also understandable that businesses are seeking some relief from rising costs,” Jo adds.
MYOB’s Snapshot highlighted that two thirds of local SMEs have faced higher expenses due to rising costs for running their business.
Over the past six months, SMEs estimate that when it comes to their monthly costs, they are paying:
- Almost $400 more on average for wages and salaries (with 25% estimating an increase of more than $1,000).
- Just over $293 more on average for insurance.
- Around $280 more on average for stock.
Transport and shipping costs are also estimated to have increased by an average of around $279 per month -with more than one-in-10 SMEs seeing a rise of more than $1000, while compliance costs are up by an average of approximately $240.
On top of cost increases, when asked about the impacts to their business due to high inflation over the past six months, SMEs reveal they have experienced:
- Pressure from staff to increase wages (46%)
- A decrease in profits as they try to maintain reasonable prices for customers (42%)
- Reduced sales (40%)
- Fewer customers through their doors (33%)
- Increased prices which mean they can’t buy in their usual stock (28%)
“Even well before the festive trading period last year, we’ve seen local SMEs struggling to strike a sustainable balance between managing higher costs and doing what they can to maintain their sales volumes, as consumers become increasingly cautious with their spending habits,” explains Tozer.
“While their expectations are low for direct support from the upcoming Budget, we do hope there will be some policy outcomes that will bring benefits to these businesses, so they can continue to focus on providing their customers and local communities with the goods and services they need and enjoy. After all, it’s their success and growth that will provide a boost to our local economy today and into the future.”
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